Paper 2.6 - Audit and Internal Review (International)
 

Aim

To develop knowledge and understanding of the audit process and its application for both external regulation and for business control and development for a range of organisations.

Objectives

On completion of this paper candidates should be able to:

  • understand the nature, purpose and scope of auditing and internal review, the role of external audit and its regulatory framework and the role of internal audit in providing assurance of the risk management and control framework of the organisation
  • identify risks and plan work to meet the objectives of the audit or review assignment
  • Identify and describe the work that will be required and its method of execution in order to draw appropriate conclusions
  • evaluate the outcome of an assignment and prepare appropriate reports for users both internal and external to the organisation including making recommendations to enhance business performance and
  • demonstrate the skills expected in Part 2.

Content

Audit framework nature of a statutory audit, responsibility for fraud and error, consideration of law in an external audit, codes of conduct, fundamental principles.

Internal audit and review role of internal audit and its relation to corporate governance, internal audit, risk management and organisational control, internal audit and achieving corporate objectives.

Planning and risk defining objectives for audit and review assignments, risk assessment, materiality, accounting and internal control systems, control evaluation, audit plans, identifying opportunities to add value to the business, administration and control.

Performance of audits and reviews financial statement assertions, procedures for obtaining audit evidence including balance and transaction testing, analytical procedures, CAATs and management representations, sampling techniques.

Reporting communications to management, format of reports (statutory and non-statutory), audit opinions, reporting on assignment objectives.

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