FACULTY: ECONOMICS AND MANAGEMENT SCIENCES

DEPARTMENT: ACCOUNTING, AUDITING AND INCOME TAX

COURSE OUTLINE AND INFORMATION GUIDE

MODULE: CAUA 3752
MODULE TITLE: AUDITING 1B
ACADEMIC YEAR: 2017

LECTURER

LECTURER: S Schwartz
OFFICE LOCATION: Room X208, X Block
CONTACT NO.: 061-206 3714
E-MAIL: sschwartz@unam.na

LEARNING OUTCOMES FOR THIS MODULE

This module is aimed at crystalizing theoretical concepts for the purpose of introducing
auditing to the student with an increased focus.

CONSULTATION HOURS:
Consultation times will be advised to students during course of first lecture week of the
semester. Also those times will be displayed outside the door of Room X208.
Should you require a specific appointment outside of consultation periods, please arrange in
advance with the lecturer.

RULES and REGULATIONS

Pre-requisite
It is assumed that students have a thorough understanding of and are proficient in all topics
covered in CAUA 3751 and deemed to be embedded knowledge required by students.

Attendance and Punctuality

Students are expected to attend all lectures.
Late comers may not be allowed into class after 15 minutes of starting time.
Attendance registers will be strictly maintained as a student must attend 80% of all lectures in
order to be admitted for the final exam.

Assignments
Assignments must be submitted on time and necessary submission and submission
instructions will be given for each assignment.
Mark queries
Marks may be queried within the specified period of time as communicated by the lecturer.

Work ethic
It is expected that students realize that academic success is 80% dependent upon own effort.
Also honesty is paramount.

TEACHING STRATEGY:
This course is planned for 4 lecture contact hours per week for 14 weeks to total 56 lecture
contact hours. It should be acknowledged that learning time should be much more and be
divided approximately as follows:
Contact with lecturer 56 hours
Unannounced tutorials/class tests 14 hours
Test and examinations 8 hours
Self-study 82 hours
Total learning time 160 hours

Self-study includes pre-requisite reading for lectures, homework and revision of work covered
during lecturers. Remember, this strategy is a general one and should be applied to personal
needs, where more time is needed.

ASSESSMENT:
Students will only be promoted on the basis of continuous work done throughout the semester
as well as performance in semester tests.
The CA mark will be weighted and calculated as follows:

% of CA
Unseen/unannounced class tests/Assignments 10%
Term test 1 – Date to be confirmed 30%
Term test 2 – Date to be confirmed 30%
Term test 3 – Date to be confirmed 30%
Total % of CA 100%

A student will write a minimum of three class tests and various surprise/class tests or
assignments in the semester. Kindly note that of all 3 class tests written, only the best 2 will
be considered for the CA mark.
A candidate must obtain a minimum of 40% average for assessments to be able to sit for the
exam.
Continuous assessment (CA) mark contributes 50% to your final mark and the final exam,
which consists of a three hour exam paper, will contribute 50%.
Students are advised to make sure that their CA Marks are correct before the CA
submission deadline.

PRESCIBED BOOK
Jackson & Stent 9th Edition. AUDITING NOTES (“AN”)
Graded Questions on Auditing 2017, Author: Gowar & Jackson

Recommended books:
‘Dynamic Auditing’ and ‘Graded questions on Auditing’
WEEK TOPIC CHAPTER
BEGINNING
17 July 2016 – 24 CHAPTER 7 - IMPORTANT ELEMENTS OF THE AUDIT Chapter 7
July 2017 PROCESS
(2 weeks)
UNDERSTANDING AUDIT RISK

 Introduction
 The inherent limitations of an audit
 The link between audit risk and the audit process
 The components of audit risk
 Inherent Risk
 Control Risk
 Detection risk
 Relationships between different risks

UNDERSTANDING THE ENTITY AND ITS ENVIRONMENT

Introduction

Risk assessment procedures and related activities

 Client acceptance and continuance procedures

 Previous experience with the entity
 Inquiries of management
 Observation
 Inspection
 Analytical procedures
 Discussion among audit team

The entity and its environment

 Industry, regulatory and other external factors

 The nature of the entity
 The entity’s selection of accounting policies
 The entity’s objectives and strategies and related
business risks
 Measurement and review of the entity’s financial
performance

31 July 2017 – 07 CHAPTER 7 - IMPORTANT ELEMENTS OF THE AUDIT Chapter 7

August 2017 PROCESS & Chapter
(2 weeks) 5
The entity’s internal control

 Control environment
 The entity’s risk assessment process
 The information system
  Control activities
 Monitoring of controls

Significant risks

The concept of materiality

 Introduction
 The nature of materiality
 Planning materiality and performance materiality
 Materiality at the evaluating stage (Final materiality)
 Conclusion

The auditor’s responsibilities relating to fraud in an audit

of financial statements

 Introduction
 Auditor’s objective
 Responsibility of management and those charged with
governance
 Responsibilities of the auditor
 Responses to the risk of maternal misstatement due to
fraud
 Fraud risk factors
 Communication with management, those charged with
governance and others
 Fraud and retention of clients

14 August 2017 – CHAPTER 8 – COMPUTER AUDIT – THE BASICS Chapter 8

21 August 2017 &9
(2 weeks)  Introduction
 General Controls
 Application Controls
 CAAT’s

CHAPTER 9 – COMPUTER AUDIT – NETWORKS &

RELATED CONCEPTS

 Introduction
 Networks
 Databases
 Electronic Messaging Systems
 Internet
 Computer Bureaux
 Viruses
 28 August – 1 2ND SEMESTER RECESS
September 2017
04 September – 11 CHAPTER 15 – GOING CONERN AND FACTUAL Chapter 15
September 2017 INSOLVENCY & 16
(2 weeks)
GOING CONCERN

 Introduction
 The auditor’s interest in the going concern ability of the
client
 The audit plan for going concern
 Obtaining information about going concern
 Mitigating factors and management plans
 Audit conclusions
 The auditor’s report

FACTUAL INSOLVENCY

 Introduction
 The irregularities which may arise when a factually
insolvent company continues to trade
 Factual insolvency and sec 45 of the Auditing
Professions Act 2005

We will exclude the following:

 Subordination Agreements
 Auditing a subordination agreement

CHAPTER 16 – RELIANCE ON OTHER PARTIES

 Introduction

ISA 600 – SPECIAL CONSIDERATIONS – AUDITS OF

GROUP FINANCIAL STATEMENTS (INCLUDING THE
WORK OF COMPONENT AUDITORS)

ISA 610 - USING THE WORK OF INTERNAL AUDITORS

ISA 620 – USING THE WORK OF AN AUDITOR’S EXPERT

18 September – 25 CHAPTER 17 - SUNDRY TOPICS Chapter 17

September 2017
(2 weeks) INITIAL AUDIT ENGAGEMENTS – OPENING BALANCES
(IAS 510)

 Introduction
 Auditor’s objective
 Procedures to be adopted
  Reporting considerations

QUALITY CONTROL FOR AN AUDIT OF FINANCIAL

STATEMENTS

 Introduction
 Leadership responsibility
 Ethical requirements
 Independence
 Acceptance and continuance of client relationships
 Assignment of engagement teams
 Engagement performance
 Consultation and differences of opinion
 Engagement quality control review
 Monitoring
 Conclusion

To explain the flow & link of all that the students have
learned so far.

SUBSEQUENT EVENTS (ISA 560)

 Introduction
 Applicable statements
 Definitions
 Types of subsequent events
 Events occurring between the date of the financial
statements and the date of the auditor’s report
 Facts which become known to the auditor after the date
of the auditor’s report but before the date the financial
statements are issued
 Facts which become known to the auditor after the
financial statements have been issued
 Action to prevent further reliance on the audit report

RELATED PARTIES (ISA 550)

 Introduction
 Why the auditor is concerned about the related party
transactions
 Definitions
 Types of requirements

DOCUMENTATION (ISA 230 & ISQC1)

 Compliance with standards

  General points and basic requirements

SPECIFIC TYPES OF AUDIT EVIDENCE

 External confirmations (ISA 505)

 Enquiries regarding litigation and claims (SAAPS 4)
 External confirmations from financial institutions
(SAAPS 6)
 Written representations (ISA 580)
 Analytical procedures (ISA 520)

We will exclude the following:

 Audit considerations relating to an entity using a

service organization (ISA 402)

02 October – 10 THE AUDIT REPORT Chapter 18

October 2017
(2 weeks)  Introduction
 Structure and content of unmodified audit report (ISA
700 and SAAPS 3)
 Modifications to the auditor’s opinion in the
independent auditor’s report (ISA 705)
 Compiling a report where the opinion is modified
 Communicating key audit matters in the independent
auditor’s report (ISA 701)
 Emphasis of matter paragraphs and other matter
paragraphs in the independent auditor’s report (ISA
706)
 The auditor’s responsibilities relating to other
information (ISA 720)
 Comparative information – Corresponding figures and
comparative financial statements (ISA 710)
 The effect of a reportable irregularity (Sec 45 – APA)
on the audit report.

13 October 2017 LECTURES END