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MIAnew-QE - Guidelines & Syllabus

Guidelines & Syllabus

Part 1 - Examination Guidelines

Part 2 - Examination Syllabus

Syllabus Outline

Syllabus Content Specification

Examinable Material

Business and Company Law

Auditing and Assurance Services

Taxation

Advanced Financial Accounting and Reporting

AUDITING AND ASSURANCE SERVICES

OBJECTIVE
To equip candidates with knowledge and understanding of the audit process when performing the audit of financial statements including consideration of other issues relating to provisions of audit-related and assurance services.

INTRODUCTION
This course is designed to enable the candidates to understand the nature and objectives of audit in general as well as audit procedures and techniques practiced today. It would also help the candidates to be able to identify and assess the audit risks involved in various situations.

Candidates are expected to apply their knowledge of the subject matters covered in this course as well as related courses like Financial Accounting and Company Law and Practice in resolving issues relating to audit of financial statements and other audit related and assurance services.

Candidates are also expected to have a through knowledge of all auditing standards, guidelines and technical releases pronounced by MIA.

LEARNING OUTCOMES
Upon successfully completing the examination, candidates at the minimum should be able to:

●	Understand the nature, purpose, scope and issues relating to auditing and provisions of audit-related and assurance services.
●	Explain the current audit environment affecting the auditor’s ethical behavior and appreciate the issues associated with auditor independence
●	Explain the auditor’s responsibilities and legal liabilities in the context of audit of financial statements.
●	Identify risks and describe the procedures used in the planning process, to eliminate or minimize these risks.
●	Demonstrate the use of auditing skills including appraisal and criticism of internal control systems and report findings.
●	Identify and apply techniques employed in the various stages of the audit process and evaluate findings.
●	Justify and prepare appropriate reports for both internal and external users.
●	Be aware of current issues in auditing and provisions of audit-related and assurance services.
●	Explain the purpose of internal audit and its role in risk assessment and management
●	Understand auditing in a computerized information system (CIS) environment and use of Computer Assisted Audit Techniques (CAATs) as an audit tool.

SYLLABUS WEIGHTAGE

Syllabus Content Area	Weighting
An Introduction to Auditing and Assurance Engagements, An Overview of Financial Statement Auditing, Professional Conducts & Ethics	10%
Initial Engagement and Audit Planning, Internal Control, Control Assessment and Compliance Testing, Computer Information Systems (CIS) Audit	20%
Audit Evidence and Procedures, Audit Sampling	10%
Auditing the Revenue Cycle, Expenditure Cycle including Payroll Cycle, Production cycle, Property Plant & Equipment, Long Term Liabilities, Shareholders Equity and Income Statement items, Cash & Investment	25%
Completing the Engagement, Auditor’s Report, Internal Audit and Operations, Auditors’ Responsibility and Legal Liabilities	20%
Non Audit Engagements and Assurance Services	15%
Total	100%

EXAMINATION FORMAT
A 3-hour written paper comprising 5 to 6 compulsory questions.

SYLLABUS CONTENT

CONTENT

LEVEL OF KNOWLEDGE

An Introduction to Auditing and Assurance Engagements
-	Audit profession and regulatory environment in Malaysia
-	Overview of assurance services and non-audit engagements
-	Quality control for audit work

An Overview of Financial Statement Auditing
-	Introduction to Malaysian Accounting and Auditing Standards
-	Management assertions and audit objectives
-	Fundamental concepts in audit
-	Overview of audit process

Professional Conduct & Ethics
-	Ethical framework
-	MIA By-Laws ( On Professional Conduct & Ethics )

Initial Engagement and Audit Planning
-	Establishing terms of engagement (Engagement letter)
-	Understanding the client’s business and accounting system
-	Planning activities
-	Types of audit tests
-	Analytical procedures
-	Planning and preliminary analytical procedures
-	Concept of reasonable assurance
-	Materiality
-	Audit risk
-	Working paper

Internal Control, Control Risks Assessment and Tests of Controls
-	Definition of internal control
-	The need for internal control in audit planning
-	Timing of audit procedures
-	Types of control

Computer Information Systems (CIS) Audit

Matters that CIS environment can effect the audit

Internal control in a CIS environment

General and Application CIS Controls

Auditors’ consideration on internal control

Audit using Computer-Assisted Application Techniques (CAATs)

●	Nature and types of CAATs
●	Consideration on using CAATs
●	Common auditing software and test of data
●	Audit on general and application controls

Audit Evidence and Procedures
-	Management assertions
-	Audit objectives
-	Audit procedures
-	Basic concepts of audit evidence
-	Relationship of procedures to audit objectives

Audit Sampling
-	Requirements of ISA 530
-	Sampling techniques for tests of controls and substantive testing

Auditing the revenue cycle
-	Revenue recognition and cycle, audit objectives
-	Reliance on the internal controls
-	Audit revenue – Analytical procedure (AP) & Substantive test (ST)
-	Audit accounts receivable– AP & ST
-	Audit other receivable, deposits and prepayments – AP & ST

Auditing the purchase cycle and expenditure cycle
-	Purchase recognition and cycle, audit objectives
-	Reliance on the internal controls
-	Audit purchase– AP & ST
-	Audit accounts payable – AP & ST
-	Audit other payable, accruals and provision – AP & ST
-	Audit payroll – AP & ST

Auditing the production cycle
-	Overview of production cycle, audit objectives
-	Reliance on the internal controls
-	Inventory – AP & ST
-	Stock count observation

Auditing Property Plant and Equipment
-	PPE cycle, audit objectives
-	Reliance on the internal controls
-	Audit PPE – AP & ST

Auditing Long Term liabilities, Shareholders equity and income statement items
-	Long Term liabilities
-	Share capital
-	Dividends
-	Income Statement – below the GP line

Auditing cash and investment
-	Audit cash and bank balances – AP & ST
-	Audit investment – AP & ST

Completing the engagement
-	Contingent liability
-	Commitment
-	Subsequent events
-	Final analytical procedures
-	Going concern

External Audit report – Group and companies
-	Format and content of Unqualified and Modified external audit report on financial statements.

Internal audit and operations
-	The development of internal audit
-	Objectives, scope and responsibility of internal audit
-	Similarity and difference between internal and external audit
-	Concept of operational audit
-	Objectives and scope
-	Criteria identification on performance appraisal
-	Role of internal audit in risk assessments and management

Auditors’ Responsibilities and Legal Liabilities
-	Fraud and error
-	Responsibility to comply with rules and regulations
-	Responsibility and legal liability under the Companies Act
-	Liabilities to clients and third parties

Non audit engagements
-	Reviews, agreed upon procedures and compilation
-	Reporting on Prospectuses and Prospective Financial Information
-	Due diligence engagements
-	Special purpose audits

Assurance Services
-	Risk assessment
-	Performance measurement
-	System reliability
-	Electronic commerce

TEXTS AND REFERENCES

Recommended Text(s)

1. Messier, William F. and Boh, Margaret, Auditing and Assurance Services in Malaysia, McGraw-Hill Publication.
2. Arens, Alvin A., Loebbecke, James K. and et al., Auditing in Malaysia: An Integrated Approach, Prentice Hall Publication.
3. Ricchiute, David N. Auditing and Assurance Services, South-Western. College Publishing.

Legislation and Regulations

1. Companies Act 1965
2. Securities Commission Regulations
3. Securities Commission Act 1993

Additional References

1. Malaysian Approved Standards on Auditing
2. Malaysian Approved Accounting Standards, MASB
3. MIA By-Laws ( On Professional Conduct & Ethics )
4. Relevant Professional Accounting Journals
5. Chong Aik Lee and Angelina Yee Seow Voon, Auditing Principles and Assurance Services, Malaysia, CCH
6. Pn. Sri Datin Dr. Mary Lee and Tong Seuk Ying, Practical Auditing in Malaysia, Prentice Hall Publication.

* Candidates are to refer to the latest edition of texts and materials

Notes :

Legislation

Questions involving knowledge of legislation will be based on Malaysian legislation and candidates are expected to have knowledge of any current changes in legislation. However, no questions on new legislation will be set until at least six (6) months have elapsed since the last day of the month in which Royal Assent was given to the new legislation.

Technical Pronouncements

Candidates are expected to have a detailed knowledge of and capable of answering questions in respect of the approved accounting standards, approved auditing standards, generally accepted accounting principles, generally accepted auditing standards, regulations and legislation relating to financial accounting, reporting and auditing.

Questions involving knowledge of new approved accounting standards and approved auditing standards will not be set until at least 6 months have elapsed since the last day of the month in which the statement became effective or was published.