1.

0 SUBJECT CODE AND NAME: B3: AUDITING PRINCIPLES

AND PRACTICE
2.0 LEVEL: INTERMEDIATE LEVEL
3.0 PRE-REQUISITE SUBJECT: NONE
4.0 CONTACT HOURS: 120

5.0 SUBJECT DESCRIPTION

The subject intends to introduce the nature and purpose of both
internal and external auditing. It further continues by equipping
candidates with hands-on skills of undertaking audit assignments as
per the International Standards on Auditing (ISA) and provides a link
between audit procedures/evidence and audit objectives/
conclusion/report.

6.0 PRINCIPAL LEARNING OUTCOME

Apply auditing principles and standards in executing external audit
assignments (carrying out audit procedures) and coming up with
appropriate reports, as well as implementingentity’s internal control
policies in carrying out internal audits.

7.0 INDICATIVE CONTENT AND SUPPORTING LEARNING OUTCOMES

7.1. Objectives, Process and Need for External Audit and
Assurance Services
Learners will be able to:
(a) Demonstrate understanding of the concepts of audit
andassurance
(b) Describe the reasons for and the benefits gained from
the different types of audit and assurance assignments
including those relatingto financial statements, internal
controls, corporate social responsibility and
sustainabilityreports
(c) Use expectation gap in the context of audit and
assurance assignments and assess their implications for
the profession, including fraud, going concern, internal
control and risk issues
(d) Describe and interpret public interest in auditing and
the need for professional skepticism in carrying out
assurance engagements
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ii THE NATIONAL BOARD OF ACCOUNTANTS AND AUDITORS (NBAA)

 (e) Describe materiality
- Meaning of materiality
- Determinants of materiality
- Quantification of materiality
(f) Describe audit risk and audit risk model
(g) Apply the principles and requirements of audit
documentation
7.2. The Nature and Use of Internal Controls
Learners will be able to:
(a) Describe the nature of internal controls
 internal controls
 financial controls
(b) Describe how internal controls support business,
reportingand compliance.
(c) Describe types of internal controls
(d) Describe IT controls and manual controls
(e) Use the main components of internalcontrol including, the
control environment, risk assessment, control activities,
information andcommunication and monitoring activities
(f) Evaluate internal controls in a scenario stating how the
controls support particular aspects of reliable financial
reporting and support the prevention and detection of
fraud and error
(g) Design audit procedures in response to assessed risks.
(h) Describe and interpret the limitations of internal controls

7.3. The Nature of Audit Evidence and the Selection of Sufficient

Appropriate Evidence
Learners will be able to:
(a) Describe the importance of audit working papers.
(b) Describe the concept of audit evidence including:
 Source of audit evidence
 Appropriateness of audit evidence
(c) Describe the methods of obtaining audit evidence
(d) Analyse efficiency and costs of obtaining audit evidence
(e) Use appropriate audit procedures performed to obtain
audit evidence
(f) Describe and apply the reliability of audit evidence
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ACCOUNTING PROFESSIONAL SYLLABUS
 (g) Describe and apply the sampling of documents and
transactions in gathering audit evidence
(h) Describe and use the relevance audit procedures suitable
to address assertions for elements of financial statements
(i) Describe and apply Computer Assisted Audit Techniques
(CAATs)
(j) Evaluate the appropriateness of information regarding
evidence obtained based on given scenario as basis for
given opinion or report
(k) Evaluate the circumstances under which matters raised
by senior assurance team member can be documented
and communicated to management and those charge
with governance.
7.4. Professional ethics, public interest, fundamental objectives,
threats and safeguards to independence
Learners will be able to:
(a) Describe the importance of and apply professional ethics
(b) Describe in context the fundamental ethical principles.
(c) Analyse rules- based and principles-based approaches
to professional ethics
(d) Evaluate ethical issues based on the IFAC code of ethics
(e) Propose suitable actions to deal with ethical threats
(f) Describe and interpret ethical conflicts for employed
accountant.

7.5. Audit reports, Types and the content

Learners will be able to:
(a) Formulate audit conclusions from evidence collected in
an audit
(b) Analyse the form and content of the auditor’s report for
an audit engagement
(c) Evaluate the implications of going concern, subsequent
events and written representation
(d) Propose an appropriate audit opinion given the
circumstances of an audit
(e) Draft audit reports based on opinions reached.
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 7.6. Public Sector Auditing
Learners will be able to:
(a) Describe the regulatory framework of public sector audit
in Tanzania
(b) Describe the role of Controller and Auditor General
(CAG)
(c) Describe the legal environment in which the CAG and
auditees function: Appointment, functions and legal
mandate, resignation
(d) Describe and apply specific considerations for public
sector auditing
(e) Describe and use Value for Money, management and
technical audit
(f) Describe the role of INTOSAI
(g) Describe the role of Internal Auditor General (IAG)
(h) Describe the legal environment in which IAG operates:
Appointment, function, legal mandate,resignation

7.7. Specialized audits

Learners will be able to:
(a) Explain the features, objectives, conduct and reporting in social
and environmental audits
(b) Explain the features, objectives, conduct and reporting in audit
of not for profit organizations

7.8. Internal Audit of Entities

Leaners will be able to:
(a) Describe the key functions of Internal audit units
(b) Describe International Professional Practice Framework
(IPPF) and its application in internal audit.
(c) Describe and use the internal audit reporting structure.
(d) Describe the rationale for or against outsourcing of
internal audit function.
(e) Describe the assurance and consulting role of internal
audit unit.

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ACCOUNTING PROFESSIONAL SYLLABUS
 (f) Describe the role of internal audit functions in risk
management and internal control
(g) Apply risk-based approach to internal auditing

8.0 LEARNING CONTEXT:

a. Lecturing
b. Classroom discussions
c. Tutorials
d. Group works
e. Individual assignments
f. Surfing/browsing (Web based materials)

9.0 RECOMMENDED LEARNING MATERIALS

NBAA, (2023). Auditing Principles and Practice Study Texts. NBAA.
Dar es Salaam, Tanzania.

10.0 OTHER RECOMMENDED LEARNING MATERIALS

Sylvia, T., and King’ori, J. (2013). Auditing Theory and Practices.

Mhilu, F. (2012). Audit Assurance and Related Services. The Public

Audit Act 2008

IFAC Handbook of International Quality Control, Auditing, Review,

Other Assurance, and Related Services Pronouncements.

Arens A. A. et al (Latest edition). Auditing and Assurance Services: An

Integrated Approach, Auckland: Emerald Group Publishing Ltd.

ACCA Study Texts on Auditing and Assurance Services.

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