Course III (Understanding the Client and Auditing More Complex Areas - PROAUDIT)


To explain how the auditor needs to obtain a detailed understanding of the client and its environment, including its business processes and internal controls. How this information should be used to identify risks.

To explain how to analyse the results of an organisation, and provide useful information and feedback to clients and other interested parties.

To provide an understanding of the audit work required on more complicated areas of the audit.

Day Morning session   Afternoon session
1 Obtaining an understanding of the client and its environment, in accordance with ISA 315.Recording this information efficiently in the permanent file.   Documenting the client’s business processes and internal controls.Reviewing the implementation of the controls.Reviewing the background information and identifying risks.
2 Understanding financial information. Reviewing the accounts of various entities and analysing the results. Considering how the financial results of entities can be affected by management decisions & accounting policies.   Reviewing and auditing the accounting disclosures for non-small entities, including the directors’ report and strategic report.Auditing provisions and contingencies.Reviewing the statement of cash flows for common errors.
3 Related party transactions – auditing & disclosure issues.Auditing corporation tax and deferred tax.Planning for complex stock takes.Auditing inventories (valuation).   Auditing VAT.Auditing income (more complex issues than those covered on Course II, including long-term contracts).


The sessions on days 1, 2 (pm), & 3 will involve the completion of practical exercises and case studies, which will be performed on-screen using laptops. Depending on the audit methodology used by the student’s firm, this will involve either completing the work in an Excel workbook, or in CCH Audit Automation (both PCAS and Mercia master packs are available).

Practical Workshop
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