Course Title : Advanced Auditing and Assurance

Course Code : AcFn 701

COURSE DESCRIPTION
This course expands on the subject matter covered in the introductory auditing course and also
considers certain specialized areas. External auditors attest to information, or provide reasonable
assurance as to the fairness and dependability of that information. This course focuses on
Advanced Auditing Principles as related to publicly traded organizations, the general public, and
the audit firm in general. This course is a case based course that has selected key real-life cases
and these cases can be collectively discussed in three broad areas; (i) ethics and audit litigation,
(ii) audit planning and internal control structure, and (iii) substantive testing and external
reporting. For each case, the presentation and class discussion will incorporate the related
accounting principles, the appropriate auditing standards and applicable professional standards,
in Ethiopia as well as internationally.

COURSE OBJECTIVE
Upon completion of the course, graduates will be able to:
 examine the role of auditing and other assurance services in our society and the public's
expectations for these services,
 Recognize certain circumstances when the auditor must consider ethical issues.
 Develop a reasonable knowledge of current issues facing the auditor today.
 Prepare solutions to a wide range of auditing problems and cases by applying the
techniques acquired in this course.
 Explore the direction of auditing standards in Ethiopia compared to international
standards.
 Consider some of the risks of material misstatement in financial statements and other
financial information.
 Conduct preliminary research on certain auditing topics. Prepare for the realities of
Auditing while proceeding towards a professional designation.
Teaching/Learning Methods and strategies:
Lecture classes, assigned exercise, case analysis, preparation and presentation of reports require
during critical surveys of empirical literature/article review/, solution of assigned problems,
developing the use of concepts and models, presentation of group practical exercises.
Course Contents
Chapter 1: The Demand for Audit and other Assurance Services
 Nature of Auditing
 Distinguish Between Auditing and Accounting
 The importance of Auditing in reducing information risk
 Causes of Information Risk
 Assurance Services, Attestation Services and other Assurance Services
 Relationship Among Auditors, Client, and External Users
 Nonassurance Services Provided by CPAs
 Types of audits and Auditors
 Requirements for becoming CPA
Chapter 2: Generally Accepted Auditing Standards and types of Audit reports
2.1 What is auditing standards?
2.2 Generally Accepted Auditing Standards
2.2.1` General Standards
2.2.2 Standards of Field Work
2.2.3 Standards of Reporting
2.3 Types of Audit Reports
2.4 Parts of the Standard Unqualified Audit Report
2.5 Conditions for Standard Unqualified Audit Report
2.6 Materiality
2.7 Auditor’s Decision Process
Chapter 3: Professional Ethics
3.1 Introduction
3.2 What Are Ethics
3.3 Need for Ethics
3.4 Why people, Act Unethically
3.5 Ethical Dilemmas
3.6 Rationalizing Unethical Behaviour
3.7 Resolving Ethical Dilemmas
3.8 Special need for Ethical Conduct in Accounting Professions
3.9 AICPA Code of professional conduct
3.10 Sarbanes-Oxley act and other SEC and PCAOB independence requirements
3.11 Audit Committees
Chapter 4: Legal Liability
4.1Changed legal Environment
4.2 Business Failure, Audit Failure, and Audit Risk
4.3 Legal Concepts Affecting Liability
4.4 Legal Terms Affecting CPAs Liability
4.5 Four Major Sources of Auditors Legal Liability
4.6 Auditor’s Defences against Client Suits
4.7 Auditor Defences against Third-Party suits
4.8 The Profession’s Response to Legal Liability
Chapter 5: Audit Responsibilities and Objectives
5.1 Objective of Conducting an Audit of Financial Statements
5.2 Managements Responsibilities
5.3 Auditors Responsibilities
5.4 Financial Statements Cycles
5.5 Management Assertions
5.6 General Transactions – related Audit Objectives
5.7 General Balance – related Audit Objectives
5.8 Relationship of management assertions and audit objectives
5.9 Phase of a Financial Statement Audit
Chapter 6: Audit Evidence
6.1 What is evidence?
6.2 Nature of Evidence and Audit Evidence Decisions
6.3 Audit Program
6.4 Characteristics of Reliable Evidenced
6.5 Relationships among Audit Evidence and Persuasiveness
6.6 Types of Audit Evidence
6.7 Appropriateness of Types of Evidence
6.8 Audit Documentation
6.9 Audit File Contents and Organization
6.10 Types of Supporting Schedules
6.11 Preparation of Audit Documentation
6.12 Effect of Technology
Chapter 7: Audit Planning and Analytical Procedures
7.1 Audit Planning
7.1.1 Why adequate audit planning is essential?
7.2 Risk Terms
7.3 Planning an Audit and Designing an Audit Approach
7.4 Initial Audit Planning
7.5 Preliminary Analytical Procedures
7.6 Types of Analytical Procedures
Chapter 8: EDP/IS Audit
8.1 Definition of EDP/IS Auditing
8.2 Purpose of EDP Auditing
8.3 Techniques for auditing EDP
8.4 Elements of IS Audit
8.5 Risk – Based Approach Audit Plan
8.6 The Audit Process
8.7 Key Challenge.
Assessment:
Case study Reports 30%
Term paper (preparation and presentation) 20%
Final Exam 50%
TOTAL 100%
Reference Books
1. Arens and Loebbecke (1999) Auditing; an Integrated Approach, prentice Hall, New
Jersy, 11th edition.
2. Arens, Scandal and Beasely Auditing and Assurance service; an integrated approach, 11th
edition.
3. Whittington and panny (2005), Principles of Auditing, Mc Graw hill Inc, New York, 11 th
edition.
4. Johaness Kinfu(Prof) and Engda Bayou, (2009), Auditing: Introduction to principles and
practices, 1st edition, Kuraz International publishing Enterprise, Addis Ababa.
5. Ricciute (1998), Auditing and assurance services, 5 th edition, South western College
publishing.
6. Oward F.Stettler (1980), Auditing Principles, 4th edition, prentice hall.