COMSATS University Islamabad Lahore Campus

Department of Management Sciences

COURSE HANDBOOK

1 Course Title Auditing

2 Course Code MGT- 370
3 Credit Hours 3(3,0)
4 Semester FA-2023
5 Resource Person Rashid Waheed Qureshi
6 Supporting Team Members None
7 Contact Hours (Theory) 3 hours per week
8 Contact Hours (Lab) Not Applicable
9 Office Hours
10 Course Introduction
11 Attendance As per CUI Policy (No excuse will be accepted)

INTRODUCTION

This is a one of the basic course in courses in BS accounting & Finance (also included in BBA
finance specialization).
The main objective of this course is to prepare participant for one the core functions of Auditing. This
course is design to create sound understanding of importance of audit function within business
environment. How the auditors perform the audit using different standards and procedure. This course
will also enable the participants to understand the Code of ethics, differences between external and
internal audit, internal controls requirement for businesses, audit sampling, audit evidences and how
they can be obtained and assessed and how to perform risk assessment in different business
environments.

This is a 3 credit hour course, comprising 3 hours of teaching per week.

AIMS FOR THIS COURSE

After studying this course the participants should be able:

 Importance of Audit in business environment.
 Basic audit frame work
 Different types of audits and other engagements.
 Scope of external and internal audits.
 Internal controls related to businesses.
 Audit evidence and how they are obtained.
 Using work of others and checking its reliability.

PREREQUISITES

The students who studied Financial Accounting can take the course.
TEACHINGS AND LEARNING STRATEGIES

The Course of Auditing is designed to provide conceptual and analytical skills to help prepare
students to be effective managers as be able to understand the implement the audit procedures in
dynamic business environment in order to ensure transparency in accounting and other business
processes.
The learning is based on and not limited to the combination of textbook readings, attending lectures
and tutorials.

LEARNING OUTCOMES

Upon successful completion of the course, the students will be able to understand and demonstrate:
 Fundamental audit concepts, audit function and the reasons for an audit.
 Appropriate risk assessments of financial statement assertions;
 Thoughtful analysis of financial and non-financial data;
 Evaluations of internal controls, incorporating the additional management responsibilities
 The audit process and the techniques used by auditors including risk analysis, evidence
collection and evaluation, computer assisted audit techniques and audit reporting.
 Design of audit programs for financial statement audits, and

MY TEACHING PHILOSOPHY

I see the opportunity of application of the concepts delivered during lecture as vitally important for
learning. It will be my job to provide you with the theory with application oriented assignments. I
assure you that with your active participation in class and assignments, you would be able to develop
your management skill set along enjoying the subject.

ASSESSMENT SCHEME
As per CUI Policy

READING MATERIALS

Core texts
1. ACCA F8 Text Implementing Audit Procedures
2. International Audit standards
3. Principles of Auditing: An Introduction to International Standards on Auditing 3rd edition
Rick Hayes
Additional reading
1. Auditing: Principles and Procedures Khawaja Amjad Saeed
2. Practical Auditing by Ernest Evan Spicer

COURSE REQUIREMENTS AND EXPECTATIONS

1. Letter grades will be assigned based on the university standard.

2. Regular classroom attendance is mandatory. Absence from lectures will negatively affect your
grade as per university rules. Attendance is entered into the COMSIS system daily.
3. All cell phones should be turned off during class. Do not involve inside conversations.
ACADEMIC DISHONESTY

Academic dishonesty is an offence that will not be tolerated in any form. Any student who is involved
in any such activity will be penalised to the fullest extent possible allowed by university regulations.
If you have any doubts about whether an action constitutes academic dishonesty, before consult with
your instructor before taking the action.

Plagiarism and Cheating: the presentation by a student as his or her own work but is actually stolen
from someone else. Whenever a student submits a piece of writing claiming it to be his own
authorship, it is generally understood that all the ideas, opinions, facts, figures, conclusions, revisions,
words are the student’s original work, unless he/she has explicitly indicated otherwise using citations,
footnotes, attribution in the text, and/or used quotation marks.

The use of unauthorised material during an examination in order to secure or give help will not be
tolerated. Academic dishonesty also encompasses unauthorised copying and distribution of
examinations, assignments, reports, projects or term papers or the presentation of unacknowledged
material as if it were the student’s own work.

A person failing to acknowledge and recognise the contribution of the original author, will be held
responsible under academic deception. Such action will necessitate measures to discipline the student
under the University’s academic dishonesty policy. Any academic dishonesty would call for swift
punitive action by the faculty and the names of the students involved would be reported to the
concerned Head of Department.
Course Outline MGT370 Auditing Prerequisite MGT (131)

1,2. Introduction to Auditing and importance of auditing in Business environment

Introduction to Auditing basic definition, introduction of international bodies such as, the
International Federation of Accountants (IFAC),
The framework of International Standards on Auditing (ISAs)
Importance of auditing in Business environment. Basic concepts of “True and Fair View”

3,4. Audit framework and regulations

Audit and other assurance engagements
Audit frame nature and scope of audit, governing work and regulations
Vouching process
Financial statement assertions
Importance financial statement assertion in an audit

5,6. Code of ethics

Standard Code of ethics for Auditors
Role of different bodies of professional accounts
Role of code of ethics in practical environment

7, 8. Internal Audit and its importance

Introduction to Internal Audit importance
Importance Internal Audit
How it supports the business in creating check and balances

9, 10. Scope of internal audit function

Constitution of internal audit committee
How this function can be outsourced
Differences between internal and external Audit
To what extent external auditor can rely upon the internal auditor

11, 12. Internal control mechanisms

Different internal controls with respect to different industries
Risk assessment of the clients and industry wise risk assessment
Internal control mechanisms, such as segregation of duties, authorisation etc.

13, 14. Evaluation of internal controls

 Introduction of internal controls
Different types of internal controls in an organisation
How auditor evaluates internal controls
Evaluation of internal controls procedures
Internal control environment

15, 16. Audit planning

Objectives of audit planning
Basic principles of audit planning
Role of audit planning in timely completion of audit

17, 18. Risk assessment of the clients

Concept of materiality
Assessment of risks related to materiality
Analytical procedures adopted by auditors
Documentation related to audit

19, 20. Audit evidence sources of audit evidence

Basic definition of Audit evidence
What constitutes an audit evidence?
Sources of audit evidence

21, 22. Obtaining audit evidence and their reliability

Obtaining audit evidence and their reliability
Working paper & Analytical procedures
Analytical procedures and their importance

23, 24. Using work of other

When auditor is required to use work of experts
Hiring an expert for valuation
Evaluating the work of experts
How to it can be used in formation of audit opinion.

25, 26. Audit sampling procedures

Introduction of audit sampling
Sampling and tolerable errors
Statistical and non-statistical sampling techniques

27, 28. Audit review

Relation between concept of Going concern and audit
Impact of subsequent events and their impact on an organization
Final review of an audit and completion of an audit

29, 30. Audit reports

Importance of audit report and its standard format
Different section of audit report
Different types of audit reports