Course Overview

Here’s a detailed course description for Advanced Auditing I (Audit Planning & Risk Assessment) – usually offered in Year 3, Semester 5 of a BBA in Auditing:

Advanced Auditing I (Audit Planning & Risk Assessment)

Course Code: BBA-AUD 350
Credit Hours: 3
Semester Offered: Year 3 – Semester 5

Course Description

This course builds on the foundation of Principles of Auditing and Intermediate Auditing by focusing on the audit planning process and risk assessment. It emphasizes the auditor’s responsibility to identify and assess risks of material misstatement, design audit strategies, and apply professional judgment in developing audit programs. Students will gain practical skills in evaluating internal controls, determining materiality, and preparing audit plans in line with International Standards on Auditing (ISA).

Course Objectives

By the end of the course, students should be able to:

1. Understand the purpose and process of audit planning.

2. Apply concepts of audit risk, inherent risk, control risk, and detection risk.

3. Evaluate an entity’s internal controls and their impact on audit planning.

4. Determine materiality and performance materiality for audit engagements.

5. Develop an effective audit strategy and audit program.

6. Apply professional judgment in identifying and responding to risks.

Learning Outcomes

On successful completion, students will be able to:

• Prepare comprehensive audit plans and strategies.

• Identify areas of high risk in financial statements and operations.

• Apply analytical procedures and risk assessment techniques.

• Integrate internal control evaluation into audit planning.

• Demonstrate knowledge of ISA 315 (Identifying and Assessing Risks of Material Misstatement) and ISA 330 (Responses to Assessed Risks).

Key Topics

1. Introduction to Advanced Auditing

   • Recap of basic auditing principles

   • The role of planning in audit effectiveness

2. Audit Risk Framework

   • Inherent risk, control risk, and detection risk

   • The audit risk model

   • Assessing risks of material misstatement

3. Audit Planning

   • Objectives and stages of planning

   • Understanding the client’s business and industry

   • Preliminary engagement activities

4. Materiality in Auditing

   • Definition and importance

   • Determining materiality levels

   • Relationship between materiality and audit risk

5. Internal Control Evaluation

   • Components of internal control (COSO framework)

   • Assessing design and implementation of controls

   • Tests of control vs. substantive procedures

6. Analytical Procedures

   • Role in planning and risk assessment

   • Ratio analysis and trend analysis

   • Identifying unusual or unexpected variances

7. Audit Strategy & Program

   • Designing audit approaches (substantive vs. controls-based)

   • Developing audit programs tailored to risks

   • Documentation and audit working papers

8. Professional Judgment & Ethics in Risk Assessment

   • Auditor independence and objectivity

   • Ethical issues in audit planning

   • Real-world cases of audit failures linked to poor risk assessment

Teaching Methods

• Lectures and seminar discussions

• Case studies on audit planning failures (e.g., Enron, WorldCom)

• Practical workshops on risk assessment techniques

• Group projects developing audit plans for sample companies

Assessment Methods

• Case Study Assignments (20%)

• Midterm Examination (20%)

• Group Project (Audit Plan Preparation) (10%)

• Final Examination (50%)

???? Recommended Textbooks & References

1. Arens, A. A., Elder, R. J., & Beasley, M. S. – Auditing and Assurance Services: An Integrated Approach

2. Hayes, R., Wallage, P., & Gortemaker, H. – Principles of Auditing: An International Perspective

3. International Standards on Auditing (ISA 200–330) – IFAC/IAASB