University of South Africa AUDIT PLANNING AND TESTS OF CONTROL AUE3701 Semesters 1 & 2

AUE3701/001/4/2017




MO001/4/2017

AUDIT PLANNING AND
TESTS OF CONTROL

AUE3701

Semesters 1 & 2


Department of Auditing


IMPORTANT INFORMATION

This document contains important
information about your module.

, CONTENTS
Page


TOPIC 1: INTRODUCTION .................................................................................................................... 3


TOPIC 2: THE PRELIMINARY AUDIT ENGAGEMENT ......................................................................... 9


TOPIC 3: PLANNING AN AUDIT ......................................................................................................... 17


TOPIC 4: OBTAINING AUDIT EVIDENCE ........................................................................................... 94


TOPIC 5: INTERNAL CONTROL CONCEPTS .................................................................................. 116


TOPIC 6: TESTS OF CONTROLS IN CYCLES ................................................................................. 141


ATTACHMENT 1 ................................................................................................................................. 180


ATTACHMENT 2 ................................................................................................................................. 184




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, AUE3701/MO001


TOPIC 1: Introduction
1 Welcome
Dear Student

It is with great pleasure that we welcome you to Module AUE3701: Audit planning and tests
of controls. The preface outlines the links to other auditing modules, our teaching strategy
and useful hints that will help you to have a more positive learning experience.

We wish to congratulate you on successfully completing your AUE200 studies. We
simultaneously want to warn you that studying auditing at third-year level is more intense:
this is because we want to enhance your knowledge level to enable you to integrate various
aspects of auditing in scenario-based questions and in auditing practice.

2 Purpose of the module
This module is intended for trainee accountants and auditors or such individuals in related
fields, for example people who are interested in qualifying as chartered accountants or
registered auditors, to enable them to develop the necessary basic competencies. The
purpose of this module is to provide you with knowledge and skills in auditing theory and
practice, including basic auditing concepts, statutory requirements, guidelines and auditing
standards.

3 Link to other modules
The content in this module advances the content of the various auditing modules that you
have already passed to a higher academic level. The learning outcomes are therefore
aimed at further developing your expertise and abilities in the field of auditing.

A brief outline of the Auditing 200, 300 and 400 modules offered by the Department of
Auditing is provided below:

Auditing 200

AUE2601: Auditing theory and practice
Students credited with this module will know the basic auditing concepts, will be able to
apply their knowledge of the role, duties and responsibilities of a registered auditor and
apply the International Standards on Auditing in the statutory audit of an ordinary company
trading in goods and services.


AUE2602: Corporate governance and the auditor
The purpose of this module is to provide learners with knowledge and skills in the principles
of corporate governance, statutory matters and internal controls in the accounting cycles
from the auditor’s perspective, including evaluating internal controls.




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, Auditing 300

AUE3701: Audit planning and tests of controls
The purpose of this module is to provide learners with knowledge and skills in audit planning
and the performance of tests of controls, which include auditing concepts, statutory
requirements, guidelines and international standards on auditing.
AUE3702: Substantive procedures and finalising the audit
The purpose of this module is to provide learners with knowledge and skills in the
performance of substantive procedures and the finalisation of an audit, which includes
auditing concepts, statutory requirements, guidelines and international standards on
auditing.

Auditing 400

AUE4861: Advanced auditing
The aim is to ensure that students obtain 70% of the auditing knowledge requirements of
the South African Institute of Chartered Accountants (SAICA) prescribed syllabus, in order
to produce competent professional accountants. AUE4861 also provides a foundation of
auditing knowledge that will enable students to continue to learn and adapt to change
throughout their professional lives. In particular, the module aims to develop core
competence (the acquisition of auditing knowledge and skills) in the field of auditing.

AUE4862: Applied auditing
The aim is to ensure that students obtain the other 30% of the auditing knowledge
requirements of the SAICA prescribed syllabus in order to produce competent professional
accountants. It will also provide a foundation of auditing knowledge that will enable students
to continue to learn and adapt to change throughout their professional lives. In particular,
the module aims not only to develop core competence in the field of auditing, but also to
integrate the knowledge obtained in Modules AUE4861 and AUE4862. Both of these
modules will enable a student to adhere to the SAICA requirements for auditing.

4 Framework of Module AUE3701

The topics in the two third-year modules, namely AUE3701 and AUE3702, have been
arranged to follow the logical flow of the audit process.

The following is a schematic representation of the content of the second- and third-year
modules.




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