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447158742 South Africa CTA Audit Cheat Sheet
Auditing (University of South Africa)
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AUDIT CHEAT SHEET
The notes are based on the UNISA Tutorial Letters
Contents
TL102 Pre-engagement activities ......................................................................................................... 2
TL102 Planning......................................................................................................................................... 2
TL103 Internal controls .......................................................................................................................... 5
TL103 Audit evidence ............................................................................................................................ 10
TL103 Test of controls ........................................................................................................................... 10
TL103 Substantive ................................................................................................................................. 13
TL103 CAATS.......................................................................................................................................... 22
TL104 Completion of audit ................................................................................................................... 23
TL104 Reporting ..................................................................................................................................... 24
TL104 Special investigations ............................................................................................................... 27
TL105 Code of conduct .......................................................................................................................... 28
TL105 APA and IRBA ........................................................................................................................... 29
TL105 Responsibility towards fraud .................................................................................................. 30
TL105 Companies Act............................................................................................................................ 32
TL106 Revision........................................................................................................................................ 33
1
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TL102 Pre-engagement activities
IMPORTANT PRINCIPLE
As per ISA 220, par 12, and A8 and ISQC 1, par 26, before an audit firm can accept
or continue a client relationship, it has to consider the following:
1. whether the engagement team is competent to perform the audit engagement and
has the necessary capabilities, including time and resources to do so;
2. whether the audit firm and engagement team can comply with the relevant ethical
requirements;
3. whether the audit firm has considered the integrity of the principal owners, key
management and those charged with governance of the entity; and
4. if there are any significant matters that have arisen during the current or previous
audit engagement, and their implications for continuing the relationship.
EXAMINATION TECHNIQUE
The threats in the above answer are explained by linking them to the information in
the scenario, whereas the threats in the top part of the answer were not linked to the
information in the scenario.
TL102 Planning
IMPORTANT PRINCIPLE
What is internal control?
ISA 315, par 4, stipulates that internal controls is
the process designed, implemented and maintained
by those charged with governance, management and other personnel
to provide reasonable assurance about the achievement of an entity’s objectives
with regard to
reliability of financial reporting;
effectiveness and efficiency of operations; and
compliance with applicable laws and regulations.
COMMENT
Internal control, according to ISA 315, par 14 to 24, consists of the following
components:
the control environment;
the entity’s risk assessment process;
the information system (including the related business processes relevant to
financial reporting and communication);
control activities relevant to the audit; and
monitoring of controls.
2
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Study these components from ISA 315. Also make use of ISA 315, Appendix 1, for
further guidance on these components. Flag Appendix 1 of ISA 315, as it explains
these components in detail and gives valuable examples to guide you in a test or the
examination.
COMMENT
Please note the following with regards to the business cycles:
It is fundamentally important to learn the cycles and have an in depth knowledge
thereof.
The aforementioned detailed cycles can be found in Auditing Notes for South
African Students (Jackson & Stent), 10th edition from chapter 10 to 14.
You will not have access to the cycles in tests and examinations sessions as you are
not allowed to take Auditing Notes for South African Students into the sessions.
It is also important to practice writing out questions on the business cycles under
examination conditions, and questions on these can be found in Chapter 3 of Applied
Questions on Auditing, 8th edition.
EXAMINATION TECHNIQUE
Internal control related questions are typically examined as follows:
REQUIRED: Weaknesses, risks and recommendations
A question can either only require one of the above (e.g. only the weaknesses), or it
can require a combination of two (e.g. weaknesses and risks), or even weaknesses,
risks and recommendations.
If more than one of the above are required, present your answer in a tabular format
(even if the question does not specifically require it). This will assist you in presenting
your answer in a structured manner and it will make it easier for the marker.
When you are required to identify weaknesses in an internal control system, it is
important to remember to
not only discuss those internal controls that are performed incorrectly (as indicated
in the given scenario);
but also discuss the key internal controls that should be performed but are not
mentioned in the scenario.
Please note: These discussions should still be relevant to what is given in the scenario.
EXAMPLE
John is responsible for the maintenance of the fixed asset register of the company. He
is also responsible for preparing a reconciliation of the fixed asset register to the
general ledger accounts on a regular basis. He also records all purchases and sales of
fixed assets in the accounting records. John signs all documents and reconciliations
he prepares.
Required
3
Downloaded by David Grefory ()
447158742 South Africa CTA Audit Cheat Sheet
Auditing (University of South Africa)
Scan to open on Studocu
Studocu is not sponsored or endorsed by any college or university
Downloaded by David Grefory ()
, lOMoARcPSD|26213750
AUDIT CHEAT SHEET
The notes are based on the UNISA Tutorial Letters
Contents
TL102 Pre-engagement activities ......................................................................................................... 2
TL102 Planning......................................................................................................................................... 2
TL103 Internal controls .......................................................................................................................... 5
TL103 Audit evidence ............................................................................................................................ 10
TL103 Test of controls ........................................................................................................................... 10
TL103 Substantive ................................................................................................................................. 13
TL103 CAATS.......................................................................................................................................... 22
TL104 Completion of audit ................................................................................................................... 23
TL104 Reporting ..................................................................................................................................... 24
TL104 Special investigations ............................................................................................................... 27
TL105 Code of conduct .......................................................................................................................... 28
TL105 APA and IRBA ........................................................................................................................... 29
TL105 Responsibility towards fraud .................................................................................................. 30
TL105 Companies Act............................................................................................................................ 32
TL106 Revision........................................................................................................................................ 33
1
Downloaded by David Grefory ()
, lOMoARcPSD|26213750
TL102 Pre-engagement activities
IMPORTANT PRINCIPLE
As per ISA 220, par 12, and A8 and ISQC 1, par 26, before an audit firm can accept
or continue a client relationship, it has to consider the following:
1. whether the engagement team is competent to perform the audit engagement and
has the necessary capabilities, including time and resources to do so;
2. whether the audit firm and engagement team can comply with the relevant ethical
requirements;
3. whether the audit firm has considered the integrity of the principal owners, key
management and those charged with governance of the entity; and
4. if there are any significant matters that have arisen during the current or previous
audit engagement, and their implications for continuing the relationship.
EXAMINATION TECHNIQUE
The threats in the above answer are explained by linking them to the information in
the scenario, whereas the threats in the top part of the answer were not linked to the
information in the scenario.
TL102 Planning
IMPORTANT PRINCIPLE
What is internal control?
ISA 315, par 4, stipulates that internal controls is
the process designed, implemented and maintained
by those charged with governance, management and other personnel
to provide reasonable assurance about the achievement of an entity’s objectives
with regard to
reliability of financial reporting;
effectiveness and efficiency of operations; and
compliance with applicable laws and regulations.
COMMENT
Internal control, according to ISA 315, par 14 to 24, consists of the following
components:
the control environment;
the entity’s risk assessment process;
the information system (including the related business processes relevant to
financial reporting and communication);
control activities relevant to the audit; and
monitoring of controls.
2
Downloaded by David Grefory ()
, lOMoARcPSD|26213750
Study these components from ISA 315. Also make use of ISA 315, Appendix 1, for
further guidance on these components. Flag Appendix 1 of ISA 315, as it explains
these components in detail and gives valuable examples to guide you in a test or the
examination.
COMMENT
Please note the following with regards to the business cycles:
It is fundamentally important to learn the cycles and have an in depth knowledge
thereof.
The aforementioned detailed cycles can be found in Auditing Notes for South
African Students (Jackson & Stent), 10th edition from chapter 10 to 14.
You will not have access to the cycles in tests and examinations sessions as you are
not allowed to take Auditing Notes for South African Students into the sessions.
It is also important to practice writing out questions on the business cycles under
examination conditions, and questions on these can be found in Chapter 3 of Applied
Questions on Auditing, 8th edition.
EXAMINATION TECHNIQUE
Internal control related questions are typically examined as follows:
REQUIRED: Weaknesses, risks and recommendations
A question can either only require one of the above (e.g. only the weaknesses), or it
can require a combination of two (e.g. weaknesses and risks), or even weaknesses,
risks and recommendations.
If more than one of the above are required, present your answer in a tabular format
(even if the question does not specifically require it). This will assist you in presenting
your answer in a structured manner and it will make it easier for the marker.
When you are required to identify weaknesses in an internal control system, it is
important to remember to
not only discuss those internal controls that are performed incorrectly (as indicated
in the given scenario);
but also discuss the key internal controls that should be performed but are not
mentioned in the scenario.
Please note: These discussions should still be relevant to what is given in the scenario.
EXAMPLE
John is responsible for the maintenance of the fixed asset register of the company. He
is also responsible for preparing a reconciliation of the fixed asset register to the
general ledger accounts on a regular basis. He also records all purchases and sales of
fixed assets in the accounting records. John signs all documents and reconciliations
he prepares.
Required
3
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