ICMAP

SYLLABUS 2016
Estd. 1951

PROFESSIONAL LEVEL
P2 - Audit & Assurance
Weightage
Part-A Overview of Auditing and Assurance 15%
Part-E Part-A Part-B Audit Planning 20%
Part-B
Part-D Part-C Internal Controls 20%
Part-C
Part-D Audit Evidence 25%
Part-E Review And Reporting 20%

Syllabus Overview: l Determine legal and ethical considerations relating to

This course is divided into five main areas of audit. The
syllabus starts with the nature, purpose and scope of
assurance engagements both internal and external,
including the statutory audit, its regulatory environment,
and introduces professional ethics relating to audit and
assurance engagements. It then leads into planning an
audit. The syllabus then covers a range of areas relating
to an audit of financial statements including the scope of
internal control. These include evaluating internal
controls, audit evidence, and a review of the financial
statements. In addition to final review procedures, the last
section concentrates on reporting, including the form and
content of the statutory audit report.
Learning Outcomes:
On completion of this course, students will be able to:
l Explain the concept of audit and assurance.
the appointment and removal of auditor.
l Describe and evaluate internal controls, techniques
and audit tests, including IT systems to identify and
communicate control risks and their potential
consequences, making appropriate recommendations.
l Identify and describe the work and evidence obtained
by the auditor and others required to meet the
objectives of audit engagements and the application of
the International Standards on Auditing.
l Explain how consideration of subsequent events and
the going concern principle can inform the conclusions
from audit work and are reflected in different types of
audit report, written representations and the final review
and report.
l Prepare an audit report, keeping in view types of
qualifications.

Detailed Contents Weightage Level of

PART-A: OVERVIEW OF AUDITING AND ASSURANCE
1. The concept of audit
and assurance
engagements
2. External audit
3. Internal audit
in % Study Required
l Identify and describe the objective and general U
principles of audit engagement.
l Define and provide the objectives of an assurance U
engagement.
l Explain the five elements of an assurance engagement. U
l Describe the types of assurance engagement U&A
Relevant ISA: ISA 200
l Explain the statutory regulations governing the U
appointment, rights, removal and resignation of auditors
(i.e., Companies Ordinance 1984: Section # 252-260)
l Explain the regulations governing the rights and 15 U
duties of auditors (i.e., Companies Ordinance 1984:
Section 255)
l Describe the limitations of external audits. U, A & D
l Discuss the factors to be taken into account when U
assessing the need for internal audit
l Compare and contrast the role of external and U&A
internal audit.
l Discuss the scope of internal audit and the limitations of U
the internal audit function
l Discuss the nature and purpose of operational internal U&A
audit assignments
l Describe the format and content of audit review reports U, A & D
and make appropriate recommendations to
management and those charged with governance
Relevant ISA: ISA 610 (Revised)

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SYLLABUS 2016
Estd. 1951

PART-B: AUDIT PLANNING

4. Obtaining and l Discuss the requirements of professional ethics in U
accepting audit relation to the acceptance of new audit engagements
engagements l Explain the preconditions for an audit U
l Explain the process by which an auditor obtains an U&A
audit engagement
l Justify the importance of engagement letters and U
their contents
l Specific responsibilities of the auditor regarding U&A
quality control procedures
Relevant ISA: ISA 210, ISA 220
5. Audit planning and l Identify and explain the need for and importance of U
documentation planning an audit.
l Identify and describe the contents of the overall audit U&A
strategy and audit plan.
l Explain and describe the relationship between the U&A
overall audit strategy and the audit plan.
l Explain the need for, and the importance of, audit U
documentation. 20
l Describe the form and contents of working papers U&A
l Explain the procedures to ensure safe custody and U, A & D
retention of working papers
Relevant ISAs: ISA 300, ISA 230
6. Understanding the l Explain how auditors obtain an initial understanding U, A & D
entity and its of the entity and its environment.
environment l Describe and explain the nature, and purpose of, U&A
analytical procedures in planning.
l Compute and interpret key ratios used in analytical U, A & D
procedures.
l Auditor's responsibilities relating to related party U, A & D
relationships and transactions in an audit of
financial statements
Relevant ISAs: ISA 315, ISA 520, ISA 550
7. Fraud, laws and l Discuss the effect of fraud and misstatements on the U, A & D
regulations audit strategy and extent of audit work.
l Evaluation of misstatements identified during the audit U, A & D
l Discuss the responsibilities of external auditors in U&A
context of fraud and error
l Explain the auditor's responsibility to consider laws U&A
and regulations in an audit of Financial Statements
Relevant ISA: ISA 240, ISA 250, ISA 450
PART-C: INTERNAL CONTROLS
8. Assessing audit l Explain the components of audit risk U&A
risks l Explain the audit risks in the financial statements U, A & D
l Define and explain the concepts of materiality and U
performance materiality
l Explain and calculate materiality levels from financial U, A & D
information
l Audit considerations relating to an entity using a U
service organization
Relevant ISAs: ISA 315, ISA 320, ISA 402, 20
9. Internal control l Explain why an auditor needs to obtain an U&A
systems understanding of internal control relevant to the audit.
l Define internal management control U
l Importance of internal control, internal audit and risk U&A
management
l Objectives of internal control systems and how they U&A
can help prevent fraud and error
l Describe and explain the five components of internal U, A & D
control

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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
monitoring of controls
Relevant ISA: ISA 315 (Appendix)
10.The use and l Explain how auditors record internal control systems U&A
evaluation of including the use of narrative notes, flowcharts,
internal control internal control questionnaires and internal control
systems by auditors evaluation questionnaires
l Evaluate internal control components including U, A & D
deficiencies and significant deficiencies in
internal control
l Internal control system and Effectiveness of internal U&A
control systems
l Discuss the limitations of internal control components U
11. Tests of control l Describe computer systems controls including general U&A
IT controls and application controls
l Describe control objectives, control procedures, U, A & D
activities and tests of control in relation to:
The sales system
The purchases system
The payroll system
The inventory system
The cash system
Non-current assets
12.Communication l Communication with those charged with governance U
on internal control l Discuss the requirements and methods of reporting U&A
significant deficiencies in internal control which are
provided to management and those charged with
governance.
l Explain, in a format suitable for inclusion in a U&A
management letter, significant deficiencies within an
internal control system and provide recommendations
for overcoming these deficiencies to management
Relevant ISA: ISA 260, 265
PART-D: AUDIT EVIDENCE
13.Financial statement l Explain the assertions contained in the financial U, A & D
assertions and audit statements about:
evidence Classes of transactions and events
Account balances at the period end
Presentation and disclosure
l Describe the nature and timing of the audit U&A
procedures to obtain audit evidence
l Discuss the quantity and quality of audit evidence U&A
including the concept of relevance and reliability
of the audit evidence
l Audit Evidence-Specified consideration for 25 U&A
selected items
Relevant ISA: ISA 500, ISA 501
14.Audit procedures l Discuss substantive procedures for obtaining U&A
audit evidence
l Discuss and provide examples of how analytical U, A & D
procedures are used as substantive procedures
l Discuss the difference between tests of control and U&A
substantive procedures
l Describe the principles of external confirmation U&A
procedures to obtain audit evidence
l Describe the auditor's responsibilities relating to U&A
opening balances in an initial audit engagement
Relevant ISAs: ISA 520, ISA 330, ISA 505, ISA 510

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SYLLABUS 2016
Estd. 1951

15.Audit sampling and l Define audit sampling and explain the need for U&A
other means of sampling
testing l Identify and discuss the differences between U
statistical and non-statistical sampling
l Discuss the results of statistical sampling, including U&A
consideration of whether additional testing is required
Relevant ISAs: ISA 530
16.The audit of l Receivables U, A & D
specific items l Inventory U, A & D
l Payables and accruals U, A & D
l Bank and cash U, A & D
l Tangible and intangible non-current assets U, A & D
l Non-current liabilities, provisions and contingencies U, A & D
l Share capital, reserves and directors' emoluments U, A & D
Relevant ISAs: ISA 540 (Part Related to Accounting
Estimates Only)
17.The work of others l Discuss why auditors rely on the work of others U&A
l Discuss the extent to which external auditors are U&A
able to rely on the work of experts, including the work
of internal audit.
l Explain the extent to which reference to the work U&A
of others can be made in audit report.
l Special consideration-audit of group financial U&A
statements (including the work of component auditors)
Relevant ISAs: ISA 600, ISA 610, ISA 620
PART-E: REVIEW AND REPORTING
18.Subsequent events l Explain the purpose of a subsequent events review U, A & D
l Explain the responsibilities of auditors regarding U&A
subsequent events.
l Discuss the procedures to be undertaken in U&A
performing a subsequent events review
Relevant ISA: ISA 560
19.Going concern l Define and discuss the significance of the concept U, A & D
of going concern.
l Explain the respective responsibilities of auditors and U&A
management regarding going concern
l Identify and explain potential indicators that an entity U&A
is not a going concern. 20
l Discuss the procedures to be applied in performing U, A & D
going concern reviews.
l Discuss the reporting implications of the findings of U, A & D
going concern reviews
Relevant ISA: ISA 570
20.Written l Explain the purpose of and procedure for obtaining U
representations written representations.
l Discuss the quality and reliability of written U
representations as audit evidence
l Discuss the circumstances where written ,A&D
representations are necessary and the matters on
which representations are commonly obtained. U
Relevant ISA: ISA 580
21.Audit finalization l Describe procedures an auditor should perform in U
and audit reports conducting overall review of financial statements
l Identify and describe the basic elements of an U&A
unmodified auditor's report
l Explain modified audit opinions in the audit report U&A
l Describe the format and content of emphasis of U, A & D
matter and other matter paragraphs

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SYLLABUS 2016
Estd. 1951

l Describe auditor's responsibilities relating to U, A & D

comparative information in an audit of financial
statements
l Explain the auditor's responsibilities relating to U &A
other information in documents containing audited
financial statements.
Relevant ISAs: ISA 700, ISA 705, ISA 706,
ISA 710, ISA 720
22.Review l Objectives of Review Engagements U&A
Engagements l Terms of Engagements U&A
l Procedure and Evidence U&A
l Conclusion and Reporting U&A
l Objectives of Engagements to review interim U&A
Financial Information
l Agreeing the Terms of Engagements U&A
l Procedure of a Review of Interim Financial Information U&A
l Reporting the Nature, Extent and Result of the U, A & D
Review of Interim Financial Information
l Assurance Engagement Other than Audits or U, A & D
Reviews of Historical Financial Information
o Engagements Acceptance and Continuance
o Agreeing on the Terms of the Engagements
o Planning and performing the Engagements
o Preparing the Assurance Report
l Engagements to Perform Agreed upon Procedures U, A & D
Regarding Financial Information
o Objective of an Agreed-Upon Procedure
Engagements
o Defining the Terms of the Engagement
o Procedure and Evidence
o Reporting
l Examination of prospective financial statements U, A & D
Relevant ISAs: ISRE 2400 (Revised), ISRE 2410,
ISAE 3000, ISRS 4400 and ISRS 4410
23.Related Services l Agreed upon procedures U&A
l Compilation Engagements U&A
l Assurance engagements to report on the compilation U, A & D
of proforma financial information included in
prospectus
l Services under the provision of corporate laws U& A
l Services under the provision of tax laws U&A

TOTAL WEIGHTAGE 100

NOTE:-
U = Understanding
A = Application
D = Decision

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