AUE3761/102/0/2020
Tutorial Letter 102/0/2020
The audit process
AUE3761
Year module
Department of Auditing
This tutorial letter contains important information
Hi
about your module.
BARCODE
, CONTENTS
Page
1 INTRODUCTION ........................................................................................................................ 3
2 IMPORTANT INFORMATION REGARDING THIS TUTORIAL LETTER ................................... 3
2.1 DUE DATE ................................................................................................................................... 3
2.2 LECTURERS AND CONTACT DETAILS ...................................................................................... 3
2.3 METHOD OF STUDY FOR THIS TUTORIAL LETTER ................................................................. 4
2.4 STUDY PROGRAMME ................................................................................................................. 4
3 ACADEMIC CONTENT TO STUDY FOR THIS MODULE .......................................................... 4
LESSON 1: INTRODUCTION TO THE AUDIT PROCESS ...................................................................... 5
LESSON 1.1: Auditing concepts ............................................................................................................... 7
LESSON 2: THE PRELIMINARY AUDIT ENGAGEMENT ..................................................................... 10
LESSON 2.1: The preliminary audit engagement stage ......................................................................... 11
LESSON 3: PLANNING AN AUDIT ....................................................................................................... 19
LESSON 3.1: Planning an audit of financial statements ........................................................................ 21
LESSON 3.2: Understanding the entity and its environment ................................................................... 24
LESSON 3.3: Identifying and assessing risk ........................................................................................... 27
LESSON 3.4: The auditor’s responsibilities relating to fraud ................................................................... 45
LESSON 3.5: Consideration of laws and regulations in an audit of financial statements......................... 52
LESSON 3.6: Materiality ......................................................................................................................... 58
LESSON 3.7: The auditor’s responses to risk ........................................................................................ 69
LESSON 3.8: The overall audit strategy ................................................................................................. 77
LESSON 3.9: The audit plan .................................................................................................................. 82
LESSON 3.10: Audit documentation....................................................................................................... 87
4 SELF-ASSESSMENT QUESTIONS ......................................................................................... 92
5 SELF-ASSESSMENT SOLUTIONS ....................................................................................... 103
2
, AUE3761/102/0/2020
1 INTRODUCTION
It is with great pleasure that I present to you the first lessons that you need to study for module
AUE3761: The audit process, in this tutorial letter. We already provided you with tutorial letter
101, which contains important information regarding administrative arrangements, support
services, contact details, your prescribed textbooks, and so on. Make sure that you carefully read
through Tutorial Letter 101 and that you keep it at hand throughout your studies.
2 IMPORTANT INFORMATION REGARDING THIS TUTORIAL LETTER
2.1 DUE DATE
The due date of this tutorial letter is on: 1 April 2020
This implies that you need study the content of all of the lessons provided to you in this tutorial
letter (section 3), do the questions (section 4), assess your answers to the questions (section 5)
and finally submit your assignment on or before the due date. Note that the assignment will be
made available to you at least a month before the due date on myUnisa.
2.2 LECTURERS AND CONTACT DETAILS
The lecturers responsible for this module, and to whom you should direct your enquiries, are:
Lecturer Telephone number
This tutorial letter:
Mrs A Botha 012 429 6147
Mr W Molefe 012 429 6489
Other tutorial letters:
Mrs S Abed 012 429 4544
Mr T Diale 012 429 8497
Mrs S Malan 012 429 4846
If you would like to send an e-mail with your query about the content of this tutorial letter you
may send an e-mail to: .
All the lecturers on this module have access to this mailbox and will gladly assist you with
your query. However, please note that if your query is of an administrative nature, lecturers
would not be able to assist you and therefore you have to direct your e-mail to the relevant
e-mail address as provided to you in Tutorial Letter 101 and the Study @ Unisa guide.
PLEASE NOTE: Personal appointments should be arranged beforehand. Come prepared
and ensure that you have worked through your study guide when visiting us.
Always have your student number ready when you contact your lecturers!!!
3
, 2.3 METHOD OF STUDY FOR THIS TUTORIAL LETTER
You should start off your studies by referring to the lessons in section 3 of this tutorial letter. Read
through the lessons, make sure that you understand the learning outcomes, study the relevant
sources provided and do the activities. You should also refer to myUnisa for additional activities,
videos or important announcements. After studying each of the lessons, consider whether you
are able to achieve the learning outcomes of each of the lessons before continuing.
After completion of the lessons, you should attempt the self-assessment questions provided in
section 4 of this tutorial letter. You should then mark your answers by referring to the self-
assessment solutions in section 5 of this tutorial letter to make sure that you have mastered the
concepts studied in this tutorial letter.
After you have studied the academic content this tutorial letter, make sure that you complete the
compulsory assignment that will be made available to you at least a month before the due
date on myUnisa and submit it on or before the due date.
If you require any assistance throughout your studies or do not understand the concepts or
struggle when applying these concepts to a practical scenario, you are welcome to contact your
lecturers. An e-tutor will also be allocated to you to whom you may address any questions that
you may have regarding the academic content of this module.
2.4 STUDY PROGRAMME
You are responsible for pacing yourself when studying this tutorial letter according to your own
personal circumstances. The following study programme is an example of how you could plan
your studies:
Lesson to study Time frame
Lessons 1 and 1.1 Week 1
Lessons 2 and 2.1 Week 2
Lessons 3, 3.1 and 3.2 Week 3
Lessons 3.3, 3.4 and 3.5 Week 4
Lessons 3.6 and 3.7 Week 5
Lessons 3.8, 3.9 and 3.10 Week 6
Do or revise self-assessment questions Week 7
Revision and work on the assignment Remainder of the time before the due date of
the assignment
Submit the assignment On or before 1 April 2020
3 ACADEMIC CONTENT TO STUDY FOR THIS MODULE
The content that you need to study for this tutorial letter is set out in the lessons 1 to 3.
4
Tutorial Letter 102/0/2020
The audit process
AUE3761
Year module
Department of Auditing
This tutorial letter contains important information
Hi
about your module.
BARCODE
, CONTENTS
Page
1 INTRODUCTION ........................................................................................................................ 3
2 IMPORTANT INFORMATION REGARDING THIS TUTORIAL LETTER ................................... 3
2.1 DUE DATE ................................................................................................................................... 3
2.2 LECTURERS AND CONTACT DETAILS ...................................................................................... 3
2.3 METHOD OF STUDY FOR THIS TUTORIAL LETTER ................................................................. 4
2.4 STUDY PROGRAMME ................................................................................................................. 4
3 ACADEMIC CONTENT TO STUDY FOR THIS MODULE .......................................................... 4
LESSON 1: INTRODUCTION TO THE AUDIT PROCESS ...................................................................... 5
LESSON 1.1: Auditing concepts ............................................................................................................... 7
LESSON 2: THE PRELIMINARY AUDIT ENGAGEMENT ..................................................................... 10
LESSON 2.1: The preliminary audit engagement stage ......................................................................... 11
LESSON 3: PLANNING AN AUDIT ....................................................................................................... 19
LESSON 3.1: Planning an audit of financial statements ........................................................................ 21
LESSON 3.2: Understanding the entity and its environment ................................................................... 24
LESSON 3.3: Identifying and assessing risk ........................................................................................... 27
LESSON 3.4: The auditor’s responsibilities relating to fraud ................................................................... 45
LESSON 3.5: Consideration of laws and regulations in an audit of financial statements......................... 52
LESSON 3.6: Materiality ......................................................................................................................... 58
LESSON 3.7: The auditor’s responses to risk ........................................................................................ 69
LESSON 3.8: The overall audit strategy ................................................................................................. 77
LESSON 3.9: The audit plan .................................................................................................................. 82
LESSON 3.10: Audit documentation....................................................................................................... 87
4 SELF-ASSESSMENT QUESTIONS ......................................................................................... 92
5 SELF-ASSESSMENT SOLUTIONS ....................................................................................... 103
2
, AUE3761/102/0/2020
1 INTRODUCTION
It is with great pleasure that I present to you the first lessons that you need to study for module
AUE3761: The audit process, in this tutorial letter. We already provided you with tutorial letter
101, which contains important information regarding administrative arrangements, support
services, contact details, your prescribed textbooks, and so on. Make sure that you carefully read
through Tutorial Letter 101 and that you keep it at hand throughout your studies.
2 IMPORTANT INFORMATION REGARDING THIS TUTORIAL LETTER
2.1 DUE DATE
The due date of this tutorial letter is on: 1 April 2020
This implies that you need study the content of all of the lessons provided to you in this tutorial
letter (section 3), do the questions (section 4), assess your answers to the questions (section 5)
and finally submit your assignment on or before the due date. Note that the assignment will be
made available to you at least a month before the due date on myUnisa.
2.2 LECTURERS AND CONTACT DETAILS
The lecturers responsible for this module, and to whom you should direct your enquiries, are:
Lecturer Telephone number
This tutorial letter:
Mrs A Botha 012 429 6147
Mr W Molefe 012 429 6489
Other tutorial letters:
Mrs S Abed 012 429 4544
Mr T Diale 012 429 8497
Mrs S Malan 012 429 4846
If you would like to send an e-mail with your query about the content of this tutorial letter you
may send an e-mail to: .
All the lecturers on this module have access to this mailbox and will gladly assist you with
your query. However, please note that if your query is of an administrative nature, lecturers
would not be able to assist you and therefore you have to direct your e-mail to the relevant
e-mail address as provided to you in Tutorial Letter 101 and the Study @ Unisa guide.
PLEASE NOTE: Personal appointments should be arranged beforehand. Come prepared
and ensure that you have worked through your study guide when visiting us.
Always have your student number ready when you contact your lecturers!!!
3
, 2.3 METHOD OF STUDY FOR THIS TUTORIAL LETTER
You should start off your studies by referring to the lessons in section 3 of this tutorial letter. Read
through the lessons, make sure that you understand the learning outcomes, study the relevant
sources provided and do the activities. You should also refer to myUnisa for additional activities,
videos or important announcements. After studying each of the lessons, consider whether you
are able to achieve the learning outcomes of each of the lessons before continuing.
After completion of the lessons, you should attempt the self-assessment questions provided in
section 4 of this tutorial letter. You should then mark your answers by referring to the self-
assessment solutions in section 5 of this tutorial letter to make sure that you have mastered the
concepts studied in this tutorial letter.
After you have studied the academic content this tutorial letter, make sure that you complete the
compulsory assignment that will be made available to you at least a month before the due
date on myUnisa and submit it on or before the due date.
If you require any assistance throughout your studies or do not understand the concepts or
struggle when applying these concepts to a practical scenario, you are welcome to contact your
lecturers. An e-tutor will also be allocated to you to whom you may address any questions that
you may have regarding the academic content of this module.
2.4 STUDY PROGRAMME
You are responsible for pacing yourself when studying this tutorial letter according to your own
personal circumstances. The following study programme is an example of how you could plan
your studies:
Lesson to study Time frame
Lessons 1 and 1.1 Week 1
Lessons 2 and 2.1 Week 2
Lessons 3, 3.1 and 3.2 Week 3
Lessons 3.3, 3.4 and 3.5 Week 4
Lessons 3.6 and 3.7 Week 5
Lessons 3.8, 3.9 and 3.10 Week 6
Do or revise self-assessment questions Week 7
Revision and work on the assignment Remainder of the time before the due date of
the assignment
Submit the assignment On or before 1 April 2020
3 ACADEMIC CONTENT TO STUDY FOR THIS MODULE
The content that you need to study for this tutorial letter is set out in the lessons 1 to 3.
4
