Week 2: The environment of auditing; Types of audit; Audit professions & liability
Regulation of auditing: Issuers/Reporting Entities
Auditing is a profession.
The auditing profession is regulated largely by the auditing and assurance standards
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Loans and advances
Real and other assets
In order to be a bank you must have a BBB- rating.
Banks earn th
Question 2, FC 2009 Exam
a) Weakness potential for management override without asking questions
b) Authorisation control strength in preventing unauthorized expenses or
misappropriation of assets; weakness in enabling Eric to approve anythi
Free Banking in the financial system was originally used by rich people or families who
provided venture finance (high risk, high return). This was used on smaller scale of
lending for small enterprise and for individuals who were asse
Duration Analysis measures bonds effective maturity. Discounting back cash flows in order to
find actual duration of the bond (when you get what you paid back). This takes into account the
size and timing of cash flows.
Duration Gap DG = DA (
Interbanking was previously done through deferred batch net settlement (at the end of the day add
up all withdraws and borrowings between banks and make transfer) and now real time gross
There are different types of banks based on structure an
Free Banking in the financial system was originally used by rich people or families who provided
venture finance (high risk, high return). This was used on smaller scale of lending for small enterprise
and for individuals who were asset rich but il
Week 4 Accounting 312
Risk: planning, risk analysis, audit strategy and materiality
Client acceptance and continuance
The auditors need to carry out certain steps before accepting a new client or continuing with
a new client:
Obtaining and reviewing avail
Week 6: Substantive testing of transactions and balances: Cash revenue, accounts receivable
Relationship between evidence-gathering procedures
The auditor has to obtain sufficient appropriate evidence to be able to draw reasonable
Week 10: Completing the audit
The nature of completion and review procedures
Almost every audit engagement has a deadline for the auditors report. Many engagement
have a deadline for release of the audited financial report. The date of the
Week 7 Substantive testing of transactions and balances: computer assisted auditing
Using CAAT to aid the undertaking of substantive tests
If client files are voluminous, it is usually efficient to apply a computer-assisted audit
Week 12: Current issues: assurance services, ethics and independence
The current framework for assurance services
An assurance engagement is defined as an engagement in which a practitioner expresses a
conclusion designed to enhance the deg
Week 5 Understanding and assessing internal control
Audit strategy and internal control
According to ISA 315.4, internal control is the process designed and implemented by those
charged with governance, management and other personnel to pro
Accounting 312 Auditing
Week 1: The audit function. Reasons for auditing; Audit expectation gap.
Framework for assurance engagements
In many situations in todays society, people who are responsible for a specific task (called
managers) need to account for
Week 11: The auditors reporting obligations
Obligations to report
ISA 200.11 states that the objective of an audit of a financial report is to obtain reasonable
assurance about whether the financial report taken as a whole is free of materi
Accounting 312 Auditing
Week 3: Audit process, assertions, evidence, procedures and risk.
Accounting and auditing contrasted
Accounting is concerned with measuring and recording data, while auditing is
concerned with obtaining sufficient appropriate evide
Week 8: Substantive testing of transactions and balances: payments, purchases, accounts
payable, inventory and related items.
Purchases and inventories
Inventories consist of goods to be sold, or to be used in production of saleable goods,
Week 9: Audit sampling
Definition and features
Audit sampling is the application of an audit procedure to less than 100 per cent of the items
in a population, to obtain audit evidence about a particular characteristic of the population.
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