ETİCDA THE WHEEL OF GOVERNANCE

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ETİCDA THE WHEEL OF GOVERNANCE ETİCPA THE WHEEL OF GOVERNANCE Accounting Technician Qualification for Ethiopia

ASSURANCE, CONTROL & ETHICS

MODULE SEVEN

Textbook

Introduction

Using the Question Bank

Syllabus

ISC Level Five

Main competency areas

Detailed syllabus and learning outcomes

Introduction

Learning Outcomes

Learning Outcome

Exam awareness

One. What is assurance?

One point one. Types of assurance engagements

One point one point one.

Audit engagement letter.

The objective and scope of the audit.

The responsibilities of the auditor.

Example one.

The responsibilities of management.

Fee arrangements, billing and other information as required.

Types of organisation requiring audit or assurance.

Introduction.

Definition: Reasonable Assurance.

Levels of assurance.

Reasonable assurance.

Example two.

Independent auditor's report.

Basis for opinion.

Responsibilities of management for the financial statements.

Example two.

Two point two.

Signature of the auditor or audit firm

Limited assurance

Title of the report

Introduction

Three point two.

Agency and stewardship

Accountability

Three point three. The users of assurance reports

Three point four. Benefits of assurance reports

Three point five. Limitations of assurance reports

Financial Reporting:

Audit procedures:

Timeliness, benefits and costs:

Introduction

Definition: PROFESSIONAL SCEPTICISM

Professional scepticism and professional judgement

Professional scepticism

Four point two.

Five. Materiality and the 'expectations gap'

Five point one.

Professional judgement

Materiality

Five point two.

Example three.

Performance materiality

'Expectations gap'

Self-test questions

Chapter Summary

CHAPTER TWO

Introduction.

Learning Outcomes.

Exam awareness.

Introduction.

Internal control and risk.

The system of internal control has five components:

One point one.

Inherent risk.

One point two. Control risk

Detection risk

Introduction

Types of internal control

Internal controls by function

Two point two.

Internal controls by type

Two point three.

Two point four.

'SOAPSPAM'

Introduction

Definition: ASSERTIONS

Controls for specific items in the financial statements

Financial statement assertions

Three point three. Assertions about account balances, and related disclosures, at the period end

Three point four. Revenue (sales)

Control

Three point five.

Three point six.

Three point seven.

Inventory

Three point eight.

Three point nine.

Internal controls over public sector expenditure

Introduction

IT controls

General IT controls

Four point two. Application controls

Introduction

Definition: INTERNAL AUDIT

Internal audit in the private sector

Five point two. Internal audit in the public sector

Five point three.

What are the requirements for internal audit in your country?

Five point four. Using the work of internal audit

Five point five. Provision of internal audit services.

Five point five point one.

Internally within the organisation (in-house).

Advantages.

Outsourced.

Advantages.

Disadvantages.

Five point five point three.

Self-test questions.

You should now attempt the following questions in the Question Bank:

Sales order.

Invoice.

Goods received note.

CHAPTER THREE.

Introduction.

Learning Outcomes

Exam awareness

One. Recording systems of internal controls

One point one. Narrative notes

Purchases system notes

One point two. Flowcharts or diagrams

Checklists and questionnaires

Purchases system checklist

Purchases system questionnaire

Below is a summary of the advantages and disadvantages of each method.

Disadvantages

Two. Testing controls

Two point one.

Walk through test

Tests of controls

Let's look at these procedures in more detail.

Example four. Tests of controls

Inspection

Observation

Reperformance

Inquiry

Practice question one

Two point three.

Substantive tests

Example five. Substantive tests

Two point five.

CAATs and data analytics

Audit software

Examples

Test data

Example six.

Introduction

Advantages

Reporting deficiencies in internal control

Three point one. Deficiencies in internal control

Three point two. Reporting deficiencies in internal control

Three point three.

Practice question two

Four

Four point one.

The accounting function

External reporting includes:

Four point two. Accounting systems

Accounting systems are designed to produce information from:

The design of the accounting system is determined by:

A good accounting system should have the following attributes:

Changes to the accounting system

Four point four.

Cost/benefit analysis

Tangible costs are those that can be quantified in monetary terms:

Making the changes

Practice question four

What are the main disadvantages of using CAATs in an audit?

What type of control would the auditor be able to observe?

Are there any limitations to evidence obtained in this way?

Answer to Practice Question two

Answer to Practice Question Three

Answer to Practice Question Four

CHAPTER FOUR

Introduction

Learning Outcomes

Learning Outcome

Exam awareness

Fraud and error

Fraud

Error

Now consider the following illustration.

Answer to Illustration One

Introduction

Two point one point one. Management override

Fraudulent financial reporting

Two point two.

Misappropriation of assets

Materiality

Two point three. Fraud in the public sector

Introduction

Risk factors: Fraudulent financial reporting

Three point two.

Opportunities for committing fraud:

Attitudes/rationalisations that might encourage fraud:

Risk factors: Misappropriation of assets

Introduction

Inadequate internal controls, for example:

Attitudes/rationalisations:

Implications of fraud

Four point two. Implications for the person committing the fraud

Self-study one.

Implications for the auditor

Introduction

Practice question one

Introduction

Responsibilities of auditors and management

Definition: MANAGEMENT

Six point two.

Responsibilities of management

Responsibilities of the auditor

Seven. Money laundering

Seven point one.

Seven point two.

The consequences of money laundering

Examples of money laundering as fraud

Seven point three. Responsibilities of the professional accountant

Introduction

Codes of ethics and their importance

Learning Outcomes

Introduction

Exam awareness

Ethical Codes and Fundamental Principles

Regulatory bodies and ethical codes

One point two. IESBA code: fundamental principles

Integrity

Objectivity

Professional competence and due care

One point two point four.

One point two point five.

Confidentiality

Professional behaviour

Practice question one

Introduction

Two point two.

The importance of independence

Demonstrating independence

Three Threats and safeguards

Three point one. Reasonable and informed third party

Self-interest threat

Three point three.

Self-review threat

Three point four.

Advocacy threat

Three point five. Familiarity threat

Intimidation threat

Three point seven point one.

Safeguards

Four point one. The importance of confidentiality

Four point two. Safeguarding confidentiality

Four point three. Disclosure of confidential information

Four point four.

Introduction

Five point two.

Conflicts of interest

Unethical behaviour and consequences

Implications for the entity

Implications for the professional accountancy firm

Five point three. Implications for the individual

Whistleblowing and 'speaking out'

CHAPTER SIX

Introduction

Learning Outcomes

Exam awareness

Introduction to corporate governance

One point one.

One point two.

The development of corporate governance in Africa

Self-study one.

Corporate governance in the public sector

Governing bodies' structures and reporting arrangements

One point three point two.

Introduction

Corporate governance codes

OECD

Two point two. King Reports (South Africa)

Good performance

Two point three. UK Corporate Governance Code

Introduction

Defining roles and responsibilities for corporate governance

Those charged with governance (TCWG)

Three point one point one.

Board committees

Three point one point two.

Introduction

The role of management of the entity

Corporate social responsibility and environmental social governance

Four point one.

Four point two.

Environmental social governance

Four point three. Assurance of CSR and sustainability reports

Self-study three.

Self-test questions

One. What is corporate governance?

The four outcomes of the King Report are:

Introduction

In this chapter we will learn about

Stakeholders and regulation of the public sector

Learning Outcomes

Exam awareness

Introduction

Public sector organisations

What is the public sector?

One point two. Differences between the public and private sectors

Public sector stakeholders

Who are public sector stakeholders?

Introduction

Assurance and reporting in the public sector

The three parties in public sector assurance

Three point two. Appointment of public sector auditors

Three point three. Wider responsibilities in public sector audit

Types of public sector auditing

Three point four point one. Financial statement audits

Compliance audits

Three point four point three. Performance audits

Three point four point four. Performance information audits

Three point four point five.

Four

Value for money

Four point one.

Introduction

Definition: GOVERNANCE

Five point one. Internal controls in the public sector

Two. Security:

Five point three. Principles of public life

The seven general principles are:

International Standards for Supreme Audit Institutions

Definition: SUPREME AUDIT INSTITUTIONS

Six point two.

INTOSAI

ISSAIs

Self-test questions

Chapter summary

Answers to practice questions

One. Timeliness:

Answers to self-test questions

Chapter Two. Internal controls

Chapter Four. Fraud

Chapter Five. Ethics for the professional accountant

Chapter Six. Corporate governance and corporate social responsibility

Chapter Seven. Public sector assurance

Overview

This document provides a comprehensive textbook on Assurance, Controls, and Ethics, tailored for the Accounting Technician Qualification in Ethiopia. It covers key topics such as internal controls, fraud prevention, and the importance of ethics in the accounting profession.

Key Points

1The textbook is designed for students pursuing the Accounting Technician Qualification for Ethiopia
2It covers important concepts such as assurance, internal controls, and professional ethics in accounting
3Each chapter includes summaries, practice questions, and self-test questions to reinforce learning
4Emphasis is placed on the differences between public and private sector assurance practices
5Corporate governance and social responsibility are key topics addressed in the syllabus.

Details

Category: Education

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