Auditing & Ethics

Primary and secondary objectives of audit · Types of audit: statutory, internal, tax, secretarial · Reasonable vs absolute assurance; inherent limitations

Overall audit strategy, audit plan, audit programme · Materiality — planning, performance, trivial threshold · Audit risk model: inherent risk, control risk, detection risk

Working papers — ownership, confidentiality, 7-year retention · Sufficiency and appropriateness of audit evidence · Evidence reliability hierarchy; audit procedures

COSO framework — five components of internal control · Preventive, detective, corrective controls; segregation of duties · Tests of controls vs substantive procedures; SA 265 deficiencies

Vouching income statement vs verification of balance sheet · Audit of debtors, inventory (SA 501), fixed assets, cash · External confirmations (SA 505); cut-off testing

Appointment: first auditor, AGM appointment, casual vacancy · Disqualifications (s.141); mandatory rotation — 10-year rule · Rights and duties (s.143); CARO 2020 reporting requirements

SA 700 unmodified report — sections in sequence · Modified opinions: qualified, adverse, disclaimer (SA 705) · Emphasis of Matter, Other Matter (SA 706); going concern (SA 570)

Bank audit: NPA classification, provisioning, LFAR · CAG: Article 148, tenure, types of government audit · Regularity audit, propriety audit, performance audit

Statistical vs non-statistical sampling; selection methods · Sampling risk vs non-sampling risk; sample size factors · SA 520 analytical procedures — planning, substantive, final review

Five fundamental principles; independence of mind vs appearance · Threats: self-interest, self-review, advocacy, familiarity, intimidation · Misconduct under Schedule I and II of CA Act 1949; disciplinary process