Summary CAS1501_ Study Revision Notes.

CAS1501_ Study Revision Notes. CAS1501 - Perspectives On Accountancy. THE INSTITUTE OF INTERNAL AUDITORS SOUTH AFRICA - IIA SA The IIA SA is part of an international network representing the interests of internal auditors worldwide. The IIA SA offers various classes of general membership – visit detail. However, only the Certified Internal Auditor (CIA) certification is an internationally recognised certification of internal auditors. Internal auditors can work in commerce and industry or as specialists in professional firms. The role of internal audit is not limited to financial reporting. Although accounting is an important skill for an internal auditor, the focus for internal auditors is the evaluation of operational, risk management, internal control and the governance processes of the organisation. The definition of internal auditing is: Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organisation's operations. It helps an organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. ( Internal auditors can thus also provide advice to the management of a business. Most of those individuals who currently work as internal auditors in South Africa are not certified as internal auditors. South Africa only has about 1500 CIAs. However, internationally, the demands on the internal auditing profession are increasing and the profession is working hard to improve its standing in business and in society. Like the other accountancy professions, the IIA requires academic study and practical experience as important for prospective CIAs. The CIA professional examination is an international assessment of the professionalism and competence of a prospective CIA. Since management decides on the size and role of the internal audit function, internal auditing is generally regarded as a “bonding cost” rather than an “agency cost”. Internal auditing is viewed as a bonding cost because management uses internal auditing to signal their commitment to competent and ethical management and decision making to the owners of a business. Such signalling aims to induce the owners to trust (bond with) management. 7. INDEPENDENT REGULATORY BOARD FOR AUDITORS - IRBA Members of IRBA are Registered Auditors and use the designation “RA”. An RA has the right to sign independent audit opinions. IRBA states it functions it to help create an ethical, value-driven financial sector that encourages investment, creates confidence in the financial markets and promotes sound practices. IRBA has a legal obligation in terms of the Auditing Profession Act to regulate RAs in South Africa. IRBA’s website sets the initiatives for achieving its function as follows: - Developing and maintaining auditing and ethical standards that are internationally comparable. - Providing an appropriate framework for the education and training of properly qualified auditors and their ongoing competence. - Registration of auditors who meet the registration requirements. - Monitoring registered auditors’ compliance with professional standards. - Investigating and taking appropriate action against registered auditors in respect of improper conduct. - Developing and maintaining stakeholder relationships to enhance performance, accountability and public confidence. IRBA proactively regulates all RA’s work through an Inspections directorate. Audit files and processes of RAs and their audit firms are subjected to inspections in five year cycles. However, the practice of a RA who audits public companies is inspected every three years. See In order to earn the right to sign audit opinions as RA, an individual start off by becoming a CA(SA). Thereafter, an additional period of at least eighteen months of specialised auditing experience involving complex tasks at a professional auditing firm is required. During the eighteen months period, the individual should be registered on IRBA’s Audit Development Programme (ADP). See RA plays a critical role in mitigating agency problems. All over the world and in South Africa laws require that certain entities’ annual financial statements should be audited by an independent RA (external auditor). An RA applies all the characteristics of a professional and protects the interests of business owners and the public by signing audit opinions. An auditor’s report provides reasonable (not absolute or factual) assurance about the fairness in all material respects of a set of annual financial statements. Let’s quickly recap. We have now been introduced to the “Who’s who in accountancy”, which is made up of seven accountancy professions. We highlighted the unique role of each accountancy profession and we are now familiar with the professional designation used by each profession’s members. We have also learnt some interesting facts about each profession. We obtained an understanding of how each of the profession’s members contributes to mitigating agency risks and how they protect the public interest. At this point, you may start to feel attracted to one of these professions. But you may also feel confused. Do not despair! In the next focus area, we move to reality! We will introduce you to the “Professional Development Bank Limited”. There you will obtain an understanding of how each accountancy professional fit into the structure of the Bank. You will further obtain an understanding of how each professional’s unique expertise contribute to the success of the business. And, We will also discover the criteria that the Bank uses when they selected accountancy professionals for appointment in the different roles. Ultimately, you will get a much clearer picture of your future accountancy role in the context of business. But for now, please go the classroom reflection in section 2.3.1 to find out what you should do for assignment 3. 2.3.1 Classroom reflection and Assignment 3 What have we done so far? You have learnt: About seven accountancy professions that make up the “Who’s who in accountancy”; The unique role of each of these seven accountancy professions; The professional designations used by each of the seven profession’s members; Some interesting facts about each profession; and How each of these profession’s members contribute to mitigating agency risks and how they protect the public interest. Assignment 3 It is now time for you to reflect on what you have learnt about the 7 accountancy professions. I want you to reflect on what you have learnt from this focus area by completing the “Who’s who quiz”. Remember that the “Who’s who quiz” should be submitted as your assignment 3. Please remember to keep a record of your answers in this quiz. You might need it later. Where to find the assignment? Go to ONLINE ASSESSMENT tab on this site where you will find the “Who’s who quiz” as well as the instructions on how to complete and submit the quiz. ”. Remember that the “Who’s who quiz” should be submitted as assignment 3 and that you should keep a record of your answers selected in the quiz. Where to now? Once you have completed assignment 3 you can work on the next section “2.4 Accountancy professionals in the world of business”. 2.4 Accountancy professionals in the world of business In the first focus area, we gathered that you as an accountancy professional will leave your “footprint” on business in the process of serving the interests of the public. The second focus area introduced you to the “Who’s who in accountancy”, namely seven of the accountancy professions. We enhanced our understanding by investigating the unique role of each accountancy profession and how their members contribute to mitigating agency risks in order to protect the interests of business owners and the public. In this focus area you will meet “Accountancy professionals in the world of business” that work at "Professional Development Bank Limited". This will be demonstrated to you by means of an organogram which you will find attached to the video below. More details Click on the video below to find out more about how accountancy in the world of business gets real: Click here and choose save to download this movie (The following is a link to the detailed transcript of the video - Detailed Transcript) (The following is a link to the organogram of Professional Development Bank Limited, as used in the video above - Organogram) Where to now? You can now work on the next section for a practical example of accountancy professionals getting real. 2.4.1 A practical example - getting real In the “Accountancy professionals in the world of business” focus area we determined that the appointment criteria for a junior accountant may link to the distinguishing characteristics of a professional. We will now work together to figure out how the “link” works. Please pay attention to the practical example as you will be required to complete the example as part of assignment 4 later. More detail To see the practical example please click on the video below: Right click here and choose save to download this movie (The following is a link to the detailed transcript of the video - Detailed Transcript) Where to now? You can now work on the next section to find out what is required from you for assignment 4 in “2.4.2 Classroom reflection”. 2.4.2 Classroom reflection - Assignment 4 What have you done so far? We noted the distinguishing characteristics of a professional are: Sound theoretical knowledge Pervasive qualities and skills Intensive academic education and practical training Assessed competency Professional body membership Compliance with a professional code of conduct Where to find the assignment? Go to the DISCUSSIONS tab and click on the folder of forum 3. Getting real reflection. That is where you will find Assignment 4. Go to the ADDITIONAL RESOURCES tab, select the Marking Rubrics folder and then the Assignment 4 Marking Rubric 2020 file for the marking rubric indicating how we will assess your assignment. Where to now? Once you have completed the assignment 4 you can work on the next section to access details on how professionals are “Making a difference” as part of wrapping up this learning unit. 2.5 Making a difference In this learning unit , we discussed the “footprint” of the accountancy professions. We discovered how each of the accountancy professions contribute to mitigating agency risks and how their members protect the public interest. Meeting the “Who’s who in accountancy” provided us with an understanding of the unique role of each accountancy profession. You are now also familiar with the professional designation used by each profession’s members. “Accountancy professionals in the world of business” contextualised accountancy professionals into the structure of an entity. You will now start to understand how each professional's unique expertise contributes to the success of the Bank. By now you should also be familiar with the appointment criteria used for accountancy professionals. Lastly, by doing a practical example, we illustrated the link between the appointment criteria and the distinguishing characteristics of professionals. Ultimately, you should now have a much clearer picture of your future role as an accountancy professional in the context of the business world, as well as your responsibility for the “footprint” that you will leave in the world of business. In doing so, you have the potential to develop into a successful accountancy professional. What's next? Congratulations! You have now successfully worked through learning unit 2 – Perspectives on accountancy professions. As part of the process you have also successfully completed and submitted assignments 2 – 4. You can now commence to learning unit 3. Learning unit 3 - Perspectives on corruption and fraud The content sections of this module are as follows: 3.1 What will I learn? 3.2 The game called corruption… 3.2.1 Living on the edge 3.2.1.1 Classroom reflection - Self-assessment 2 3.2.2 Meeting real corruption 3.2.2.1 Classroom reflection - Self-assessment 3 3.3 Being a fraudster… 3.3.1 Spotting corrupt activities… 3.3.2 What motivates corruption and fraud? 3.4 The big word – Plagiarism… 3.4.1 Classroom reflection - Self-assessment 4 3.5 Lead by example 3.6 Classroom reflection - Assignment 5 3.7 Making a difference Hello, and welcome to learning unit 3 – Perspectives on corruption and fraud. Corruption is everywhere. It affects all of us in our personal lives as well as all activities in the private and public sector of our economy; even sport and cultural activities are exposed to corruption. In this learning unit, you will be equipped with the knowledge to assist you in shaping your perspectives on corruption and fraud. We will discuss what is meant by “corruption” and some of the forms in which corruption can present itself, for example, fraud. You will also realise that YOU have a responsibility as future accountancy professional to join the fight against corruption in South Africa by making your voice heard and taking action. You will come to understand: What corruption is? What fraud is? What motivates people to commit fraud and corruption. How fraud and corruption impact on our daily lives. How corruption and fraud present themselves to accountancy professionals. How accountancy professionals should respond to corruption and fraud. Assignments? While shaping your perspectives on corruption and fraud you will be required to complete ONLINE ASSESSMENT 5. * It is strongly recommended that you complete the assignments as you work through the learning unit in sequential order.