University of Technology

School of Business Administration

2004 - 2005



Course Code:         ACC 4115

WEB SITE:      

GROUP:                    BBAA4

DURATION:              Semester 1

LECTURER & TUTOR:     Roger Brown
C/o School of Business, Ext.2309 



This course introduces students to fundamental auditing concepts, principles and procedures. It addresses issues concerning regulations, audit risk, materiality, characteristics of evidence, internal control, sampling, analytical procedures, computerized audit tools, fraud, forensic accounting and auditing theory.  


Students will acquire the necessary skills in general audit principles and procedures with a slight bias towards financial statements audits. Additionally, the coverage of internal control will provide students with a general framework which is applicable in the establishment of any properly structured business. The course will lay the foundation, and as a result it is the prerequisite, for both External Auditing and Internal Auditing.



Topics - (the relevant chapter from the text is in the curved 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



Introduction (1)  

Specific Objectives:

  • Define and explain 'Auditing'
  • Describe the various types of audits and assurance services
  • Distinguish between the different types of auditors and the services they perform
  • Understand the need for an audit
  • Explain the 'Expectation gap'
  • Distinguish between auditing and accounting
  • Describe the audit process

1 - 10



Regulatory Framework (2)

Specific Objectives:

  • Recognize what constitutes 'proper' books of accounts and why the auditor should be concerned about such books
  • State the financial statements required to be laid before a general meeting
  • Describe the procedure with respect to completion of the accounts
  • State the exceptions to the general rule that 'members of a company shall appoint the auditors'
  • Explain who the determines the remuneration of the auditors
  • State who can and who cannot be an auditor
  • Summarize the duties and rights of an auditor
  • Explain the role of auditing and accounting standards in the audit process
  • Describe the ethical concerns of the accounting profession

 1 - 20




3 Fundamentals of Auditing (4 & 5)

Specific Objectives:

  • Define audit risk and explain the relationship among its components
  • Explain how the auditor uses the audit risk model to control it
  • Explain how an auditor determines materiality and how it is used in the audit process 
  • Identify financial statement assertions
  • Know what constitutes sufficient and reliable evidence
  • Appreciate the different types of evidence
  • Describe what constitutes proper working papers
  • Distinguish between indexing and cross referencing
  • Distinguish between a permanent file and a current file

Chapter 4

3 -7, 9 -10, 19 

Chapter 5

1 - 9, 11


Internal Control (6)

Specific Objectives:

  • Explain the importance of Internal Control

  • Define Internal Control

  • Identify and distinguish between the different components of Internal Control

  • Explain the significance of some key concepts of Internal control, specifically: Management's Responsibility, Reasonable Assurance, Inherent Limitations

  • Document the Internal Control structure of a company

  • Conduct tests of Internal Controls and evaluations thereof

  • Prepare a basic Management Letter



1-5, 33, 34, 35

6 - 13, 31 -32, 36 - 39

14 - 23

24 -30



Sampling (7 & 9)

Specific Objectives:

  • Define 'audit sampling'

  • Distinguish between the different sampling selection methods

  • Distinguish between attributes sampling and variables sampling

  • Distinguish between the two types of sampling risk as they relate to Internal Control and their impact on the audit

  • Explain the impact that certain factors have upon the design of a sample for testing Internal Control.

  • Apply sampling techniques during tests of controls and evaluations thereof

  • Distinguish between the two types of sampling risk as they relate to substantive testing and their impact upon the audit.

  • Explain the impact that certain factors have upon the design of a sample for substantive testing.

  • Distinguish between the characteristics of Probability-Proportional-to-Size (PPS) /Monetary Unit Sampling (MUS) and Classical Variables Sampling Techniques

  • Apply the following variations of Classical Variables Sampling Techniques in determining the estimated audited population value: mean-per-unit, difference and ratio estimation.



Chapter 7

1 - 28

Chapter 9

1 - 16

6 Analytical Procedures (4)

Specific Objectives:

  • Define analytical procedures
  • Describe the different types of analytical procedures
  • Describe the role and significance of analytical procedures in the planning, fieldwork and final review stages of an audit.



To be distributed in class or click here



Auditing with Technology (10)

Specific Objectives:

  • Appreciate the efficiency brought about by utilizing computerized audit tools.
  • Apply the principle of Brenford's Law in detecting anomalies in data sets (Digital Analysis)
  • Appreciate the issues which surround e-commerce and web-based Accounting Information Systems and how they affect the auditor.

1 - 6


8 Miscellaneous Topics (13)

Specific Objectives: 

Appreciate the issues surrounding:

  • Fraud
  • Forensic auditing/accounting
  • Auditing theory










Lectures will be the forum for the introduction and general discussion of each topical area. To assimilate the material more readily and in turn enhance better quality discussions students must read the relevant units prior to attending the lecture at which it will be discussed. The instructor will assume that this has been done.

Tutorials will be the forum for students to cement the material covered in the lectures. Such tutorials will consist of multiple choice questions, essays, case discussions and class presentations. Students must attempt the assigned tutorial questions prior to attending the corresponding tutorial. Again, the instructor will assume that this has been done




Type Date/Due Date Topics Length Format Weight (%)
Coursework TBA TBA TBA TBA 40
Final Exam TBA TBA TBA TBA 60




TBA - To be announced                          

+     -  This assignment will be computer-based and each group will consist of 3-4 students.

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 ISBN  976-8172-19-3. (Relevant Chapters to be provided in class)

b)      Recommended   - 2003 Handbook of Auditing, Assurance, and Ethics Pronouncements by International Federation of Accountants (IFAC). This is available free of charge at

c)      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.

  1. 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 Introduction to Auditing.
  2. 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: Wednesday, September 01, 2004