IPA005 Assurance and Audit Services

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This unit examines advanced assurance and audit services with a focus on the financial report audit, and looks closely at the ever-increasing regulatory and legal environment which impacts the accounting profession. The unit provides an overview of planning, execution and reporting phases of an assurance and audit engagement.

Unit Learning Outcomes

  • Critically evaluate the theories regarding demand for and supply of audit and assurance services of both a financial and non-financial nature. 
  • Use professional and ethical judgement in applying relevant legal and professional pronouncements to all stages of a given assurance engagement. 
  • Apply the concepts and processes used by audit and assurance service providers to plan and perform assurance engagements in a professional manner. 
  • Describe the reports provided by audit and assurance service providers, in their various forms, to various stakeholders.

Topic outlines

  1. Audit & assurance overview 
  2. Practice risk management 
  3. Client acceptance and risk assessment 
  4. Audit evidence 
  5. Gaining an understanding of and testing internal controls 
  6. Sampling – risk response phase of audit 
  7. Performing substantive procedures and substantive testing 
  8. Completing and reporting the audit 
  9. Audit considerations for small to medium enterprises 
  10. Audit considerations for not for profit engagements

Prescribed Text
Auditing and Assurance Services in Australia, 6e, Gay, G., and R. Simnett, (2017), McGraw Hill Education Australia: North Ryde

Unit Mode
Cloud (study anywhere)

Study Commitment
150 hours over the trimester

Assessments

One exam worth 100% of the final score.

The examination will be a two hour closed book examination with additional reading time. The exam will consist of a number of short answer, or problem based questions. You can typically expect four to seven questions in the exam.

All examinations will be held in venues notified by Deakin University. All exams will be held during the exam periods set by the University. Students will be notified of the exact date, time and location of the exam, approximately four weeks before the exam.

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Detailed Topics

Topic 1: Audit and assurance overview
a) The framework for assurance engagements and the types of audit engagements
b) The fundamental principles underlying an audit
c) The reasons which give rise to the demand for auditing
d) The expectation gap

Topic 2: The auditing profession
a) The attributes of a profession
b) The regulation of auditing
c) The characteristics of the accounting bodies
d) Quality control within audit firms
e) Auditors liability

Topic 3: Ethics and independence
a) The nature and importance of ethics
b) The accounting bodies code of Ethics
c) Auditor independence
d) Corporate governance

Topic 4: Client acceptance and understanding the entity
a) The importance of the client acceptance decision
b) The need for audit planning
c) Understand the entity and its environment
d) Assess the entity’s business risk
e) Audit strategy and audit programs
f) Analytical Procedures

Topic 5: Audit risk, inherent risk and other business risks
a) Define audit risk and inherent risk
b) Assessing inherent risk
c) Fraud risk
d) Related parties
e) Going concern

Topic 6: Control risk and tests of controls
a) Internal controls – concept, objectives and components
b) Auditor understanding of internal controls
c) User controls, IT controls, general and application controls, automated and manual controls
d) Internal audit function
e) When tests of control are conducted
f) Type of and evidence from control tests

Topic 7: Substantive testing and sampling
a) Control vs substantive tests
b) Audit objectives and common procedures
c) Computer assisted audit techniques
d) Audit sampling – objectives, planning and design
e) Sampling techniques

Topic 8: Completing the audit
a) Date of auditor’s report
b) Subsequent events
c) Written representations – management and solicitor
d) Review process
e) Final assessment of audit risk, materiality and going concern

Topic 9: The auditor’s report
a) Structure and qualitative characteristics of the report
b) Types of auditor’s reports
c) Departures from a standardised report
d) Communication

Topic 10: Auditing small to medium enterprises and not for profits
a) Control issues
b) Dominant management/owner
c) Specific audit issues