Lovely Professional University, Punjab

Course Code ACC202 Course Category Course Title AUDITING THEORY AND PRACTICE Courses with conceptual focus Course Planner 14797::Manu Kalia Lectures 3.0 Tutorials Practicals Credits 1.0 0.0 4.0

TextBooks Sr No T-1 Title A Handbook of Practical Auditing Author Edition Year 2012 Publisher Name S Chand & Company Ltd.(1970),New Delhi. B.N 14th Tandon,S.Sudharshanam,S. Sundharabahu

Reference Books Sr No R-1 Other Reading Sr No OR-1 OR-2 OR-3 OR-4 OR-5 OR-6 OR-7 OR-8 OR-9 OR-10 OR-11 Journals articles as Compulsary reading (specific articles, complete reference) The role of mandatory cost audit in enhancing trust: the case of India (http://search.proquest.com/pqcentral/docview/211333189/fulltextPDF/13F844582387E3AA694/1?accountid=80692 , The status of EDP Auditing , Article on statutory audit of accounts of company , Article on RBI to conduct management audit of foreign banks , Article on Purposes and limitations of a Balance sheet audit , Article on Internal audit:Harnessing its full potential , Study material on Special audit , Special Audit , Auditing Principles & Techniques by S.K. Basu, 2007, Pearson Education , Article on Balance sheet audit , CARO MACARO RULES , Title Auditing Principles and Practice Author Sharma, S.D Edition 3rd Year 2012 Publisher Name Taxmann Publishers

Relevant Websites Sr No RW-1 RW-2 RW-3 (Web address) (only if relevant to the course) http://accountlearning.blogspot.in/2012/02/differences-between-verification-and.html www.icai.org http://en.wikipedia.org/wiki/Royal_Mail_Case Salient Features Difference between verification and vouching Contemporary information on auditing Royal Mail Case

RW-4

http://www.ntpc.co.in/annualreports/2008-09/Auditors_Report09.pdf

Audit report of NTPC

LTP week distribution: (LTP Weeks) Weeks before MTE Weeks After MTE Spill Over 7 7 3

Detailed Plan For Lectures

Week Number Lecture Number Broad Topic(Sub Topic) Chapters/Sections of Text/reference books Other Readings, Lecture Description Relevant Websites, Audio Visual Aids, software and Virtual Labs Learning Outcomes Pedagogical Tool Demonstration/ Case Study / Images / animation / ppt etc. Planned Discussion

Week 1

Lecture 1

An Introduction to Auditing (Definition of Audit, Difference between Auditing and Accountancy) An Introduction to Auditing(Scope of Auditing) An Introduction to Auditing (Objectives of Auditing)

T-1:Chapter 1

Conceptual Framework Develop the skill of of auditing, Auditing vs determining and Accounting judging the reliability of financial statements RW-2 Areas covered in the branch of auditing Purpose of auditing as a field of investigation

T-1:Chapter 1 R-1:Chapter 1 T-1:Chapter 1 R-1:Chapter 1 T-1:Chapter 1

Identifying the area Discussion covered by auditing as a process Identifying the objectives of auditing Discussion

Lecture 2

An Introduction to Auditing (Features and Classification) An Introduction to Auditing (Meaning of Internal Check)

Features of auditing and Illustrate various types types of audits of audits with the help of examples Meaning of Internal check

Discussion

T-1:Chapter 14

Identifying the internal class discussion check process operational in an organisation

An Introduction to Auditing (Nature and scope of Internal Audit) Lecture 3 An Introduction to Auditing (Internal Control- Nature and scope) An Introduction to Auditing (Internal Audit and Statutory audit)

T-1:Chapter 14

OR-6

Areas covered While Identify the role of Discussion conducting Internal audit internal audit system in business Nature and area covered Identify the role of Class discussion under Internal control internal control system system in business

T-1:Chapter 14

T-1:Chapter 14

OR-3

Overview of important types of audit

Compare and contrast the legal status of internal and statutory audit Identify the important documents relating the process of auditing

Disucssion

Week 2

Lecture 4

An Introduction to Auditing(Audit note book -Meaning and content)

T-1:Chapter 12

Overview of important documentation relating to auditing

Discussion

Week 2

Lecture 4

An Introduction to Auditing(Audit working papers) An Introduction to Auditing (Protection and preservation and ownership of Audit working papers)

T-1:Chapter 12

Overview of important documentation relating to auditing Overview of important documentation relating to auditing

Identify the important documents relating the process of auditing Identify the important documents relating the process of auditing

Discussion

T-1:Chapter 12

Discussion on mentioned article

Lecture 5

Audit of Assets and Liabilities (Objectives of verification of assets and liabilities) Audit of Assets and Liabilities (Balance sheet Audit)

T-1:Chapter 19

Overview of main Illustrate the process of Discussion objectives of verification verifying assets and of assets and liabilities liabilities RW-1 Audit of Balance sheet items like share capital, Reserves and surplus, loans, currentliabilites Verification process for assets and liabilities which comprises of a comparison of ledger accounts with Balance sheet Lecture 6 for Vouching process which includes Cash sales, Receipts from Debtors, Cash purchases, Payment to creditors, payment of wages, Outstanding liabilites Lecture 7 for contigency Identifying the process Discussion of verifying Balance sheet items Identify the process of verification of assets and liabilities Discussion

T-1:Chapter 19

Audit of Assets and Liabilities (Verificaiton and valuation of assets and liabilities)

T-1:Chapter 19

OR-10

Lecture 6

Audit of Assets and Liabilities (Vouching: Cash sales, Receipts from Debtors, Cash purchases, Payment to creditors, payment of wages, Outstanding liabilites)

T-1:Chapter 19

Identify how to verify vouchers

Discussion

Week 3

Lecture 7

Audit of Assets and Liabilities (Vouching: Cash sales, Receipts from Debtors, Cash purchases, Payment to creditors, payment of wages, Outstanding liabilites)

T-1:Chapter 19

Lecture 6 for Vouching process which includes Cash sales, Receipts from Debtors, Cash purchases, Payment to creditors, payment of wages, Outstanding liabilites Lecture 7 for contigency

Identify how to verify vouchers

Discussion

Lecture 8

Audit of Assets and Liabilities (Audit of Capital and Revenue expenditures)

T-1:Chapter 19

Overview of audit of capital and Revenue items

Compare and contrast capital and revenue items and understanding how to verify them

Discucsion

Week 3

Lecture 9

Audit of Assets and Liabilities (Audit of Depreciation and Reserves) Audit of Companies(Appointment)

T-1:Chapter 19

Overview of audit of Learning the process of Discussion depreciation and various verification of reserves depreciaton and reserves Appointment of an auditor Removal of an auditor Illustrate the Discussion Appointment terms and conditions for auditor Learning how to terminate the employment of an auditor Discussion

Week 4

Lecture 10

T-1:Chapter 22

Audit of Companies(Removal)

T-1:Chapter 22

Audit of Companies(Qualification and Disqualification)

T-1:Chapter 22

Appointment and Qualification of an auditor

Awareness about the Discussion procedure to appoint an auditor, his qualification,remunerati on Understanding the Discussion remuneration policy for an auditor Knowledge about the Discussion ethical issues in front of auditors Identifying the CARO and MAOCARO rules Discussion

Audit of Companies (Remuneration) Lecture 11 Audit of Companies(Rights , Duties and Liabilities of an Auditor) Audit of Companies(CARO AND MAOCARO) Audit of Companies(Special considerations in company audit)

T-1:Chapter 22

Remuneration of an auditor Duties and liabilities of an auditor Homework,Test 1

T-1:Chapter 22

Lecture 12 Week 5 Lecture 13 R-1:Chapter 8

Knowledge about the ethical issues in front of auditors

R-1:Chapter 9

Special considerations Identifying items of like compliance and non special consideration compliance of the provisions of companies act, reporting requirements

Discussion

Lecture 14

Audit of Companies(Presentation of Financial statements)

T-1:Chapter 22

Presentation of financial Learning the auditing of Discussion statements as per GAAP presentation of financial statements Presentation of financial Learning the auditing of Discussion statements as per GAAP presentation of financial statements Audit procedure for issue Illustrate the process of Discussion of share capital, share auditing share captial issued at premium and discount, sweat equity shares

Lecture 15

Audit of Companies(Presentation of Financial statements)

T-1:Chapter 22

Week 6

Lecture 16

Audit of Companies(Audit of Share capital)

T-1:Chapter 22

Week 6

Lecture 17

Audit of Companies(Audit of Share capital)

T-1:Chapter 22

Audit procedure for issue Illustrate the process of Discussion of share capital, share auditing share captial issued at premium and discount, sweat equity shares Homework,Test 2 Audit of dividends and Understanding how to debentures, Issue and audit dividends and redemption of debentures debentures RW-3 Lecture 20 for Liability for unaudited accounts Lecture 21 for Revision Identifying the consequences of unaudited accounts Identifying the consequences of unaudited accounts Discussion

Lecture 18 Week 7 Lecture 19 Audit of Companies(Audit of dividends and debentures) Audit of Companies(Liability for un-audited Accounts) T-1:Chapter 22

Lecture 20

Discussion

Lecture 21

Audit of Companies(Liability for un-audited Accounts)

RW-3

Lecture 20 for Liability for unaudited accounts Lecture 21 for Revision

Discussion

MID-TERM
Week 8 Lecture 22 Lecture 23 Lecture 24 Auditor's Report(Basic elements of an Audit Report) Auditor's Report(Kinds of Audit Report) Auditor's Report(Distinction between Report & Certificate) Auditor's Report(Importance of Audit Report) Week 9 Lecture 25 Auditor's Report(Audit of charitable institutions) T-1:Chapter 13 T-1:Chapter 13 T-1:Chapter 13 RW-4 Contents of an audit report Types of audit report Difference between a report and audit certificate OR-4 Importance of audit report Auditing procedure in charitable institutions Illustrate how to draft an audit report Identifying various types of audit reports Case analysis Discussion

Learning the formats of Discussion audit report and certificate Understanding the purpose of preparation of an audit report Identifying the procedure for conducting audit in various institutions other than company Discussion

T-1:Chapter 13

T-1:Chapter 35

Discussion

Lecture 26

Auditor's Report(Audit of Educational Institutions)

T-1:Chapter 35

Auditing procedure in educational institutions

Learning the procedure Discussion for conducting audit in various institutions other than company Identify the procedure Discussion for conducting audit in various institutions other than company Ilustrate the procedure Discussion for conducting audit in various institutions other than company

Lecture 27

Auditor's Report(Audit of Club)

T-1:Chapter 35

Auditing procedure in clubs

Week 10

Lecture 28

Auditor's Report(Audit of Hotels)

T-1:Chapter 35

Auditing procedure in Hotels

Week 10

Lecture 29

Auditor's Report(Audit of Hire purchase and leasing companies)

T-1:Chapter 35

Auditing procedure in Hire purchase and leasing companies OR-1 Basic introduction to Cost audit

Learning the procedure Discussion for conducting audit in various institutions other than company Knowledge about the procedure of verifying cost accounts Discussion

Lecture 30

Special Areas of Audit(Cost Audit: Meaning, Types of cost audit, Advantages, Cost Audit Programme) Special Areas of Audit (Management Audit, Management Audit Programme) Special Areas of Audit(Tax Audit, Tax Audit Programme) Special Areas of Audit(Special Audit u/s 233 A)

T-1:Chapter 30

Week 11

Lecture 31

T-1:Chapter 31

Basic introduction to Management Audit

Learn to reveal the Discussion irregularities in working of management Discussion

Lecture 32

T-1:Chapter 32

Basic introduction to Tax Knowledge about the Audit procedure of verifying tax payments OR-8 Lecture 33 for Special audit Lecture 34 for contigency

Lecture 33

Developing necessary Discussion skills to do special audit

Week 12

Lecture 34

Special Areas of Audit(Special Audit u/s 233 A)

OR-8

Lecture 33 for Special audit Lecture 34 for contigency

Developing necessary Discussion skills to do special audit

Lecture 35

Special Areas of Audit(Prior period items, extraordinary items, changes in accounting policies events occurring after Balance sheet date) Recent Trends in Auditing(Impact of computerization onAuditing Approach) Recent Trends in Auditing(Types of Internal control in Computer based systems) Recent Trends in Auditing(Types of Internal control in Computer based systems) Recent Trends in Auditing (Auditing in EDP environment) T-1:Chapter 15

OR-9

Prior period items,extraordinary items, changes in accounting policies events occurring after Balance sheet date Computerized accounting records

Identifying the process Discussion of verifying extraordinary items

Lecture 36

Illustrating auditing Discussion process for computerized accounts

Week 13

Lecture 37

T-1:Chapter 15

Types of internal control Learning the Discussion in Computer based verification of accounts systems made in a computerized manner Types of internal control Learning the Discussion in Computer based verification of accounts systems made in a computerized manner OR-2 Auditing in EDP Environment which includes Control over input, control over output Learning the Discussion verification of accounts made in a computerized manner

Lecture 38

T-1:Chapter 15

Lecture 39

T-1:Chapter 15

Week 14

Lecture 40

Recent Trends in Auditing (Problems and control in EDP environment)

T-1:Chapter 15

Problems in EDP Environment like absence of supporting vouchers, storage problem, coding and computer virus problem etc Lecture 41 for Computerized accounting records like Test data, controlled processing and computer audit programmes Lecture 42 for Revision

Learning the Discussion verification of accounts made in a computerized manner

Lecture 41

Recent Trends in Auditing (Computer assisted auditing techniques)

T-1:Chapter 15

Learning the Discussion verification of accounts made in a computerized manner

Lecture 42

Recent Trends in Auditing (Computer assisted auditing techniques)

T-1:Chapter 15

Lecture 41 for Computerized accounting records like Test data, controlled processing and computer audit programmes Lecture 42 for Revision

Learning the Discussion verification of accounts made in a computerized manner

SPILL OVER
Week 15 Lecture 43 Lecture 44 Lecture 45 Spill Over Spill Over Spill Over

Scheme for CA:

Component Homework,Test Frequency 2 Total :Out Of 3 Each Marks Total Marks 10 10 20 20

Details of Academic Task(s)

AT No. Objective Topic of the Academic Task Nature of Academic Task (group/individuals/field work Evaluation Mode Allottment / submission Week 2/4

Homework,Test 1

To test the Syllabus covered in the class from Lecture 1 to Lecture 11 which Individual conceptual clarity of comprises of Introduction to auditing: Nature, scope and students. objectives, Internal control, Internal check, Internal audit, verification of Balance sheet, Vouching of transactions, Appointment, removal and remuneration of auditor

Accuracy in the test, Test will be of Maximum 30 Marks.

Homework,Test 2

To test the Test on the topics covered in the class from Lecture 1 to Lecture conceptual clarity of 16 which includes Introduction to auditing: Nature, scope and students. objectives, Internal control, Internal check, Internal audit, verification of Balance sheet, Vouching of transactions, Appointment, removal and remuneration of auditor, audit of companies, audit of share capital and dividends. To make students Design an audit programme for the allocated sector keeping in aware of the view the special points to be considered while auditing. practical application of the subject.

Individual

Accuracy in the test, Maximum marks for test will be 30.

4/6

Homework,Test 3

Individual

Assignment submission - 5 marks, Presentation15 marks, Viva- 10 Marks

7/9

Plan for Tutorial: (Please do not use these time slots for syllabus coverage)
Tutorial No. Lecture Topic Type of pedagogical tool(s) planned (case analysis,problem solving test,role play,business game etc)

Tutorial 1 Tutorial 2 Tutorial 3 Tutorial 4 Tutorial 5 Tutorial 6 Tutorial 7

Discussion on basics of auditing Case analysis with regard to Creative accounting: Fraudulent practice leading to corporate collapses Case analysis with regard to Influence of Board Size and Independence on Firm Performance Discussion on auditing procedure

Discussion Case analysis,Role play Case analysis Discussion

Non-evaluative test for syllabus covered in the class till Test date. Doubts for Vouching of purchase book , Vouching of cash receipts etc. Audit of Personal Ledgers- Debtors, Creditors,CARO and MAOCARO Problem solving Case analysis

After Mid-Term
Tutorial 8 Doubts on Audit of All Assets and Liabilities Discussion on MTEs Insurance co. Branch Audit, Efficiency audit and Cost Audit Presentations for AT3 Presentations for AT3 Presentations for AT3 Presentations for AT3 Doubt clearing Doubt clearing

Tutorial 9

Case analysis

Tutorial 10 Tutorial 11 Tutorial 12 Tutorial 13 Tutorial 14

Presentations Presentations Presentations Presentations Doubt clearing