1. Aim

The aim of this module is to instil the principles and impart the key skills necessary to be able to understand and operate in an audit function.

  1. Learning Outcomes

At the conclusion of this module the candidate will be able to:

  • Understand the Framework and purpose of auditing.
  • Be able to appreciate the nature and theory of the Auditing function.
  • Carry out audit functions.

Pre-requisite Learning

Evidence of assessed pre-requisite knowledge and understanding in the following disciplines must be demonstrated through the Institute’s examinations, or those of equivalent qualifications which have been approved as meeting the Institute’s requirements.

  • All Part A
  • Financial Accounting
  • Taxation
  1. Learning Content
  1. Historical Developments of Auditing

Statement of responsibilities

Audit committees

  1. Principles of Auditing

Nature of Auditing

Objectives of an Audit

Auditing Standards

Role of Internal Auditor, compatibility with auditing standards

Independence, professional qualifications, Role of external Auditor

Reliance on work of an Internal Auditor

Appointment, Duties and Rights of an Auditor

Company Law provisions affecting auditors

  1. Professional Ethics – International Federation of Accountants Requirements on Auditing
  1. The Audit Process


Materiality and risk assessment

Familiarisation with the client (knowledge of business)

Controlling and Audit and Audit working papers

Recording the system

Audit tests and sampling.  Compliance and substantive test techniques ranging from enquiry, observation, examination, sampling, re-performance, recalculation to establish that the work has been properly performed.

sampling techniques

audit evidence

management letters

audit reports – any benefits to be derived from auditor’s activities will normally be accomplished through the medium reports on findings and recommendations

bank and external confirmation

  1. Responsibilities and how Compatible they are

Evaluating the system.  Evaluation of internal control from the standpoint of how well the accounting system provides for information that is adequate and accurate; protection of resources of business from losses due to theft, embezzlement or carelessness.  (This is normally a part of the external auditing function).  Also evaluation of clerical and accounting efficiency: effectiveness of procedures, utilisation of resources, use of mechanical and electronic equipment, adequacy of personnel.  (This is normally part of the internal auditing function).

  1. Computer Auditing

Audit procedures of computer applications – input controls, processing controls, output controls, user controls and general controls.

Advanced computer auditing such as the use of internet, e-commerce Eft, Pos, etc.

  1. Using the work of an expert

Specialists – Lawyers, property valuers etc.  Other activities – work performed by other auditors at branches or subsidiaries.

  1. Evaluating and Concluding

Events after reporting date

Contingencies and commitments

Completion of the audit

Going concern and letters of representation

  1. Audit Practice

Relevance of controls to the internal and external audit

The nature of systems of internal control

Evaluation of systems of internal control

The subject name should be changed from AUDITING to AUDITING & ASSURANCE to reflect current developments and practice.

  1. Quality Control

Quality Control for audits of historical financial information

The role of Quality Control in Audit Risk Management

  1. Audit Risk Assessment (Risk Based Audit Approach)

Audit Risk

Inherent Risk

Control Risk

Detection Risk

Understanding the Risk of Material Misstatement

  1. Assurance and Audit Related Services

Assurance Engagements

Engagements to Compile Financial Information

Engagements to Perform Agreed Upon Procedures

Engagements to Review Financial Statements

  1. Public Sector Auditing

Operational Audits (Economy, Efficiency & Efficiency)

Value for Money Audits

  1. Audit Practice

Practical Auditing Scenarios

Case Study Analysis

All Practical Auditing Scenarios and Case Study Analysis should be based on the risk based audit approach

  1. The Audit and Society

The Value of an Audit to Society

The Expectation Gap

The Causes and Social Costs of Corporate Fraud and Corporate Failures

The Causes and Social Costs of Audit Failures


Knowledge of International Accounting Standards and the International Auditing guidelines is a Pre-requisite.

Recommended Reading

Chambers, Selim & Vinten            (1993) Internal Auditing (2nd  edition) Dartmouth / Pitman London
Millichamp A H (2008) Auditing 9th Edition Letts/DP Publications London
Taylor, Kritzinger & Puttick (2007) International Auditing 9th edition Jutta& Company Capetown
Watney DA & Turney PB            (1990) Auditing EDPs Systems 2ndEdition Prentice Hall London
IFAC – International Auditing Standards ICSAZ Harare

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