Advanced _Auditing _ZH

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ADVANCED AUDITING

ICAP ModuleICAP Module FF

Refresher SessionRefresher Session

December 2009December 2009

Prepar ed by : Zary ab Hyder Prepar ed by : Zary ab Hyder


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SEMINAR OBJECTIVES

How to start advanced audit preparations?

What to study and how?

Practice material.

Key areas of study.

Analysis of June 2009 attempt

Question Answer session.


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STARTING PREPARATIONS (cont .)

If you fail to plan, you are planning to fail

1. Studying this subject in isolation is a blunder.

2. Mock exams specially between 2-5pm will bevery fruitful.

3. Revision is necessary. This subject is verylengthy therefore having synopsis or pass cardscould make all the difference.


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WHAT TO STUDY?

Advanced Audit is the last paper in Mod F. Besidestudying material related to audit, it also requiresknowledge of others papers studied earlier i.e.Corporate Laws and IFRS.

International Standards on Auditing (ISAs)

Audit TRs issued by ICAP.

Members handbook containing CA Ordinance and Bye-Laws.

Selected Opinions by ICAP.

Accounting TRs issued by ICAP.

Relevant requirements of Corporate Laws. Relevant requirements of IFRS.

Circulars relevant to the audit.

Current issues and articles i.e. ACCA or ICAEW.


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KEY AREAS

29 marks10 marks17 marksRequirements of ISRE, ISRS, ISAE,IAPS and reports relating to them.

3

10 marks

51 marks

22 marks

June09

14 marks10 marksReporting requirements for auditsand special audits.

4

32 marks58 marksRequirements of ISAs including

ICAP TRs and Corporate Laws.2

25 marks22 marksEthical requirements includingquality control considerations.

1

June08Win08

Marks asked in past papersKey areas

S.NO


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KEY AREAS cont Ethical considerations including quality control

Important areas of code of ethics:

- Independence (Link with ISQC requirements relevant)- Confidentiality

- Fees and related matters- Professional appointments (This is to be read with ISQC client acceptance)- Ethical conflicts

Major areas of quality control are:- Client acceptance and continuance requirements

- Engagement performance

Study the above topics from:a) Code of ethicsb) ISQC-1 + ISA 220c) CO 1984, CA bye-laws and CCG + ICAP QCR related circulars etc.d) SO and audit TRs relevant to above topics.

Practice them from:a) ICAP past papersb) ACCA P7 questions are relevant herec) ICAEW part A questionsd) Ethical lapses in Satyam or Enron scandals etc.


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KEY AREAS cont

ISRE, ISRS, ISAE, IAPS and reports relating to them

These are specific standards and question can be set considering any oneof them. Not knowing a particular standard can cause a wholequestion loss in the exam.

The important thing relating to them is to understand the scope of thequestion. Example would be a particular scenario requiringprocedures and subsequently report. Students need to understandthe scope i.e. whether assurance is needed or not and if yes whatlevel. This would make all the difference in losing or getting marks.

ACCA or ICAEW questions are not relevant and should not be consideredfor this portion unless specifically having matching requirements.

IAPS are now part of ICAP syllabus. However students need not to makesynopsis of IAPS. Knowing the core requirements will be enoughexcept IAPS relating to small companies and compliance with IFRS,which have very few requirements. Example would be in case ofIAPS relating to bank audits, knowledge of risks relevant to banksor specific procedures will ensure passing marks in the exam.


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KEY AREAS cont Reporting

Reporting can be asked in three manners:

1. One requires reports to be drafted.

2. Others which requires students opinion on specific matters and itsimpact on the audit report.

3. Reporting to management. (Management letter etc).

Reports can be asked from ISA 700 to 720 and ISA 800. Reports relating

to ISRE, ISRS and ISAE have already been covered. Otherreporting responsibilities are mentioned in Corporate Laws, whichmay not may not be asked. Example would be auditor certificateson free reserves or dividend remittance. Knowledge acquired inMod E Corporate Laws plays a significant role.

Students should be good at drafting. Watch your grammar, punctuation,handwriting and spelling.


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Analysis of June2009 attempt

Answer from ISQC and code of ethics independence & ICAPOrdinance.

Area 1Average

12 marks

8

This requires knowledge of accounting TR & scope of thereport. It is very imp as students can answer it from ISAEor ISRS.

Area 2 and 3Average

15 marks

5

Easy to obtain as simple things relating to confidentialitywritten in code of ethics.

Area 1Easy

10 marks

6

Simple marks from compilation. Reproduce report fromISRS 4410.

Area 3Easy

7 marks

7

It requires knowledge of CO 1984 provisions and auditexperience to prepare AP considering all assertions.

Area 2Difficult

12 marks

9

Easy marks. ISA 315 provides guidance, however can notbe answered specifically. Knowledge of RPTs are also

important.

Area 2Easy

9 marks

4

Warrant is an accounting estimate, covered under ISA 540,therefore ISA 540 matters should be considered. Furtherpractical exposure would be vital.

Area 2Difficult

15 marks

3

Answer from ISA 570. Specific requirements given.

Reproduce the adverse opinion from ISA 570.

Area 2 and 4Average

10 marks

2

Consider materiality & relevant IAS. Further accounting TRis asked. Based on materiality & treatment justify impact orreport. Practical exposure plays vital role.

Area 2 and 4Average

10 marks

1

How to answerKey areasLevel ofdifficulty

Question#


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Question Answer session

Questions are appreciated !!!

Thank you and best of luck for your exams.

Documents

Advanced _Auditing _ZH