Detailed syllabus A. Laws and regulations on audit and assurance engagements 20% Laws, regulations and ethical issues 1. Advise on technical, professional and ethical issues that may arise during assurance engagements in the public and private sectors including evaluation and communication with any party to the engagement. 2. Identify and make judgements on when it may be appropriate to refer a matter to a senior colleague or for third party advice or consultation. 3. Identify and explain the nature and purposes of laws, regulations, standards and codes in the context of assurance engagements. 4. Evaluate, explain and communicate the process and issues involved in standards setting process at national and international levels. 5. Evaluate and communicate the interactions between national laws and regulations and the requirements of an assurance engagement. 6. Evaluate and communicate the differences between various jurisdictions and how they deal with audit issues including national and international approaches such as the US Sarbanes-Oxley and related requirements for audit. 7. Evaluate and explain how audits may fail to meet users’ expectations. 8. Evaluate and explain the extent of legal liabilities including criminal and civil law liabilities and professional negligence and how they can be mitigated. 9. Evaluate organisation’s internal audit and code of ethics. B. Accepting professional engagements and managing assignments 15% 1. Accepting engagements (a) Discuss the processes that must be followed before acceptance of audit engagements. (b) Analyse and evaluate the issues that may arise during the process of obtaining audit work. (c) Identify and explain the legal, professional and ethical issues that may arise during the acceptance of assurance or audit assignments. (d) Analyse and evaluate the potential issues that determine the nature, scope and extent of an assurance or audit engagement. (e) Discuss the basic elements of an engagement letter, including those agreed with the client or those imposed by laws and regulations 2. Practice management (a) Evaluate and apply appropriate procedures and policies for management of an assurance or audit engagement. (b) Evaluate and apply appropriate quality control measures that may be used by a firm during the course of an assurance or audit engagement. (c) Identify and evaluate the extent to which assurance and audit functions within an entity can be used or relied upon. (d) Evaluate and apply appropriate monitoring and review procedures to effectively manage an audit or assurance engagement. (e) Identify and explain the purposes of external monitoring of audit and assurance assignments and how this might ensure engagement or firm’s quality. (f) Identify and evaluate the considerations by an auditor of risk issues identified prior to accepting an engagement. C. Planning and undertaking audit work 30% 1. Overall audit strategy (a) Analyse, evaluate and explain the key areas of a business that are important to understand in developing an effective strategy or plan based on a business scenario. (ISA 300 – Planning an audit of financial statements) (b) Analyse and evaluate the relevant techniques needed for an effective understanding of the audit work. (c) Analyse and evaluate the situations when third party expertise may be required (ISA 620 - Using the Work of an Auditor’s Expert) (d) Evaluate and advise on elements of audit risks, including inherent and control (risk of material misstatement), sampling and nonsampling (detection risk) and their relationships with audit planning procedures (ISA 315 – Identifying and Assessing the Risk of Material Misstatement through Understanding the Entity and its Environment). (e) Identify and evaluate the components of risk for any assurance engagement. (f) Evaluate and explain how business process effectiveness may affect an audit assignment. (g) Identify and evaluate the risks arising from accounting manipulation, error, fraud or other irregularities in a business scenario. (h) Identify and evaluate the risks arising from business and financial issues in a business scenario. (i) Evaluate and apply judgements and measures of materiality in carrying out an audit or assurance engagement (ISA 320 – Materiality in Planning and Performing an Audit). (j) Evaluate and apply analytical procedures that may be used to plan an audit or assurance engagement, including data analytics. (k) Analyse and evaluate how risk and materiality judgements affect the planning of an assurance or audit engagement, including the nature, timing and extent of work. (l) Develop an audit plan, justifying judgements made on an audit or assurance engagement based on a business scenario, including considerations relating to: (i) Materiality decisions; (ii) Internal control assessments including information technology (IT) ; (iii) Reliance on internal audit, specialists and the work of other auditors; (iv)Use of client’s generated data, information and reports;