CSS Accounting and Auditing Auditing Syllabus

Auditing syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Auditing in CSS Accounting and Auditing, not a summary of it.

1. 1

   Fundamentals of Auditing

   4 topics

   • Definition, Objectives and Scope of Audit
   • True and Fair View and Audit Assertions
   • Reasonable Assurance and Inherent Limitations
   • Classification of Audit
2. 2

   Audit Planning and Procedures

   5 topics

   • Audit Program and Documentation
   • Audit Evidence
   • Audit Risk and Materiality
   • Tests of Control and Substantive Procedures
   • Sampling Techniques
3. 3

   Internal Control and Internal Audit

   4 topics

   • Internal Control System
   • Components of Internal Control
   • Internal Audit and Corporate Governance
   • Evaluation of Internal Control
4. 4

   Verification and Vouching

   4 topics

   • Vouching of Cash and Trading Transactions
   • Verification of Assets
   • Verification of Liabilities
   • Valuation Issues
5. 5

   Auditor: Appointment, Rights and Liabilities

   4 topics

   • Qualifications and Qualities of an Auditor
   • Appointment, Removal and Remuneration
   • Rights and Duties of an Auditor
   • Civil and Criminal Liabilities
6. 6

   Audit Report

   4 topics

   • Contents of an Audit Report
   • Types of Audit Opinion
   • Going Concern and Subsequent Events
   • Fraud and Error Reporting
7. 7

   Auditing in Computerized Environment

   3 topics

   • Computer Information Systems (EDP) Auditing
   • Computer-Assisted Audit Techniques (CAATs)
   • Controls in IT Environment

Auditing flashcards for CSS Accounting and Auditing

18 of 80 cards from the Auditing deck — real questions with worked answers.

1. Define an audit.

   An audit is the independent examination of, and expression of an opinion on, the financial statements of an entity by an appointed auditor, in compliance with statutory obligations and relevant standards, to determine whether they give a true and fair view.

2. What is the primary objective of an audit of financial statements?

   To enable the auditor to express an independent opinion on whether the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework and give a true and fair view.

3. Distinguish the primary objective of an audit from its secondary objectives.

   Primary objective: expressing an opinion on the truth and fairness of the financial statements. Secondary (incidental) objectives: detection and prevention of errors and fraud.

4. What is the 'scope' of an audit?

   The audit procedures deemed necessary in the circumstances to achieve the audit's objective, determined by the auditor having regard to applicable auditing standards, legislation, and the terms of engagement; the auditor should obtain sufficient appropriate evidence covering all material assertions.

5. What does the phrase 'true and fair view' mean?

   'True' means information is factual and conforms to reality, free from material error and prepared per the framework; 'fair' means it is unbiased, properly classified, and reflects the substance of transactions, so the statements are not misleading.

6. What are 'audit assertions' (management assertions)?

   Representations, explicit or implicit, made by management and embodied in the financial statements, which the auditor tests to obtain evidence; they concern classes of transactions, account balances, and presentation/disclosure.

7. List the assertions about classes of transactions and events for the period under audit.

   Occurrence, Completeness, Accuracy, Cut-off, and Classification.

8. List the assertions about account balances at the period end.

   Existence, Rights and obligations, Completeness, and Valuation and allocation.

9. List the assertions about presentation and disclosure.

   Occurrence and rights & obligations, Completeness, Classification and understandability, and Accuracy and valuation.

10. What is 'reasonable assurance' in an audit?

    A high, but not absolute, level of assurance obtained when the auditor has gathered sufficient appropriate audit evidence to reduce audit risk to an acceptably low level, allowing the expression of a positive opinion.

11. Why can an audit provide only reasonable, not absolute, assurance?

    Because of inherent limitations such as the use of sampling/testing rather than 100% checking, the inherent limitations of internal control, the persuasive (not conclusive) nature of most evidence, the use of judgment, and the possibility of collusion and management override of controls.

12. List the main inherent limitations of an audit.

    Use of judgment and sampling; persuasive rather than conclusive evidence; inherent limitations of internal control (collusion, management override); reliance on management representations; financial reporting involving estimates; time and cost constraints; and difficulty detecting sophisticated/concealed fraud.

13. On what main bases is audit classified?

    By organizational structure/legal requirement (statutory vs non-statutory), by conduct/timing (continuous, periodic/final, interim), by scope (complete, partial), by approach (balance sheet, transaction, risk-based), and by who performs it (internal vs external).

14. What is a statutory audit?

    An audit made compulsory by law/statute (e.g., the Companies Act for limited companies), where the appointment, rights, duties, and scope of the auditor are governed by statute and cannot be restricted by management.

15. What is a non-statutory (private) audit?

    An audit conducted not because of any legal requirement but at the discretion of the owners/management (e.g., for a sole trader, partnership, or club), where the scope and terms are fixed by mutual agreement in the engagement letter.

16. Give two key differences between statutory and non-statutory audit.

    (1) A statutory audit is legally compulsory while a non-statutory audit is voluntary. (2) In a statutory audit the auditor's scope, rights, and duties are fixed by law and cannot be curtailed, whereas in a non-statutory audit they are determined by the client's agreement.

17. Define internal audit.

    An independent appraisal/assurance and consulting activity established within an entity as a service to it, which evaluates and improves the effectiveness of risk management, control, and governance processes; it functions as part of internal control.

18. Define external audit.

    An independent examination of an entity's financial statements by an auditor appointed from outside the organization, who reports to the shareholders/members on whether the statements give a true and fair view.

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