SY BFM: Semester IV: Auditing Paper I
I.
Unit I: Introduction to auditing
1) Introduction
i.
Financial
statements
ii.
Users
of financial statements
iii.
Definition
of auditing
iv.
Objectives
of auditing: Primary and secondary objectives
v.
Expression
of opinion
2) Detection of frauds and errors
i.
Inherent
limitations of audit
ii.
Errors
and frauds
iii.
Concepts,
Reasons and circumstances
iv.
Types
of errors: Commission, Omission, Principle and Compensating
v.
Types
of fraud
vi.
Risk of
fraud and error in audit
vii.
Auditors
duties and responsibilities in respect of frauds
3) Types and principles of audit
i.
Principles
of audit
1.
Integrity
2.
Objectivity
3.
Independence
4.
Confidence
5.
Skills
and competence
6.
Materiality
and work performed by others
7.
Documentation
8.
Planning
9.
Audit
evidence
10.
Audit
conclusions and reporting
ii.
Types
of audit
1.
Meaning
2.
Advantages
and disadvantages of balance sheet audit
3.
Interim
audit
4.
Continuous
audit
5.
Concurrent
audit
6.
Annual
audit
7.
Miscellaneous
audit
8.
Advantages
of independent audit
9.
Qualities
of auditors
10.
Auditing
vs. accounting
11.
Auditing
vs. investigation
12.
View
the concept of true and fair
II.
Unit II: Audit planning, procedures and
documentation
4) Audit planning
i.
Objectives
ii.
Factors
to be considered
iii.
Sources
of obtaining information
iv.
Discussion
with clients
v.
Overall
audit plan
5) Audit programme
a.
Meaning
b.
Factors
to be considered
c.
Advantages
d.
Disadvantages
e.
Overcoming
disadvantages
f.
Methods
of work
g.
Instructions
before commencing works of audit
h.
Overall
audit approach
6) Audit documentation
a.
Audit
working papers meaning
b.
Importance
c.
Features
d.
Contents
of permanent audit file
e.
Temporary
audit file
f.
Ownership,
custody, access of other parties to audit working papers
g.
Auditors
lien on working papers, clients books
h.
Audit
notebook: meaning, structure, contents,
i.
General
information, current information and importance
III.
Unit III: Auditing techniques: Test check,
sampling
7) Test checking
a.
Test
checking vs. Routine checking
b.
Test
checking meaning,
c.
features,
d.
factors
to be considered,
e.
when
test checks can be used,
f.
Advantages,
disadvantages and precautions
8) Audit sampling
a.
Meaning
b.
Purpose
c.
Factors
in determining sample size
d.
Sampling
risk
e.
Tolerable
error and expected error
9) Methods of selecting sample items
a.
Evaluation
of sample results
b.
Auditors
liability in conducting audit based on sample
IV.
Unit IV: Internal control and internal audit
10) Internal control
a.
Meaning
and purpose
b.
Review
of internal control
c.
Advantages
d.
Auditors
duties
11) Review of internal control
a.
Inherent
limitations
b.
Internal
control samples
c.
for
sales and debtors
d.
Purchase
and creditors
e.
Wages
and salaries
12) Internal audit
a.
Meaning
b.
Basic
principles
c.
Objectives
d.
Evaluation
of internal audit by statutory auditor
e.
Usefulness
of internal audit
f.
Internal
audit vs. External audit
g.
Internal
check vs. internal audit
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