Audit Fundamentals Level 1 Module 1 Nov-Dec 2021

Course Overview:

 This module provides a background of the managerial organization of the entities; the standards, role of the internal audit function within an organization; the auditor’s role in critical thinking;   standards and guidelines that govern the audit profession; and outlines the criteria by which auditors and their audit departments should be evaluated and measured; describes fraud and red flags of fraud.   The Unit further explains risk-based auditing; defines the stages of the audit process; provides guidance to auditors in planning an audit engagement, understanding an organisation's objectives and related business processes/systems; provides instruction in the execution of risk assessment to aid in the development of audit steps/programmes. 

General Objectives

 

  • Gain a general understanding of the meaning of Corporate Governance
  • Gain an appreciation of the role of internal audit function and its reporting relationships and legislation governing this relationship
  • Distinguish between the role of internal and external audit
  • Gain an overall understanding of the professional practices and Standards developed by the Institute of Internal Auditors (IIA)
  • Understand and apply those tools necessary for Planning the Audit Assignment
  • Be able to scope the audit based on his/her understanding of the business environment of an organization
  • Gain an appreciation of red flags/symptoms of Fraud

 

Specific Objectives: On completion of the module, participants should be able to:

 

Knowledge

·         Define Corporate Governance

·         Distinguish between Internal and External Audit using both government and nongovernment 

          standards and expectations

·         Outline the Internal Audit Function based on IIA Standard 1000

·         Outline the rationale for the establishment and maintenance of standards

·         Outline the basis for evaluating Internal Audit performance

·         Identify the local and international regulatory bodies for Auditing

·         Explain the Code of Ethics according to IIA and INTOSAI

·         Outline the major tenets of the INTOSAI Auditing Standards

·         Explain the Risk-Based Approach to Planning the Audit Assignment

Performance

·         Apply national and international standards to the conduct of internal and external audits

·         Act in accordance with the established tenets and standards of Internal Audit Charter

·         Promote the entrenchment of an ethical culture in internal and external auditing

·         Consistently apply the major tenets of the INTOSAI Auditing Standards

·         Plan the Audit Assignment based on IIA Standard 2200

·         Apply critical thinking skills to the conduct of auditing

·         Take steps to promote fraud prevention, detection, investigation and reporting

 Attitude

·         Appreciate the importance of adhering to the regulations and guidelines governing 

          internal and external auditing procedures within government

·         Appreciate the significance of adhering to established Auditing standards

·         Appreciate the importance of establishing and maintaining a culture of ethics and 

          professionalism in Auditing

·         Appreciate the significance of planning in the effective execution of the Internal Audit


Module 1: Corporate Governance and Audit Engagement Standards

Course Overview:

 This module provides a background of the managerial organization of the entities; the standards, role of the internal audit function within an organization; the auditor’s role in critical thinking;   standards and guidelines that govern the audit profession; and outlines the criteria by which auditors and their audit departments should be evaluated and measured; describes fraud and red flags of fraud.   The Unit further explains risk-based auditing; defines the stages of the audit process; provides guidance to auditors in planning an audit engagement, understanding an organisation's objectives and related business processes/systems; provides instruction in the execution of risk assessment to aid in the development of audit steps/programmes. 

General Objectives

 

  • Gain a general understanding of the meaning of Corporate Governance
  • Gain an appreciation of the role of internal audit function and its reporting relationships and legislation governing this relationship
  • Distinguish between the role of internal and external audit
  • Gain an overall understanding of the professional practices and Standards developed by the Institute of Internal Auditors (IIA)
  • Understand and apply those tools necessary for Planning the Audit Assignment
  • Be able to scope the audit based on his/her understanding of the business environment of an organization
  • Gain an appreciation of red flags/symptoms of Fraud

 

Specific Objectives: On completion of the module, participants should be able to:

 

Knowledge

·         Define Corporate Governance

·         Distinguish between Internal and External Audit using both government and nongovernment 

          standards and expectations

·         Outline the Internal Audit Function based on IIA Standard 1000

·         Outline the rationale for the establishment and maintenance of standards

·         Outline the basis for evaluating Internal Audit performance

·         Identify the local and international regulatory bodies for Auditing

·         Explain the Code of Ethics according to IIA and INTOSAI

·         Outline the major tenets of the INTOSAI Auditing Standards

·         Explain the Risk-Based Approach to Planning the Audit Assignment

Performance

·         Apply national and international standards to the conduct of internal and external audits

·         Act in accordance with the established tenets and standards of Internal Audit Charter

·         Promote the entrenchment of an ethical culture in internal and external auditing

·         Consistently apply the major tenets of the INTOSAI Auditing Standards

·         Plan the Audit Assignment based on IIA Standard 2200

·         Apply critical thinking skills to the conduct of auditing

·         Take steps to promote fraud prevention, detection, investigation and reporting

 Attitude

·         Appreciate the importance of adhering to the regulations and guidelines governing 

          internal and external auditing procedures within government

·         Appreciate the significance of adhering to established Auditing standards

·         Appreciate the importance of establishing and maintaining a culture of ethics and 

          professionalism in Auditing

·         Appreciate the significance of planning in the effective execution of the Internal Audit


Module 2: Fieldwork and Audit Reporting Process

Course Overview:

 The module explains the fieldwork process to the participant, examining the standards governing audit fieldwork, gathering of information, good work paper practices (including cross-referencing), development of audit findings and how that intersects with the audit report writing process.

 

General Objectives

 ·      Obtain an overall understanding of the standards governing audit fieldwork.

·      Gain a general understanding of the principles governing the gathering of information  

       necessary  to assess the adequacy and effectiveness of controls, risk management and 

       governance processes.

·      Gain a preliminary understanding of the tools and techniques used in this phase of an audit.

·      Achieve proficiency in work paper preparation and cross-referencing.

·      Understand how the results of the fieldwork feed into the drafting of the audit report.

·      Understand report structure principles

Specific Objectives:  On completion of this module, the participants should be able to:

 Knowledge

·         Outline the elements of Audit Fieldwork

·         Examine the governing standards in audit fieldwork

·         Discuss good working paper practices (including cross-referencing)

·         Explain the five attributes in the development of audit observations

·         Explain how the development of audit findings intersects with the audit report writing process

·         Explain the value of good written communication and excellent writing skills to the audit 

          function

·         Identify common grammar, punctuation and sentence construction errors and other common 

          writing problems

·         Explain the importance of selecting the appropriate language, tone and style in reports

Performance

·         Exercise all the elements of Audit Fieldwork in the execution of the whole auditing process

·         Comply with governing standards in audit fieldwork

·         Follow good working paper practices such as cross-referencing

·         Observe conditions or operations

·         Apply all the requisite working paper principles including completeness, accuracy, relevance, 

          objectivity, neatness and cross referencing

·         Retain and protect working papers

·         Utilize all five attributes in audit observations

·        Determine if appropriate action has been taken in regard to significant audit concerns and 

         corrective actions reported in prior audits

·         Draft documents with clarity, brevity and accuracy

·         Eliminate jargon, redundancy, and the passive voice from written texts

·         Proofread written work ensuring that it is clear, concise, and free of grammatical errors

·         Produce professional reports that are accurate, comprehensive, organised and reader-

          oriented

·         Prepare and present related graphical data in written document

Attitude

·         Appreciate the importance of exercising sound professional judgement in the conduct of Audit 

          Fieldwork

·         Appreciate the need to adhere to established data gathering techniques in Audit processes

·         Appreciate the importance of knowing the attributes of good audit observations

·         Value the importance of developing effective reports as part of their commitment to their roles 

           and responsibilities as professionals

Course Content – day 1

 

Introduction to Audit Fieldwork

o    Framework – Delineation of where audit fieldwork fits in the whole auditing process

o    Definition and  Purpose

o    The role of professional judgement

o    Compliance & Substantive Testing – definition and difference between the two

·         Governing Standards

o    ISPPIA 1200 – Proficiency and Due Professional Care

      • 1210 – Proficiency
      • 1220 – Due Professional Care

o    ISPPIA  2300 – Performing the Engagement

      • 2310 – Identifying Information
      • 2320 – Analysis and Evaluation
      • 2330 – Recording Information

 

Course Content – day 2 – 3

  The Audit Fieldwork Process: Steps –

    • Gaining an understanding of the activity, system, or process under review and the prescribed policies and procedures, supplementing and continuing to build upon the information already obtained in the preliminary survey.

o   Observing conditions or operations.

o   Interviewing people.

o   Examining assets and accounting, business, and other operational records.

o   Analyzing data and information.

o   Reviewing systems of internal control and identifying internal control points.

o   Evaluating and concluding on the adequacy (effectiveness and efficiency) of internal controls.

o   Conducting compliance testing.

o   Conducting substantive testing.

o   Determining if appropriate action has been taken in regard to significant audit concerns and 

     corrective actions reported in prior audits.

Course Content – day 4

 ·          Tools and Techniques  -

o   Limitations and benefits

§  Sampling

§  Analytical Review

§  Control questionnaires

§  Tests of transactions, processes and account balances

·          Work paper Principles

o   Completeness

o   Accuracy

o   Relevance

o   Objectivity

o   Neatness

o   Cross referencing principles

o   Filing

o   Retention and Protection of work papers

 Course Content – day 5

 ·          Development of Audit Observations

o   Five (5) attributes of audit findings

o   Principles of Report Structure

o   Executive Summary

o   Local/Minor and Significant Issues

o   Sentence Clarity and Plain language

 

Course Content – day 6 - 7

·          Written Communication in the Modern Organisation

o   Essential Elements of Good Writing

o   Mechanics of English

o   Common Errors In Writing

o   Making It All Make Sense: Arranging Details in Logical Sequence

o   Effective Proofreading and Editing

 

·          The Report Writing Process

o   Gathering and Analysing the Report Data

o   Report Outlining and Preparation

o   General Structure and Format of Reports

o   Preparing and Incorporating Graphical Data in Reports 

o   Drafting and Finalising the Report

 

Suggested Class Room Activities:

 ·         Participants will be engaged throughout the module with Case Studies and Class Exercises.

·         Participants will be assessed throughout the module as well as at the end.  The in-course  

          evaluation will comprise several case studies/ exercises that will allow the participants to get 

          hands-on training in developing working papers and drafting reports.

Text Reading:  Sawyer’s Internal Auditing by Lawrence B. Sawyer

Supplementary Materials/Resources:  www.theiia.org; Sampling: A Guide for Internal Auditors by Barbara Apostolou; Clarity, Impact, Speed: Delivering Audit Reports that matter, Sally Cutler; Introduction to Auditing: Logic, Principles and Techniques by Richard L. Ratliff, Ph.D., CIA and Kurt F. Reding, Ph.D., CIA, CPA, CMA

 

Course Delivery Methods:  

·         Lecture

·         Discussions

·         Skill practices

·         Case studies.

Assessment Strategies:

·         Individual/Group Assignment ( Case Studies)            100%





Module 3: Auditing Financial Statements

Duration:                   30 hours

 

Course Overview:

 

This module provides a background of the international standards as it relates to financial statements, their purpose and content.  The accrual and cash accounting concepts that co-exist throughout the GOJ environment and will be explained in this module.

 

 

General Objectives:

·         Understand the purpose of financial statements

·         Understand key considerations for preparing Financial Statements in accordance with IFRS 1 and relevant audit documentation for cash and accrual financial statements audit.

 

Specific Objectives:  On completion of this module, the participants should be able to:

 

Knowledge

·         State the definition for and purpose of financial statements

·         Outline the details of governing standards

·         Analyze Financial Statement Assertions

·         Examine the impact of Risk on the Audit of the Financial Statements

·         Outline the details of Audit Risk and its components

·         Explain how Audit is to be conducted in light of the of the GoJ Budget Cycle

·         Give a detailed overview of IFRS Financial Statements

·         Give a detailed overview of the GoJ Financial Statement

·         Detail the steps that must be taken to audit the financial statements

 

Performance

·         Apply Governing Standards consistently in the preparation of audit documents

·         Apply Financial Statement Assertions to audit reviews

·         Prepare audit statement in keeping with the standards outline in ISA 300

·         Prepare Audit Documentation for Financial Statement Audit

·         Conduct the Audit in keeping with the expectations of the of the GoJ Budget Cycle

·         Audit the GoJ Financial Statement in keeping with established standards

·         Audit  Financial Statements in keeping with established IFRS Standards

·         Adhere to the standards and expectations of the GoJ Budget

 

 

Attitude

·         Appreciate the importance of applying government standards in the preparation of audit documents

·         Appreciate the importance of preparing Financial Statement in keeping with the GoJ Budget Cycle

 

Course Content – day 1

 

  • Financial Statements- Definition and Purpose
  • Governing Standards: -

o   IPSAS

o   IFRS

o   Accrual Accounting

o   Cash Accounting

·         Financial Statement Assertions

 

Course Content – day 2

 

·         Audit Planning- Understanding Audit Risk and Financial Statements

o   Overview ISA 300

o   Audit Documentation for Financial Statement Audit

o   Impact of Risk on the Audit of the Financial Statements

o   Understanding Audit Risk and its components

o   Understanding Audit Risk to the Financial Statements

o   Understanding the Entity and its Environment and assessing the Risks of Material Misstatement ISA 315

o   Understanding the Factors influencing audit risk to the Financial Statements

o   To understand the management of the audit risk

o   The Auditor’s Procedures in Response to Assessed Risks

o   Materiality

o    Audit Assertions

    • Understand the minimum audit assertions : COVED
    • Understand the audit approach using the  assertions

 

Course Content – day 3

 

  • GoJ Budget Cycle

·         How to Audit –  GoJ Budget Cycle

  • Overview of IFRS Financial Statements
    • Statement of Financial Position
    • Statement of Comprehensive Income
    • Statement of Cashflow
    • Notes
  • Overview of GoJ Financial statement

o   Definition and Purpose

o   Budget Approval Process

o   Nature and Function

 

Course Content – day 4

 

·         GoJ Financial Statement: -

o   FS1 Trial Balance

o   FS2 Receipts and Payments

o   FS3 and 4 Bank Reconciliation Statements and Bank Balance

o   FS5, 6, 10, 11 Expenditure and Advance

§  Overview of the financial statements

§  How to audit the financial statements

 

Course Content – day 5

 

·         Other Financial Statements (GoJ)

o    Deposit

o    Commitment

·         GoJ Financial Statement: -

o   FS17 Appropriation in Aid

o   Appropriation Account

§  Review of the relevant accounts

§  Audit procedures for the statements        

 

Suggested Text Reading:   

·         Relevant IFRS, ISA and IAS Standards

·         ACCA – Financial Reporting Study Texts

·         GOJ - Internal Audit Manual

·         Sawyer’s Internal Auditing by Lawrence B. Sawyer

 

Supplementary Materials/Resources:       www.theiia.org; www.accaglobal.org

 

Course Delivery Methods:  

·         Lecture

·         Group Discussions

·         Case Studies

·         Practical Exercises/ Skill practices

 

Assessment Strategies:

·         Individual/Group Assignments           100%

 

 


Module 4: Auditing the Procurement Process


Duration:                   33 hours

Course Overview:

This module provides background knowledge of the government of Jamaica procurement standards.  An overview of the strategy, planning, methods and the principles of procurement will be discussed.    This module is also designed to capture the internal auditor’s role as well as the steps to follow when conducting a procurement audit

 General Objectives: 

  • Understand the role of the auditor in the procurement process and the relevant legislation/policies governing procurement procedures in the public sector

 Course Delivery Methods:  

·         Lecture

·         Group Discussions

·         Case Studies

·         Practical Exercises/ Skill practices

 Assessment Strategies:

·         Individual/Group Assignments           70%

·         Final Examination (30%)