1. NAME OF COURSE  / MODULE AUDIT PROCEDURES
2. COURSE CODE MAD2013
3. NAME(S) OF ACADEMIC STAFF  
4. RATIONALE FOR THE INCLUSION OF THE COURSE/MODULE IN THE PROGRAMME This is an introductory course on Auditing and provides an exposure to students on theory and concepts on how to perform audit on various business cycles to enable them to have basic skills in auditing upon graduation as outlined in the MIA Halatuju 3.
5. SEMESTER & YEAR OFFERED Semester 5/ Year 3
6. TOTAL STUDENT LEARNING TIME (SLT)

 

Face to face:

L T P O
28 25 6

L=lecture ; T=Tutorial; P=Practical; O=Others (Exam)

Total Guided and Independent Learning:

121
7. CREDIT VALUE 121/40= 3.02 (3 credit); 2+2
8. PREREQUISITE (IF ANY) NIL
9. OBJECTIVES 1.    To provide exposure on the need for an external audit and its statutory nature besides introducing them to be a professional Muslim auditor as per Islamic teachings.

2.    To introduce audit concepts, procedures and the relevant auditing standards

3.    To provide exposure on business process and internal controls in companies and the role of auditors to provide recommendation on improvement.

4.    To introduce the various types of audit reports

10. LEARNING OUTCOMES At the end of the course, learners will be able to:

1.   Explain the objectives, responsibility of external auditors and management in the audit of financial statements and fraud, regulators, authorities and professional bodies in the context of relevant statutory and regulatory requirements (LO1-C3)

2.   Apply and distinguish different types of audit procedures to be used, audit files and working papers and sources of audit evidence. (LO2-P3)

3.   Analyze the internal control problems of companies and suggest possible solutions to rectify it. (LO3-CTPS3,C3; LO5-TS3,P3)

4.   Distinguish the types of audit reports to be issued in accordance to different audit circumstances. (LO3- CTPS3,C3; LO5- TS3,P3)

11. TRANSFERABLE SKILLS Student should be able to understand the auditing environment in Malaysia and salient auditing procedures for transaction cycles through a process of lectures, tutorial, Audit simulations, group assignment and case presentation.
12. TEACHING-LEARNING AND ASSESSMENT STRATEGY Teaching-learning strategy:

  • The course will be taught through a combination of formal lectures, Audit simulations, exercise, group work, using authentic materials, informal activities and various textbooks. Collaborative teamwork will be fosters throughout the course. The use of examination and internal reporting assessment will assess the student’s ability to apply theoretical concept in context.

Assessment strategy:

  • Formative
  • Summative
13. SYNOPSIS This course is an introduction course in auditing and it will introduce students to the concepts and principles of auditing. It also explains the role and responsibilities of public accountants, rules and regulation in auditing, preparation of audit draft and reporting. Among the topics covered in the course include concept, process, planning, evidence, documentation and audit report.
14. MODE OF DELIVERY Lectures and tutorial (SCL)
15. ASSESSMENT METHODS AND TYPES
Component %
Continuous Assessment 50%
Final Examination 50%
Total 100%
16. CONTENT OUTLINE OF THE COURSE/MODULE AND SLT PER TOPIC
TOPIC Lecture Tutorial Test/Quiz/Exam Assignment Assessment(Library Search) Self-study Total
An Introduction to Auditing, Statutory and Regulatory Requirement 4 3 6 13
Objectives and Scope of Financial Statement Audit 2 2 3 7
Internal Control System 2 2 3 7
Audit Evidence & Documentation 4 2 6 12
Audit Planning 2 2 3 7
Audit of Revenue Cycle 2 2 3 7
Audit of Purchase Cycle 2 2 3 7
Audit of Cash 2 2 3 7
Audit of Inventory Cycle 2 2 3 7
Audit of Property Plant and Equipment  AND Audit of Long Term Liabilities, Shareholder’s Equity and Income Statement 2 2 3 7
Audit of Payroll Cycle 2 2 3 7
Auditor’s Report 2 2 3 7
Continous Test/Quiz/Assessment 3 5 6 14
FINAL 3 9 12
TOTAL 28 25 6 5 15 42 121
17. REFERENCES Main References:

1.     Arens, A., Elder, R. and Beasly, M., Auditing and Assurance Services. An Integrated Approach. 14th Edition. New Jersey: Prentice Hall, 2011

2.     Malaysian Institute off Accountants Members Online Handbook (Effective Jan 2010), http://www.mia.org.my/handbook/guide

3.     Malaysian Institute of Accountants By-Laws on Professional Ethics, Conduct and Practice (Effective Jan 2011) http://www.mia.org.my/handbook/bylaw_new

4.     Gul F.A. and Mahzan N., Auditing: Theory and Practice in Malaysia. CCH Asia Pte Limited, 2013.

Additional References:

1.     International Federation of Accountants (IFAC), 2011. Guide to Using ISAs in the Audits of Small- and Medium-Sized Entities, Vol 1&2, 3rd Edition. (http://www.ifac.org/sites/default/files/publications/files/SMP-ISA-Audit-Guide-Volume-1-3e.pdf)

2.     Accountants Act 1967 (http://www.mia.org.my/handbook/act)

3.     Audit Act 1957 ( incorporating all amendments up to 1 January 2006)  http://www.agc.gov.my/Akta)

4.     Companies Act 1965

5.     Capital Markets And Services (Amendment) Act 2012 (CMSA)

6.     International Standards on Quality Control (ISQC 1)

7.     Messier, William F &Boh, M. (2007). Auditing & Assurance Services In Malaysia. 3rd Edition, Mc Graw-Hill.

8.     Relevant academic journals and approved accounting standards in Malaysia

 

Mapping of the course/module to the Programme Learning Outcomes

TOPIC

Contact hours (week)

Lesson Learning Outcome (Students are able to…)

CLO KI Teaching & Learning Activities Assessment Tasks
1) AN INTRODUCTION TO AUDITING, STATUTORY AND REGULATORY REQUIREMENT

 

2)    COMPANIES ACT REQUIREMENT

 

3)    OBJECTIVES AND SCOPE OF FINANCIAL STATEMENT AUDIT

 

4 1.     Explain the objectives of external auditing

2.     Differentiate between auditing and accounting

3.     Distinguish between the different types of audit and assurance services

4.     Describe the relevant acts in relation to auditor’s responsibility, appointment, resignation and termination

5.     Describe audit objectives and the basic principles governing audit

6.     Elaborate on auditor’s responsibility in detecting fraud

7.     Relate management assertions to the development of audit objectives

LO1

LO5

TS3
  • Lecture
  • Tutorial – group discussion; active reading
  • Quiz
  • Feedback on tutorial activity
4)    INTERNAL CONTROL SYSTEM

 

2

 

1.     Define internal control.

2.     Relate the importance of internal control to auditors and audit evidence

3.     Analyse the internal control problems of companies and suggest possible solutions to rectify it.

LO1

LO3

LO5

CTPS3

TS3

  • Lecture
  • Tutorial – Case discussion
  • Feedback on tutorial activity
  • TEST
5)    QUALITY CONTROL FOR FIRMS

 

2 1.     Understand the importance of International Standards on Quality control (ISQC)

2.     Explain the applicability of the standards during the audit

LO1

LO5

TS3
  • Lecture
  • Tutorial – Case presentation
  • Feedback on tutorial activity
6)    AUDIT PLANNING AND AUDIT RISK

 

4 1.     Identify steps in audit planning

2.     Explain the importance of having adequate audit planning

3.     Understand the nature of the client’s business operations.

4.     Explain the elements in the audit risk model and how it relates to audit work

LO3

LO5

CTPS3

TS3

  • Lecture
  • Tutorial – group discussion
  • Feedback on tutorial activity
7)    MATERIALITY

 

4  1.     Define materiality in accounting and auditing and its relationship with audit evidence

2.     Elaborate the steps in applying materiality

3.     Understand the importance of materiality in the audit

LO3

LO5

CTPS3

TS3

  • Lecture
  • Tutorial – case discussion & presentation
  • Feedback on tutorial activity
  • Quiz
8)    AUDIT EVIDENCE & AUDIT PROCEDURES

 

4 1.     Explain the types of evidence

2.     Explain the audit procedures used to collect evidence

3.     Describe the process in preparing audit program, audit objectives

4.     Explain analytical procedures and the different types of analytical procedures

LO1

LO3

LO5

 

 

CTPS3

TS3

  • Lecture
  • Tutorial – group discussion
  • Feedback on tutorial activity
  • TEST

 

9)    AUDIT DOCUMENTATION

 

4

1.     Explain the importance of having adequate audit documentation

2.     Explain the fundamental concepts of materiality and risk in auditing

3.     Summarize the different types of working papers

LO1

LO5

 

TS3

  • Lecture
  • Tutorial – group discussion
  • Feedback on tutorial activity
10) AUDIT SAMPLING

 

4 1.   Differentiate between statistical and non-statistical sampling

2.   Explain the steps in performing attribute sampling

3.   Calculate the sampling size and CUER

LO3

LO5

CTPS3

TS3

  • Lecture
  • Tutorial – group discussion
  • Feedback on tutorial activity
  • Quiz
11)  AUDIT OF REVENUE CYCLE

 

4

 

1.   Describe the business function and the related documents and records in sales and collection cycles

2.   Explain the internal control and design, test of controls and substantive tests of transaction for sales, cash receipts

3.   Design and perform tests of detail of balances for accounts receivable

4.   Explain the confirmation procedures for accounts receivables

LO1

LO5

LO2

 

TS5

  • Lecture
  • Tutorial – PBL: Audit Simulations
  • Feedback on tutorial activity
  • Quiz
12)   AUDIT OF PURCHASE CYCLE

 

4 1.   Identify the accounts and classes of transactions in acquisition and payment cycle

2.   Describe the business function and the related documents and records in acquisition and payment cycle

3.   Explain the internal control and design, test of controls and substantive tests of transaction for accounts payable

4.   Design and perform tests of detail of balances for accounts payable

LO1

LO5

LO2

TS3
  • Lecture
  • Tutorial – PBL: Audit Simulations
  • Feedback on tutorial
  • Quiz

 

13) Audit of Cash

 

4 1.     Identify the major types of cash accounts maintained by business

2.     Design audit tests (kiting, bank reconciliation etc) on general cash account

3.     Identify when to extend audit tests of the general account to test further for material fraud

LO1

LO5

LO2

TS3
  • Lecture
  • Tutorial – PBL: Audit Simulations
  • Feedback on tutorial activity
14)  AUDIT OF INVENTORY CYCLE

 

4 1.     Identify the different types of inventory

2.     Describe the business function and the related documents and records in inventory cycle

3.     Discuss the importance of major controls and audit procedures in inventory cycle

4.     Design physical observation audit tests for inventory, test of pricing and compilation

LO1

LO5

LO2

TS3
  • Lecture
  • Tutorial – PBL: Audit Simulations
  • Feedback on tutorial activity
  • Quiz
15) AUDIT OF PROPERTY PLANT AND EQUIPMENT

 

16) AUDIT OF LONG TERM LIABILITIES, SHAREHOLDER’S EQUITY AND INCOME STATEMENT

 

4

1.   Identify the inherent and control risk in property plant and equipment

2.   Design audit tests of property, plant and equipment

3.   Design tests of controls, substantive test of transactions and test of details of balances for share capital stock and retained profits

4.   design audit tests of loan payable and related accounts and transactions

LO1

LO5

LO2

TS3
  • Lecture
  • Tutorial – PBL: Audit Simulations
  • Feedback on tutorial activity
17)  AUDIT OF PAYROLL CYCLE

 

4

1.     Identify accounts and transactions in payroll cycle

2.     Describe business functions and documents in payroll cycle

3.     Design tests of controls and substantive tests of transaction for payroll cycle

4.     Design tests of detail of balances for accounts in payroll cycle

LO1

LO5

LO2

 

TS3

  • Lecture
  • Tutorial – PBL: Audit Simulations
  • Feedback on tutorial activity
  • Quiz

 

18)  AUDITOR’S REPORT

 

4 1.     Specify the conditions required to issue the standard unqualified audit report

2.     Explain the types of audit report

3.     Elaborate on the circumstances that lead to the issuance of unqualified and modified audit reports

4.     Determine the appropriate audit report for a given audit situation

LO1

LO3

CTPS3
  • Lecture
  • Tutorial – group discussion
  • Feedback on tutorial activity
  • Quiz