LEARNER GUIDE 2017
FACULTY OF ACCOUNTING AND INFORMATICS
DEPARTMENT OF AUDITING AND TAXATION
QUALIFICATION: BACHELOR OF TECHNOLOGY – INTERNAL AUDITING BT IAU 2
INTERNAL AUDITING 4 (IAUD 401) Module 1: IAUD 411 And Module 2: IAUD 421 REVISED JANUARY 2017 REVISED BY: MR A SEETHARAM
CONTENTS DEPARTMENTAL INFORMATION WELCOME AND INTRODUCTION INTRODUCTION TO THE SUBJECT LEARNING OUTCOMES AND ASSESSMENT CRITERIA LEARNING AND TEACHING STRATEGIES COPYRIGHT AND PLAGIARISM STUDENT SUPPORT WORK INTEGRATED LEARNING, INDUSTRY, COMMUNITY AND OCCUPATION-RELATED INFORMATION QUALITY ASSURANCE AND ENHANCEMENT TEST DATES MODULE 1 - CORE SYLLABUS MODULE 1 – SCHEME OF WORK MODULE 2 – CORE SYLLABUS MODULE 2 – SCHEME OF WORK ATTACHMENTS CAREER PATH
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DEPARTMENTAL INFORMATION DEPARTMENT
: Auditing and Taxation (Ritson Campus)
LECTURER
: Mr A Seetharam CA(SA); FIIASA, CIA Telephone: (031) 373 6753 Email:
[email protected]
HEAD OF DEPARTMENT
: Mr D Reddy CA(SA) Telephone: (031) 373 6781 Email:
[email protected]
DEPARTMENT SECRETARY
: Mrs Phumzile Khumalo Room R4-227 Telephone: (031) 373 5610 Fax: (031) 373 5601 Email:
[email protected]
LECTURES
: 3 periods per week
TUTORIAL SESSIONS
: 1 period per week
STUDENT CONSULTATION
: To be confirmed.
LECTURE VENUE
: To be confirmed.
TUTORIAL VENUE
: To be confirmed.
DURATION OF COURSE Module 1 – IAUD411
: Semester 1 (21 weeks)
Module 2 – IAUD421
: Semester 2 (19 weeks)
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DEPARTMENT OF AUDITING AND TAXATION 1. Welcome and Introduction 1.1 Dear Student The Department of Auditing and Taxation welcomes you as a student in Internal Auditing 4 (Module 1 and 2). Read the information in this learner guide and make sure you have it at hand at all times, since you will frequently need to refer to it during the year. 1.2 The learner guide assists the students with: Subject content to be covered, Preparing for lectures, Self-study, and Learning outcomes, assessment criteria and assessment strategies.
2. Introduction to the subject 2.1 The course covers an integrated and practical approach of the entire audit process which entails the planning, executing and finalisation of audits. It also covers governance, risk management, and controls. The course requires of students to integrate their knowledge, gained from the current and prior years, from Financial Accounting, Cost and Management Accounting, Taxation and Company Law. 2.2 Pre-Requisites
The pre-requisites for this course are: Internal Auditing 3 (Module 1 and Module 2). In addition, a thorough knowledge of the audit process, business processes, risks and controls (e.g.: The Revenue and Receipts process, risks and controls) studied in prior years is essential for this course.
The following is expected of students in addition to formal lectures: Obtain an overview of specific lecture content prior to each lecture. Prior reading of the specific lecture content before attending each lecture. Participation in lecture discussions. Apply critical thinking with regard to problem solving. Integrate knowledge of other subjects covered in your programme. Tutorials are compulsory and must be completed before the tutorial sessions.
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2.3
Recognition of Prior Learning (RPL) None.
3.
Learning Outcome and Assessment Criteria
To provide students with a holistic view of the subject matter and to apply it in an integrated and practical manner. To provide students with a degree of responsibility and autonomy in the application of the fundamental concepts.
3.1
Specific Outcomes
After having completed this course, the student should have an understanding of and be able to: Use the audit process to perform an audit from start to end for assurance and consulting engagements. Evaluate and improve on risk management, control and governance processes. Identify, categorise and communicate audit findings.
3.2
Assessment Criteria
4. 4.1
This specifies the evidence and the qualities of the performance which must be demonstrated to achieve an outcome. Simply stated, they are the standards and activities by which students can prove that they have achieved a specific outcome at the end of a learning period. For this course, the method of assessments is: o Tests and o Exams.
Learning and Teaching Strategies Lectures and Tutorials
Formal lectures are an essential component of this course. Therefore, attendance at lectures is important. Students will be given tutorials and the suggested solutions in advance, i.e.: prior to the related topics being covered at lectures in class. Students are expected to attempt the tutorials prior to attending the tutorial class. Tutorials provide a student with an opportunity to share views and discuss problems with the lecturer and fellow students.
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Student participation is of utmost importance to obtain maximum benefit of tutorials.
Tutorials are compulsory and the following process must be followed by students in order to ensure success in this course: The text book material together with the lecture content must be studied in detail prior to attempting the tutorials. Tutorial questions must be answered under exam conditions prior to the tutorial sessions. The answers should be marked using the suggested solutions and further learning should take place from shortcomings identified. Problematic areas must be highlighted by students and brought to the attention of the lecturer during the tutorial session. Students would now be prepared for the tutorial sessions. The tutorial sessions would be used to discuss problematic areas that were identified by students. Note that, the tutorial sessions are not for students to do tutorials in the class, neither is it for the lecturer explain the entire tutorial without any attempts made by students. Tutorials must be done by students in their own time prior to each tutorial session.
The above strategy for success is based on the following quote: “Mistakes increases your experience, and experiences decreases your mistakes.” “If you learn from your mistakes, then others learn from your success!” Author unknown. 4.2
Graduate Attributes To provide students with sufficient knowledge to apply in the work place.
4.3
Assessment Criteria
The final mark is calculated as follows: - Examination mark - Course mark (DP) - Final mark
60% 40% 100%
The examination consists of one, three-hour paper which shall constitute 60% of the final mark. Two tests will be written, and an average mark of the two tests will count as a course mark for DP purposes. It must be noted that these tests are compulsory. To be admitted to the examination, the student must earn a course mark of at least 40%.
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Students must obtain a combined course and examination mark of not less than 50% to pass the subject. A student fails if he/she does not achieve the sub-minimum of 40% for the examination paper, despite the fact that the combined mark is 50% or more. Apologies for not writing tests will only be accepted by the submission of either an original medical certificate or a letter from the student’s employer (for work commitments) within 48 hours of the test being written. Only in these circumstances the student will be given an opportunity to write an Aegrotat test which will serve as a replacement test mark for either test 1 or test 2 mentioned above. The course mark is calculated in the same manner mentioned above. It must be noted that, if a student is unable to write test 1 and test 2 mentioned above, only one Aegrotat test will be written. This will only represent one test mark of the two compulsory tests referred to above. Therefore, the other test will count as a zero mark for the calculation of the average course mark for DP purposes. Students will receive feedback on their performance of tests and a post mortem of each test will be conducted, so that students are able to identify their shortcomings and take corrective action going forward. Refer to the “At risk students” section below for more detail.
Note: It must be noted that the success of a student will be determined by how well he or she applies the theoretical knowledge in an integrated and practical manner. It is therefore important to apply a holistic and practical view when studying this course. 5.
Copyright and Plagiarism
Plagiarism is defined as copying the work or material developed by another and presenting the same as your own. Plagiarism will not be accepted under any circumstances. 6. Student Support 6.1 At Lectures: Lectures will be interactive were time will be allocated for students to ask questions on material discussed. 6.2 Consultation Times: Students can also consult with the lecturer during consultation times which would be confirmed when lectures commence. The purpose of consultation sessions is to assist students with any queries that they may have. Students must adhere to consultation INTERNAL AUDITING 4 – 2017
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times, unless prior arrangements are made with the lecturer to meet outside of the consultation times. 6.3 At Risk Students: At risk students are defined as students that may not pass their assessments which may result in not passing the course. These students are identified and communicated to. Students are requested to identify improvement areas/ plans for further assessments. They are also requested to discuss their improvement plans with the lecturer for further advice on improving their future assessments.
7.
Work Integrated Learning (WIL), Industry, Community, and Occupation-related Information.
The programme does not have a Work Integrated Learning component. The Department, however, engages and invites potential employers within the field of Internal Auditing to conduct recruitment drives on campus. However, the department does not guarantee students employment from these initiatives. Further, students are advised to liaise with the Co-operative Education Department, during the course of their study, to source potential employers. Internal Auditing is taking an increasing importance in commerce and industry due to large corporate failures, fraud, etc. The King IV report on Corporate Governance has emphasized the importance of the role of Internal Auditing in an organization with a view to ensuring a transparent, fair and ethical conduct by companies. This has resulted in tremendous opportunities for students in the field of Internal Auditing. Refer to the attached career path information in the field of internal auditing. An important professional body to contact for further information on this discipline is the Institute of Internal Auditors (IIA).
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8.
Quality Assurance and Enhancement
Constructive student feedback is essential for quality assurance and enhancement. Student feedback will be elicited as follows: Student discussions, Student representative’s feedback to lecturer and HOD, and Student surveys entailing an evaluation of the subject and the lecturer are conducted. Where applicable, feedback would be provided during lectures.
9.
Test Dates Modules Module 1 Module 2
Test week 1 3 – 10 March 2017 18 – 25 August 2017
Test week 2 21 – 28 April 2017 2 – 9 October 2017
Note: The contents in this learner guide may be subject to change. Should there be any changes these will be communicated during lectures.
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INTERNAL AUDITING 4 – MODULE 1 (IAUD 411) APPENDIX 1 Learning outcomes
Assessment criteria
Exit level outcomes Unit 1a — Internal Audit Management Specific outcomes a) Understand and apply the responsibilities in terms of (Element la.1) the Standards for the Professional Practice of Internal Establish an Internal Auditing. Audit Department. b) Prepare a Functions and Responsibility Statement according to the Standards for the Professional Practice of Internal Auditing. c) Prepare Job Descriptions for all levels of internal auditors (Chief Audit Executive, Senior Audit Manager, Audit Manager, Senior auditor, auditor, junior auditor) according to the Standards for the Professional Practice of Internal Auditing. d) Develop audit manuals for the conduct of internal audit assignments according to the Standards for the Professional Practice of Internal Auditing. e) Establish a marketing plan for the Internal Audit Activity. f) Understand and apply the principles and concepts underlying the Outsourcing of internal audit. g) Establish a Quality Assurance Plan for the internal audit activity according to the Standards for the Professional Practice of Internal Auditing. h) Establish a policy document for the recruitment an appointment of internal audit personnel. i) Establish a policy document for the professional development of internal audit staff according to the Standards for the Professional Practice of Internal Auditing. j) Establish short, medium and long term planning schedules for the internal audit activity according to the Standards for the Professional Practice of internal Auditing k) Apply basic personnel management skills
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Assessment Methods 2 x 90 minute tests, and 1 x 3 hour written examination
LEARNER GUIDE
INTERNAL AUDITING 4 – MODULE 1 (IAUD 411) Learning outcomes
Assessment criteria
Assessment Methods
Specific outcomes a) Establish/ Prepare project budgets according to the (Element 1 a.2) Standards for the Professional Practice of Internal Apply management Auditing. principles to the ) Establish/ Prepare project schedules according to the management and Standards for the Professional Practice of Internal controlling of Internal Auditing. Audit c) Prepare progress reports of audit projects according to assignments/projects. the Standards for the Professional of Internal Auditing: d) Understand and apply basic supervisory activities in all phases of internal audit work: Engagement planning (2200) Performing the engagement (2300) Communicating results (2400) Monitoring progress (2500) Resolution of managements’ acceptance of risks (2600) Exit level outcomes Unit lb — Specialist Audit Assignments Specific/outcomes a) Understand and apply the definition of fraud (Element 1b.1) b) Advise on and explain why fraud happens Perform and manage fraud c) Advise on and understand who is responsible for / forensic audits. detecting and deterring fraud d) Advise on and establish a Corporate Fraud Policy e) Understand and apply the principles and the methodology in detecting fraud f) Determine the exposures risks of the business to fraud in all relevant functional areas: Sales & Debtors Purchasing & Creditors Inventory Payroll Long-term and short-term assets and liabilities. g) Understand and advise on the symptoms of fraud h) Investigate and report instances of fraud Specific outcomes a) Understand, apply and manage the principles and (Element lb.2) concepts of Government audits in line with the Perform and manage Standards for the Professional Practice of Internal audits of Government and Auditing. Non-profit Organizations b) Understand, apply and manage the principles and concepts of the audit of Non Profit Organizations in line with the Standards for the Professional Practice of Internal Auditing.
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INTERNAL AUDITING 4 – MODULE 1 (IAUD 411)
Learning outcomes
Assessment criteria
Assessment Methods
Specific outcomes a) Understand and manage the principles and concepts (Element lb.3) of specific performance measures and frameworks in Perform and manage line with the Standards for the Professional Practice audits of Performance of Internal Auditing. Measures and related frameworks. Specific outcomes a) Understand and apply the principles and concepts of (Element lb.4) Environmental Auditing in line with the Standards for Perform and manage the Professional Practice of Internal Auditing. Environmental Audits. Specific outcomes a) Understand and mange the principles and concepts of (Element 1 b.5) Treasury Audits in line with the Standards for the Perform and manage Professional Practice of Internal Auditing. Treasury Audits. Specific outcomes a) Understand and apply the principles and concepts of (Element 1b.6) Value for Money audits (Operational Audits) in line Perform and manage with the Standards for the Professional Practice of Value for Money audits Internal Auditing. (Operational Audits)
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INTERNAL AUDITING 4 – MODULE 1 (IAUD 411)
Scheme of Work Sections Establish an Internal Audit Department / Activity
Outcome Element 1a.1
Reference ISPPIA 1000, 1100, 1200, 1300, 2000, 2100 King Report on Corporate Governance
Text Reference Chapter 1, 2, 9
Management and Controlling of Internal Audit Assignment/ Projects
Element 1a.2
ISPPIA 2200, 2300. 2400, 2500, 2600
Chapter 2, 10, 11, 12
Perform and manage value for money audits (Operational Auditing) Perform and manage Treasury Audits
Element 1b.6
Notes from IA3
Element 1b.2, 5
Public Finance and Management Act (PFMA), 1999.
Specialist audit assignments Fraud and Forensic Auditing Perform and manage Audits and Performance Measures and related frameworks
Element 1b.1 Element 1b.3
Chapter 8
Prescribed Reading: The following book is compulsory for this course: Internal Auditing: Assurance and Advisory Services – 3 rd edition, By Reding, Sobel, Anderson, Head, Ramamoorti, Salamasick, and Riddle. Recommended Reading: Internal Auditing:An Introduction–4 th Edition, P Coetzee, R du Bruyn, H Fourie, K Plant. Performing Internal Audit Engagements – 4 th Edition, P Coetzee, R du Bruyn, H Fourie, K Plant. Advanced Internal Audit Topics – 4 th Edition, P Coetzee, R du Bruyn, H Fourie, K Plant.
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INTERNAL AUDITING 4 – MODULE 2 (IAUD421) APPENDIX 2 Learning outcomes
Assessment criteria
Assessment methods
Unit 1c Corporate Governance, Risk Management, Internal Control and Internal Control evaluation Specific outcomes for a) The concepts and principles relevant to assessing unit 1c.1 governance are explained and applied in accordance Describe, apply and. with the principles set out in the King Report on advice on the objectives, Corporate Governance. nature and evaluation of b) The concepts and principles relevant to risk Risk Management, management are explained and applied in line with Governance and Internal the Standards for the Professional Practice of Internal Control. Audit c) The concepts and principles relevant to assessing risk are explained and applied in accordance with the Practice of Internal Audit and the principles set out in the King Report on Corporate Governance d) The concepts and principles relevant to a risk based audit approach are explained and applied in accordance with Internal Auditing practice e) The concepts and principles relevant to the communication of risks to management and/or the audit committee are explained and applied in accordance with the requirements of the King Report on Corporate Governance Specific outcomes for a) The concepts and principles relevant to internal unit Ic.2 control are explained in the Standards for the Provide information and Professional Practice of Internal Audit. advice on the objectives, b) The concepts and principles relevant to evaluating a nature and evaluation of system of internal control are assessed in accordance internal control. with Internal Audit Practice (Including the use of Risk Models, Control Self Assessments). c) The principles relevant to the test of controls are assessed in accordance with Internal Audit Practice d) The concepts and principles relevant to specific control problems relating to Information Systems environments are assessed in accordance with Internal Audit Practice. e) The concepts and principles relevant to the
2 x 90 minute tests, and 1 x 3 hour written examination
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communication of weaknesses in the internal control system to management and/or the Audit Committee.
Learning outcomes Unit Id Internal Audit Reporting Specific outcomes for unit 1d.1 Describe, apply and manage the process of reporting audit findings.
Assessment criteria
Assessment methods
a) The concepts and principles relevant to the internal audit report are explained, applied and managed in line with the Standards for the Professional Practice of Internal Audit. b) The concepts and principles relevant to due diligence reviews are explained and applied in line with the Standards for the Professional Practice of Internal Audit.
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INTERNAL AUDITING 4 – MODULE 2 (IAUD421)
Scheme of work Sections Corporate Governance, Risk Management, Internal Control and Internal Control Evaluation in manual and automated systems.
The audit process of gathering and evaluating evidence for assurance and consulting audit engagements. Companies Act Process of Reporting Audit Findings
Outcome Unit 1c.1
Unit 1c.1
Unit 1c.1 Unit 1c.2, 1d.1
Reference ISPPIA 2010, 2100, 2110, 2120, 2130, 2200
Text Reference
King Report on Corporate Governance
Chapter 3
COSO & Risk Based Audit Approach
Chapter 4
Business processes & IT – risks & controls. ISPPIA 1000, 2200, 2300,
Chapter 5, 7
Companies Act, 2008 ISPPIA 2300, 2400, 2500, 2600
Chapter 13, 15
Chapter 14
Prescribed Reading: The following book is compulsory for this course: Internal Auditing: Assurance and Advisory Services – 3 rd edition, By Reding, Sobel, Anderson, Head, Ramamoorti, Salamasick, and Riddle. Recommended Reading: Internal Auditing: An Introduction – 4 th Edition, P Coetzee, R du Bruyn, H Fourie, K Plant. Performing Internal Audit Engagements – 4 th Edition, P Coetzee, R du Bruyn, H Fourie, K Plant. Advanced Internal Audit Topics – 4 th Edition, P Coetzee, R du Bruyn, H Fourie, K Plant.
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