Audit planning and tests of controls Only Study Guide for AUE3701

CONTENTS Page TOPIC 1: Introduction 1 TOPIC 2: The Preliminary audit engagement 9 TOPIC 3: Planning an audit 19 TOPIC 4: Obtaining audit evidence 105 TOPIC 5: Internal control concepts 131 TOPIC 6: Tests of controls in cycles 161 Attachment 1 201 Attachment 2 206 (iv) 1 AUE3701/1 TOPIC 1 Introduction 1 WELCOME Dear Student It is with great pleasure that we welcome you to the 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 have a more positive learning experience. We wish to congratulate you on successfully completing your AUE200 studies. At the same time, we want to warn you that studying auditing at third-year level is more intense because we are going to enhance your knowledge level to enable you to integrate various aspects of auditing in scenario-based questions and in auditing practice. 2 PURPOSE This module is intended for trainee accountants and auditors or individuals in related fields, such as 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 of 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 Those of you credited with this module will know the basic auditing concepts, will be able to apply you