University of Technology

School of Business Administration

2003 - 2004         


COURSE TITLE:   External Auditing

(Pre-requisite: Introduction to Auditing)

WEB SITE:      

GROUP:                    BBAA4

DURATION:              Semester 2

INSTRUCTORS  Rohan Chambers
C/o School of Business, Ext.2141. 
Personal web site:
Office hours :    Tuesdays 3 - 5 pm
  Roger Brown
  C/o School of Business, Ext 2309
  Office hours: To be announced


Marlon Cooper 
C/o Symptai Consulting Limited, 56 Half Way Tree Road



External Auditing is a capstone course in an undergraduate education for an accounting career. The course draws upon some of the theoretical concepts and principles previously learnt in Introduction to Auditing, Information Technology and various financial accounting courses and applies them to the practice of External (Financial Statements) Auditing. The course is includes a lab component where students will be introduced to Audit Command Language (ACL), a popular auditing software tool. External Auditing should be taken by students who wish to become a Chartered/Certified Accountant. 


The course is primarily intended to provide students with the necessary skills to satisfy the entry-level requirements for employment in an accounting (auditing) firm or department. It is important to note that the course is not designed to make one an expert auditor. As will be seen, this is something that can come only with extensive experience. 

The course will not, by itself, completely prepare students for taking auditing sections of professional examinations, namely, Paper 2.6 - Audit and Internal Review and Paper 3.1 – Audit and Assurance Services in the ACCA examinations and Auditing in the CPA examinations. However, as a secondary objective. it is intended to provide students with a solid foundation so that with additional self-study (or by attending review classes) they can pass such sections of the examinations.


  1. COURSE CONTENT AND SCHEDULE - (The content and schedule for the ACL component will be provided by the ACL Instructor)


Topics - (the relevant chapter from the text is in the curved brackets) - [ the week in which the lecture will be covered is in the square brackets]

Click on the bold type headings to get access to the power point lecture slides

Tutorial [the week in which the tutorial will be covered is in the square brackets]

Note - These questions are found at the end of the corresponding chapter

 Supplemental Articles/Web Sites

Click 'Articles' below for complete list of Auditing Articles



Engagement Acceptance (3) [Wk.1]

Specific Objectives:

  • Identify the procedures that the auditor should follow before accepting a new client
  • Explain the need for communication with the predecessor auditor and the procedures involved
  • Explain the purpose of 'client screening' and what factors constitute a high or low risk client
  • Explain the use of an engagement letter and identify its key elements
  • Appreciate the issues involved in a change in the Engagement




Questions [Wk.2]




Planning & Control  (4) - (5) [Wk.2]

Specific Objectives:

  • Indicate what factors an auditor should consider when obtaining knowledge about a potential client.
  • Identify the financial statement assertions and the role they play in the audit process.
  • Appreciate the significance of the accounting system and the related internal controls when planning an audit.
  • Distinguish between errors and irregularities and explain the auditor's responsibility to detect each.
  • Explain the need to contact the predecessor auditor after acceptance of the new client.
  • Apply analytical procedures are used in planning the stage.
  • Describe the assistance that internal auditors may provide on a audit.
  • Appreciate the issues which arise when a client utilizes a service organization.
  • Describe the purpose of an audit program.
  • Describe the purpose and content of an audit planning memorandum.
  • Explain the quality control procedures that are implemented at the firm level and the individual audit level.



Questions [Wk.3]

Chapter 4

1-2,8, 11-18, 20-23 

Chapter 5

10, 12-13


3 Substantive Testing (8) - [Wk.3-6]

Specific Objectives:

  • Appreciate the nature of substantive testing.
  • Distinguish between the different types of substantive testing.
  • Appreciate the unique features of key financial statement components and their effect upon the audit process e.g. sales, purchases, cash, debtors, inventory etc.
  • Prepare substantive audit programs and conduct substantive tests
Questions [Wk.4-7]

1-4, 37

5-13, 14-21, 22-28

29-31, 38

32-36, 39






Completing the Audit (11) - [Wk.7]

Specific Objectives:

  • Appreciate the role that the 'representation letter' plays in the evidence accumulation process and describe some of its main contents.

  • Describe the main procedures that the auditor is required to conduct in relation to subsequent events, contingencies, related party transactions, going concern, and overall analytical review issues.

  • Describe the "House-keeping" procedures that are involved when completing the audit.


Questions [Wk.8]





Reporting (12) - [Wk.8-9]

Specific Objectives:

Questions [Wk.9-10]

1-15, 22-24




6 Contemporary issues (13) - [Wk.10]

Specific Objectives:

Appreciate the issues surrounding:

  • The requirements of the profession in this changing environment
  • New Assurance services
  • The audit of a small company
  • Legal liability of auditors


Questions [Wk.11]

Question 3 plus others which will be distributed in class




There will be two 2-hour sessions per week. One of the sessions will be for a combined lecture and tutorial. The first hour will be the tutorial where students will present their solutions to assigned questions. The second hour is for lectures where topics will be introduced and discussed. To assimilate the material more readily and in turn enhance better quality discussions, students must read the relevant units and attempt the assigned tutorial questions prior to each session. The instructor will assume that this has been done.

The second 2-hour session will be in held in computer labs and will focus on the use of Audit Command Language (ACL). Trainers from Symptai Consulting Limited, local agents for ACL, will demonstrate the basics of this software package.




Type Date/Due Date Topics Length Format Weight (%)
Coursework #1 Week# 4  1-2 1 ¼  hours In class test - 60 mcqs  10
Coursework #2 Week# 10 3 n/a Group take home assignment  15
Coursework #3 Week#12 ACL n/a Group take home assignment 15
Final Exam To be Announced 1-6  2 hours TBA 60




TBA - To be announced                          

Further details on all the above assessments will be provided throughout the semester and all are subject to change.




a)      Required  :  Auditing – The International Way - by Rohan Chambers, 1st Edition, ISBN 976-8172-19-3

b)      Additional References

-         Auditing by Guy, Alderman & Winters, Dryden Press, Latest Edition.

-         Audit & Internal Review - Paper 6 by ACCA (Latest Edition).

-         Auditing - An Integrated Approach by Arens & Loebbecke, Latest Edition.

-     Auditing Today by Emile Wolfe, Prentice Hall, Latest Edition.

    c) The course web page: serves as a repository of     materials for the course. You may also access this web page by doing the following: Go to , select Courses from the left and then select External Auditing.

    d) The following web page's articles and related links bottom frame.htm has a number of auditing articles, some of which are already bolted to corresponding topics above.



Last updated: Saturday, February 14, 2004