1.

1 ACC 213: AUDITING AND ASSURANCE SERVICES II

i Course title: ACC 213: AUDITING AND ASSURANCE SERVICES II

ii Course aim: This course aims at equipping students with profound

knowledge and skills in Auditing and audit assurance
services. To deepen the students understanding of the auditing
methodology and practices in line with ISAs/ISAEs and
expose them to the detailed nature of audit evidence, and the
preparation of audit report
iii Course expected learning At the end of this course, the student should be able to;
outcome(s):  Apply sampling techniques in carrying out audit
assignments
 Gather evidences to verify the items contained in the
Financial Statements
 Deliver audit and assurance services in conformity
with the professional and legal framework within
which auditing is practiced.
 Be able to analyse current issues and developments
relating to auditing and assurance services.

iv Course status-core or elective: Core

v Credit rating: 10 credit points
vi Total hours spent: 100
vii Course Content: 1. AUDIT SAMPLING FOR AUDITING
 Meaning and importance of sampling in auditing
 Basic terminologies relating to sampling (population,
sample size, sampling risk, confidence level, tolerable
and expected error).
 Types of audit sampling (non-statistical vs. statistical
sampling)
 Statistical sampling:
 Types of statistical
sampling (attribute,
monetary
unit/PPS, and classical
sampling):
 How to plan,
conduct and draw
conclusions from
attribute sampling.
 Non-statistical sampling:
 Determining the
 sample size
 Selecting the
sample
 Calculating the
computed upper
deviation rate
 Auditing Processes Relating to Statement of
Comprehensive Income Balances
2. AUDITING THE REVENUE PROCESS
 Overview of the revenue process and issues in
revenue recognition
 Inherent risks and control risk assessment
 Test of controls in revenue transaction (cash vs. credit
sales, sales return and allowances)
 Verification of accounts receivables and related
balances
 Substantive analytical procedures and tests of details.
 Confirmation process for accounts receivable.
 Test of details of classes of transactions, accounts
balances and disclosures.
3. AUDITING THE PURCHASING AND EXPENSES
PROCESSES
 Overview of purchasing process and issues on
expenses and liability
 Inherent and control risk assessment
 Test of control in purchasing and expenses
transactions
 Test of control in cash disbursement and purchase
return transactions
 Verification of accounts payable and accrued
expenses.
 Test of details of classes of transactions, accounts
balances and disclosures.
 Auditing the inventory management process
4. OVERVIEW OF THE INVENTORY
MANAGEMENT PROCESS
 Inherent and control risks assessment
 Test of controls in inventory management
 Auditing the inventory and conducting substantive
analytical procedures
 Auditing standard costs and observing physical
inventory.
 Test of details of classes of transactions, accounts
balances and disclosures.
 Auditing Processes in the Statement of Financial
position Items
5. AUDITING PROPERTY MANAGEMENT
PROCESS
 What is property, plants and equipment
 Inherent risk assessment in the audit of property, plant
and machinery
 Control risk assessment in property management audit
of property, plant and machinery
 Substantive procedure – property, plant and
equipment
 Substantive analytical procedures audit of property,
plant and machinery
 Test of details of transactions, account balances and
disclosure of audit of property, plant and machinery
6. AUDITING PREPAID EXPENSES
 Common types of prepaid expenses (e.g. insurance,
utilities, etc)
 Inherent risk assessment for prepaid expenses
 Control risk assessment for prepaid expenses
 Substantive procedures for prepaid expenses (e.g.
prepaid insurance)
7. AUDITING CASH AND INVESTMENTS
 Cash and effects of other business processes
 Types of bank accounts
 Substantive analytical procedures for cash
 Substantive tests of details of transactions and
balances
 Auditing Investments
 Control risk assessment for investments
 Substantive procedures for testing investments.
8. AUDITING LONG-TERM LIABILITIES AND
STOCKHOLDERS’ EQUITY
 Auditing long-term debt
 Control risk assessment for long-term debt
 Substantive procedures for long-term debt
 Audit stockholders’ equity
 Control risk assessment for stockholders’ equity
 Auditing equity capital accounts
 Auditing dividends and retained earnings
 Completing the Audit of Financial Statements and
Reporting
9. COMPLETING THE ENGAGEMENT
 Review for contingent liabilities commitments
 Review of subsequent events
 Final evidence evaluation processes
 Communication with those charged with governance
and management
10. REPORTS ON AUDITED FINANCIAL
STATEMENTS
 The standard audit report with an Unmodified
Opinion
  An emphasis of matter paragraph
 Audit report with Modification to the opinion (and
conditions leading to modification)
11. ASSURANCE, RELATED SERVICES AND
INTERNAL AUDIT
 What are assurance services?
 International Framework for Assurance engagement
 Assurance engagement other than audits or review of
historical financial information (and examples
of assurance services)
 Related services
 Internal auditing.
 Comprehensive Audit
 Performance and operational audit
 Management audit
 Value for money audit in public sectors
12. FORENSIC AND FRAUD INVESTIGATION
 Theories on fraud (the fraud triangle)
 Definition and objectives of investigation
 Different Classes Of investigation and procedure to
each class
 Features of investigation and duties of an investigator
 Initial planning and fact finding
 Difference between Investigation and Statutory Audit
 Investigator’s Report.
13. AUDITING OF COMPUTERIZED SYSTEMS
 Definitions and explanations of Computer terms
 Internal controls in a Computer Environment
 General Computer (CIS) Installation Controls
 Computer (CIS) Application Controls
 Computer-Assisted Audit techniques (CAATs)
 Uses of Computer-Assisted Audit techniques
(CAATs)
 Auditor’s Operational Standards with Computers
(CIS).
14. AUDIT AND COOPERATE GOVERNANCE
ISSUES
 Enhancing Auditors Independence
 Audit Committee
 Rotation of Auditors
 Provision of non-audit services to clients
 Laws and codes in an audit of financial statements
(e.g. Sarbanes and Oxleys, OECD code etc
 Social and environmental audits
 Communicating Audit matters

viii Teaching and learning Lectures, seminars, assignments and independent study
 activities:

ix Assessment Methods: Test, Individual Assignment, Group Assignment and Final

examination.
x Reading list : Books:

 Edition. John Wiley & Sons, Ltd.

 Eilfesen, A. (2009).Auditing and Assurance
Services. 2nd ed. UK: McGraw- Hill Education.
 Hayes, R.et al.(2014).Principles of Auditing, An
Introduction to International Standards on
Auditing. 3rd ed. UK: Pearson Education.
 IFAC (2014). Handbook on International
Standards on Auditing. New York.
 Porter, B. et al (2014).Principles of External
Auditing.4th
 Randal J et al (2013). Auditing and Assurance
Services: An Integrated Approach, 15th ed.
Pearson
 Relevant Acts of Government on the conduct of
Audits in Tanzania, Government Printers (e.g.
Companies Act, 2002; Public Audit Act, 2008;
Public Finance Act, 2001 (with latest
amendments); Public Procurement Act, 2011 etc)