The Board of Studies (BoS) of the Institute of Chartered Accountant of India (ICAI) has now assigned weightage of marks to various sections of a subject. This facility would help students to plan their studies in a structured manner for the coming ICAI examinations.
Accordingly, each subject has been divided into various topics and topics have been grouped into sections and weightage range has been assigned to these sections. The question paper would take into consideration the weightage range assigned to different sections.
Following are the detail section wise weightage of marks assigned to the Paper-3 Advanced Auditing and Professional Ethics of CA Final course examination to be held in May 2018 under New Scheme of Education and Training.
Section wise Weightage of Marks for Paper 3
Final Course Paper 3: Advanced Auditing and Professional Ethics
Section I (10 Marks to 20 Marks)
- Auditing Standards, Statements and Guidance Notes:
Engagement & Quality Control Standards, Statements and Guidance Notes on Auditing issued by the ICAI; Elements of system of quality control, leadership responsibilities for quality within the firm, Acceptance and Continuance of clients relationships and specific engagements, Engagement Performances, etc. (SQC 1 Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information and Other Assurance and Related Services Engagements).
Section II (10 Marks to 15 Marks)
- Audit Planning, Strategy and Execution:
Planning the flow of audit work; audit strategy, audit plan, audit programme and importance of supervision; principal’s ultimate responsibility; extent of delegation; control over quality of audit work; Analytical Procedures prior to audit as well as towards finalization; Concept of Principal Auditor and Other Auditor, Acceptance as Principal Auditor, Procedures to be performed by Principal Auditor, Co-ordination between the Principal Auditor and Other Auditor (SA 600 Using the Work of Another Auditor); Concept of Internal Audit Functions and its evaluation, Using the work of the internal audit function, Using internal auditors to provide direct assistance (SA 610 Using the Work of Internal Auditors); Auditor’s Expert – Meaning, Need for an Auditor’s Expert, Understanding the Auditor’s Expert, Agreement with the Auditor’s Expert, Adequacy of the Auditor’s Expert’s Work (SA 620 Using the Work of an Auditor’s Expert).
- Risk Assessment and Internal Control:
Evaluation of internal control procedures; Components of internal controls; Internal control and risk assessment; Risk-based audit- audit risk analysis, general steps; Internal audit; Reporting on internal control weaknesses (SA 265 Communicating Deficiencies in Internal Control to Those Charged With Governance and Management); Framework on Reporting of Internal Controls.
- Special aspects of Auditing in an Automated Environment:
Key features of automated environment, related risks and controls, Standards, Guidelines and procedures, using relevant framework and best practices, understanding and documenting automated environment, Enterprise Risk management overview, assessing IT-related risks and controls, evaluating risks and controls at entity level and process level, Considerations of automated environment at each phase of audit cycle, using relevant analytical procedures and tests using data analytics, key concepts of auditing in real time automated environments such as E-Commerce, ERP, Core Banking, etc.
Section III (15 Marks to 20 Marks)
- Audit of Limited Companies:
Application of Relevant Provisions under the Companies Act, 2013 relating to Audit and Auditors and Rules made thereunder; Powers/rights, duties of auditors; Branch Audit; significance of true and fair view; Dividends and divisible profits- financial, legal, and policy considerations; depreciation; Special features of audit of Limited Liability Partnerships (LLPs)- Eligibility for audit, appointment of auditor, remuneration, etc. Audit report under the Companies Act, 2013; Reporting under CARO.
- Liabilities of Auditors:
Professional negligence; Civil liabilities; Criminal liabilities; Liabilities under different statutes for example Income Tax Act, Companies Act.
- Audit Committee and Corporate Governance:
Audit committee Role of auditor in Audit Committee and Certification of Compliance of Corporate Governance; Compliances with Laws and Regulations (SA 250 Consideration of Laws and Regulations in an Audit of inancial Statements); Disclosure requirements including those of SEBI; Regulatory requirements of Corporate Governance, Report on Corporate Governance.
Section IV (10 Marks to 20 Marks)
- Audit Reports:
Basic elements of auditor’s report; Types of opinion; Notes on accounts; Distinction between notes and qualifications; Distinction between audit reports and certificates; Communication to Management and those charged with Governance; Self Review threats; Drafting of different types of Audit Reports.
- Audit Reports & Certificates for Special Purpose Engagement:
Reporting on Agreed Upon Procedure, Review Reports, Special Purpose Reports (SA 800 Special Considerations-Audits of Financial Statements Prepared in Accordance with Special Purpose Framework; SA 805 Special Considerations-Audits of Single Purpose Financial Statements and Specific Elements, Accounts or Items of a Financial Statement; SA 810 Engagements to Report on Summary Financial Statements); Guidance Note on Audit Reports and Certificates for Special Purposes including Scope of special purpose reports and certificates; Responsibility for preparation of special purpose statements, Scope of the reporting auditor’s functions, Contents of such reports and certificates, Reports and certificates on specific items of financial statements, Communication of report or certificate.
- Audit of Consolidated Financial Statements:
Provisions under the Companies Act, 2013 in respect of Accounts of Companies and Rules made thereunder; Audit of Consolidated Financial Statements- responsibility of parent company, auditor of the consolidated financial statements; audit considerations- permanent consolidation, current period consolidation; reporting.
Section V (10 Marks to 15 Marks)
- Special features of audit of Banks, Insurance & Non-Banking Financial Companies
- Audit under Fiscal Laws:
Audit under Fiscal Laws, viz, Direct and Indirect Tax Laws including documents for Form 3CD etc.
- Special Audit Assignments:
Special audit assignments like audit of members of stock exchange, mutual funds, depositories, bank borrowers; Environmental Audit; Energy audit; Audit of Stock and Debtors (Unit Inspections).
Section VI (5 Marks to 15 Marks)
- Audit of Public Sector Undertakings:
Special features, Directions of Comptroller and Auditor General of India; Concept of propriety audit; Performance audit; Comprehensive audit.
- Internal Audit, Management and Operational Audit:
Provisions of internal audit as per Companies Act, 2013; Scope of internal auditing; Relationship between internal and external auditor; Basics of Internal Audit Standards issued by the ICAI; Drafting of Internal Audit Report; Management audit and Operational audit.
- Due Diligence, Investigation and Forensic Audit:
Due Diligence Review; Audit versus Investigation; Steps for investigation; Types of investigation; procedure, powers, etc. of investigator; Types of Fraud, Indicators of fraud, Follow-up thereof; Forensic audit- meaning, difference between Statutory Audit and Forensic audit, Forensic Audit Techniques, Forensic Audit Report etc.
- Peer Review and Quality Review
Section VII (15 Marks to 20 Marks)
- Professional Ethics:
Code of Ethics with special reference to the relevant provisions of the Chartered Accountants Act, 1949 and the Regulations thereunder.