AUE3761
STUDY GUIDE
, lOMoARcPSD|21997160
The audit process
AUE3761
Year module
Department of Auditing
This tutorial letter contains important information
about your module.
BARCODE
, lOMoARcPSD|21997160
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 ..................................................................... 11
LESSON 2.1: The preliminary audit engagement stage ......................................................................... 12
LESSON 3: PLANNING AN AUDIT ....................................................................................................... 23
LESSON 3.1: Planning an audit of financial statements ........................................................................ 25
LESSON 3.2: Understanding the entity and its environment ................................................................... 28
LESSON 3.3: Identifying and assessing risk ........................................................................................... 34
LESSON 3.4: The auditor’s responsibilities relating to fraud ................................................................... 60
LESSON 3.5: Consideration of laws and regulations in an audit of financial statements ......................... 66
LESSON 3.6: Materiality ......................................................................................................................... 72
LESSON 3.7: The auditor’s responses to risk ........................................................................................ 84
LESSON 3.8: The overall audit strategy ................................................................................................. 92
LESSON 3.9: The audit plan .................................................................................................................. 97
LESSON 3.10: Audit documentation ..................................................................................................... 102
4 SELF-ASSESSMENT QUESTIONS ....................................................................................... 107
5 SELF-ASSESSMENT SOLUTIONS ....................................................................................... 122
2
, lOMoARcPSD|21997160
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 2021
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
Mrs S Abed 012 429 4544
Mrs A Botha 012 429 6147
Mr T Diale 012 429 8497
Mr K Joubert 012 429 4068
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. When
sending an e-mail, make sure that you do so by using your Unisa mylife e-mail address.
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
STUDY GUIDE
, lOMoARcPSD|21997160
The audit process
AUE3761
Year module
Department of Auditing
This tutorial letter contains important information
about your module.
BARCODE
, lOMoARcPSD|21997160
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 ..................................................................... 11
LESSON 2.1: The preliminary audit engagement stage ......................................................................... 12
LESSON 3: PLANNING AN AUDIT ....................................................................................................... 23
LESSON 3.1: Planning an audit of financial statements ........................................................................ 25
LESSON 3.2: Understanding the entity and its environment ................................................................... 28
LESSON 3.3: Identifying and assessing risk ........................................................................................... 34
LESSON 3.4: The auditor’s responsibilities relating to fraud ................................................................... 60
LESSON 3.5: Consideration of laws and regulations in an audit of financial statements ......................... 66
LESSON 3.6: Materiality ......................................................................................................................... 72
LESSON 3.7: The auditor’s responses to risk ........................................................................................ 84
LESSON 3.8: The overall audit strategy ................................................................................................. 92
LESSON 3.9: The audit plan .................................................................................................................. 97
LESSON 3.10: Audit documentation ..................................................................................................... 102
4 SELF-ASSESSMENT QUESTIONS ....................................................................................... 107
5 SELF-ASSESSMENT SOLUTIONS ....................................................................................... 122
2
, lOMoARcPSD|21997160
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 2021
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
Mrs S Abed 012 429 4544
Mrs A Botha 012 429 6147
Mr T Diale 012 429 8497
Mr K Joubert 012 429 4068
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. When
sending an e-mail, make sure that you do so by using your Unisa mylife e-mail address.
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
