Course Synopsis

This course will introduce the various principles and concepts applicable in auditing. It is a
introductory course that examines the role of the auditor on financial statements reporting
1
the need for auditing in organizations and is meant to be applicable to both
11111111
external audits. Students will be provided with a solid foundation in auditing theory an
concepts. Emphasis will be placed on the audit objective, audit approach and the decisions a
auditor makes in gathering audit evidence and its evaluation.

Rationale
The knowledge to be imparted by this course is fundamental for those aspiring
accountants and especially those intending to practice as auditors.

Aims and Learning Objectives

On completion of the course, students should be able to:
 Demonstrate knowledge of nature, purpose, and scope of auditing.
 Demonstrate knowledge of regulatory regime of auditing profession: legislation, auditing
CODE AND TITLE: standards ACC 309: PRINCIPLES
and professional OF AUDITING
code of ethics for professional accountants.
 Demonstrate knowledge of auditors’ liability to clients and third parties.
Credits  Explain the concepts of materiality, audit risk and audit evidence.
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 Explain the meaning, importance, and limitations of different types of internal
including internal auditing. C
Type (Core/Optional/Elective/General Education Course)Education Course) o
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e
Pre-requisites A
C
C
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0
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Co-requisites N
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Course Instructor: Mr. G. Tobedza: Office: 245/213. Telephone: 3554079

Email: [email protected]; WhatsApp no.73146699
Consultation hours:
Tuesday: 09:00 – 11:00
Thursday 11:00 – 01:00

Course Synopsis
This course will introduce the various principles and concepts applicable in auditing. It is an
introductory course that examines the role of the auditor on financial statements reporting and
the need for auditing in organizations and is meant to be applicable to both internal and
external audits. Students will be provided with a solid foundation in auditing theory and
concepts. Emphasis will be placed on the audit objective, audit approach and the decisions an
auditor makes in gathering audit evidence and its evaluation.

Rationale
The knowledge to be imparted by this course is fundamental for those aspiring to work as
accountants and especially those intending to practice as auditors.

Aims and Learning Objectives

On completion of the course, students should be able to:
 Demonstrate knowledge of nature, purpose, and scope of auditing.
 Demonstrate knowledge of regulatory regime of auditing profession: legislation, auditing
standards and professional code of ethics for professional accountants.
 Demonstrate knowledge of auditors’ liability to clients and third parties.
 Explain the concepts of materiality, audit risk and audit evidence.
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 Explain the meaning, importance, and limitations of different types of internal controls
including internal auditing.
 Demonstrate knowledge of procedures in the audit process.
 Explain the purpose, timing, and content of the engagement letter.
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Course Outline
 The nature, purpose, and scope of auditing
- Definition and objectives of auditing
- The concept of ‘true and fair’
- The demand for auditing and its benefits
- Types of audits and auditors
 The regulatory framework and legal environment of auditing
- Auditing standards: definition, scope, authority, and structure
- Standards set by the IAASB
- Quality control in auditing – ISQC 1
- The Code for Professional Accountants: Fundamental principles of ethics for
professional accountants, threats, and safeguards; auditor’s independence meaning
and threats.
- The Companies Act: Who can become an auditor; appointment, removal, and
resignation of an auditor; statutory duties and rights of an auditor.
- The Accountants’ Act: Requirement to register with BICA.
- Auditors’ legal liability: concept of due care, liability to client and third party.

 Fundamental concepts of auditing

- The concept of materiality: definition, importance, and steps in applying materiality.
- Audit risk: definition and the various components of risk; relationship between audit
risk and materiality.
- Audit evidence: meaning and Audit Evidence Decisions; criteria for assessing
sufficiency and appropriateness of evidence, reliability of evidence; types of evidence
and evidence gathering techniques; relationship between audit evidence, audit risk
and materiality.
- Documenting audit evidence: the concept of audit working papers and categories of
working papers.

 Internal control
- Definition and importance of internal control system
- Classification of internal controls
- Components of internal controls
- Objectives and types of internal controls
- Limitations of internal controls
- Internal audit as part of internal control system: objectives and scope of internal audit
- Elements of internal audit
- Relationship between internal and external audit and their differences
- Criteria for external auditor’s assessment of internal auditor
- Internal controls in computerized environment
- Internal control in small companies and their impact on the audit
 Planning the audit engagement
- The stages of an audit (‘chronology’)
- The letter of engagement: purpose and contents – ISA 210

Teaching Methods
The major mode of teaching will be formal lectures and class discussions based on selected
audit problems. Students are advised to adopt an attitude towards independent learning and
should strive to ensure that they have read each chapter relevant to the topic covered in class
soon after the topic is discussed. Students are also strongly encouraged to attend classes to
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allow active participate in the learning process through class discussions and interaction with
lecturers.

Modes of Assessment
Assessment shall be based on a course work component (CA) carrying 40% of the total
marks. The final examination will account for the remaining 60%.

Reading (and other resources) List

Essential Texts:
- Arens, A.A., R.J. Elder, M.S. Beasley and Hogan, C.E: Auditing and Assurance
Services, Global Edition, 16/E: An Integrated Approach, 17th edition (2020)
- Botswana Government (2004). Accountants Act No 12 of 2010, Government Printer,
Gaborone.
- Botswana Government (2004). Companies Act, 2003 Act No 32 of 2004,
Government Printer, Gaborone
- IAASB (2009) Handbook of International Quality Control, Auditing, Review, Other
Assurance, and Related Services Pronouncements.IFAC https://www.ifac.org › IAASB
HANDBOOK_Vol 1_0
- IESBA (2018) Handbook of the International Code of Ethics for Professional
Accountants. Including International Independence Standards found at
https://www.ifac.org/system/files/publications/files/IESBA-Handbook-Code-of-
Ethics-2018.pdf.

Supplementary Texts:
- Boynton, W. C., & Kell, W. G. (1996). Modern Auditing. New York: Jhon Wiley &
Sons.
- Eilifsen, A, Messier, W, Glover S and Prawitt D: Auditing & Assurance Services:
Second International Edition,The McGraw.Hill Companies, London, 2010
- Gray, I. and Manson, S.: The Audit Process: Principles, Practice and Cases, 3rd
Edition.
Australia et. al.: Thomson Learning, 2005.
- ACCA: Auditing Text/Manual

Welcome to Auditing. This is a course you are going to find interesting and
exciting. It will equip you with analytical and logical skills necessary to evaluate
the relevance and reliability of the systems and processes responsible for recording
and summarizing accounting information. Learning auditing will help you to
understand how to gather and assess evidence so that you can evaluate assertions
(claims) made by others. Whether you wish to practice as auditor, run a small
business, provide consulting services or make executive business decisions, the
tools and techniques learnt in this course will put you in a better position to
achieve that goal.