This Course Guide has been taken from the most recent presentation of the course. It would be useful for reference purposes but please note that there may be updates for the following presentation.
ACT B866
Audit Theory and Practic
Welcome to ACT B866 Audit Theory and Practice.
ACT B866 Audit Theory and Practice is a one-semester, five-credit, postgraduate compulsory course in the Master of Professional Accounting degree programme. The aim of this programme is to produce accounting graduates who, when they combine the programme with practical training, can act as effective and efficient accountants in private and public enterprises in Hong Kong. The programme has been designed so that graduates who wish to proceed to membership of the Hong Kong Institute of Certified Public Accountants (HKICPA) will gain graduate admission status.
Before you begin studying, you must also understand how the course operates and how its parts fit together. The Course Guide can explain this to you. It is very important that you read this Course Guide thoroughly and carefully.
The Course Guide will tell you:
You have probably taken other courses through Hong Kong Metropolitan University, so you should now be well aware of both the study skills required for distance learning and how HKMU courses are organized. It is still recommended, though, that you read this Course Guide thoroughly before looking at the study units or supplementary readings.
The Course Guide tells you briefly what the course is about and how you can work your way through the material. It suggests the amount of time you are likely to need to spend in order to complete the course and will give you a general idea of when your assignments are due. For detailed information on assignments, and for information on due dates for work to be submitted, please refer to the Assignment File.
In distance learning as practised by Hong Kong Metropolitan University, the study units replace the university lecturer. This is one of the great advantages of distance learning: you can read and work through specially designed study material at your own pace at times and places that suit you best. Think of it as reading the lecture instead of hearing it from a lecturer. In the same way that a lecturer might give you an in-class exercise, your study unit will have exercises (called by various names) for you to do at appropriate points. You are also likely to find review questions at the end of each unit. Do them all, as these exercises and questions give you the practice necessary to achieve the objectives of the course and to pass the examination.
Of course, we know that some of you may not be used to studying on your own, so we do offer a limited number of pre-recorded supplementary lectures so you have an option of listening to a lecturer summarizing some of the key points of this course.
ACT B866 provides you with an understanding of auditing principles and procedures that are applicable to the external (statutory) audit and the legal and professional environments that influence the practice of auditing. At this level it is necessary for potential accounting professionals to gain an appreciation of the theoretical basis of the auditing function and the role of an auditor. In this course, many real- life and practical examples have been included to help you understand and apply the auditing concepts. By the end of this course, you should have a much better understanding of the audit process although you may still not be ready to conduct an audit. Many of the skills/knowledge required of an auditor still needs to be learned 'on-the-job'.
As part of this course, you will have opportunities to attempt case studies and present your findings in the dayschool, which will allow you to apply the concepts learned.
Each unit in the course is self-contained and has a set of stated learning outcomes found just after each introduction. You must keep the learning outcomes in mind as you work through a unit. Doing so enables you to assess whether you have mastered them. Study units are the driving force in this course. Each unit addresses a number of major topics, usually with subtopics.
As you read through the topics, you will be asked to do activities, self- tests and sometimes readings. These are provided to help you apply the concepts and techniques so that you have a better understanding of the nature of accounting. You should complete activities and self-tests when you are asked to do so. The answers to the self-tests can be found at the back of the unit, but you should avoid looking at the answer while you attempt an activity. You should return to your unit after each activity or self-test for further discussion of the subject matter, a reading, or another activity.
Activities and self-tests are designed to encourage you to think about what you are reading and to enable you to assess whether you understand the material. Whenever you find that you are unable to successfully answer an activity or self-test, go back over the material it relates to. Then try to answer the question again. If you continue to have problems, contact your tutor. Units end with a summary and sometimes a set of review questions. Some exam-type questions will be added to some units in order to further reinforce your understanding of the topic concerned and apply it to solve relatively complicated problems.
This course aims to introduce you to the fundamentals of auditing and the complex auditing environment. This includes key auditing concepts and principles involved in external auditing, from the planning stage through to the reporting stage.
Upon the completion of ACT B866 Auditing Theory and Practice, you should be able to:
Your primary study materials for this course are:
If you have never studied through distance learning, you will need to become familiar with this approach to learning. Your starting point will always be the study units, which are contained in this folder.
Study units
You should read the study units carefully as they can guide your learning and tell you how to approach any assignment related to the unit. Otherwise, you may miss important information. You must read both the study units and the recommended readings. Moreover, you should also read articles in newspapers and journals and other books related to the topics. The more widely you read, the better your appreciation and understanding of the course.
Each unit is divided into a number of sections. The first section provides the objectives of that unit and introduces the materials to be covered. The next section constitutes the contents of the study unit. This section will guide your learning and direct you to complete the activities and self-tests.
The course has five units in total. Each unit includes objectives, course content, activities and self-tests. The five units are listed below.
| 1 | An overview of the audit function and auditors' ethical and legal environment |
| 2 | The audit process |
| 3 | Corporate governance, enterprise risk management and internal controls |
| 4 | Audit evidence and audit procedures |
| 5 | Communication with shareholders and TCWG and other assurance services |
Textbooks
ACT B866 is a self-contained course and there is no set textbook. However, you are strongly encourage to read widely. Some recommended reference books are listed below. Two books have been chosen to give you more exposure to the breadth of knowledge required of a masters-level course. You will notice that one is a Hong Kong book that has been developed by a local academic and practitioner. The primary strength of this book is its relevance to the Hong Kong setting. Refer to this book for details on Hong Kong legislative and professional requirements. The other is an international edition of a US book, which is well-designed, with plenty of examples and illustrations. However, be careful in your readings, as even though Hong Kong standards are converging with international standards, some differences may still exist.
The two books are:
Lau, P & Lam, N (2021) Auditing and Assurance in Hong Kong, 6th edn, Hong Kong: Pilot Publishing.
Elder, R J, Beasley, M S, Hogan, C E and Arens A A (2020) Auditing and Assurance Services, 17th edn, Global edn, Pearson.
References
Moroney, R, Campbell, F and Hamilton, J (2020) Auditing: A Practical Approach, 4th edn, Wiley.
Leung, P, Coram, P, Cooper, B and Richardson, P (2018) Auditing and Assurance Services, 1st edn, Wiley.
Guide to Using International Standards on Auditing in the Audits of Small- and Medium- Sized Entities, 3rd Edition, IFAC (Free download from http://web.ifac.org/publications)
The following reference books can be accessed online via the HKICPA website:
Professional Ethics and Conduct Members' Handbook Volume I, Hong Kong: Hong Kong Institute of Certified Public Accountants.
Auditing and Assurance Standards, Members' Handbook Volume III, Hong Kong: Hong Kong Institute of Certified Public Accountants.
Assignment File
The Assignment File contains details about the assignments: what they require you to do, what their cutoff dates are, and how many marks each is worth.
Online Learning Environment
This course is supported by HKMU's Online Learning Environment (OLE). You can find course materials and the latest course information from the OLE and use the discussion board to communicate with your tutor, the Course Coordinator and fellow students.
You will be assigned a tutor for this course. Before the course begins, you will be advised by the HKMU Registry of your tutor's name, address, and phone number. Your tutor will:
Your tutor is your first point of contact with HKMU. Please speak with your tutor first about any problem you might have or advice you may need. Your tutor will advise you if you need to contact the Course Coordinator. Your tutor is a helper, or facilitator, who can provide you with considerable assistance when you run into difficulties. He or she is also a leader who can arrange opportunities for you to put into practice some of the course concepts. HKMU urges you to make use of this assistance.
Live online tutorials
To assist you in this course, live online tutorial sessions in the form of small classes will be held by your assigned tutor at several points during the course. The first session will be an introduction to the course, and it may take a different format from the other tutorials. The details of the tutorials will be sent to you before the start of the semester.
We strongly recommend that you attend these tutorials. Their purpose is not only to assist you with any problems you may have, but also to give you the opportunity for further practice on auditing questions. However, these tutorials are not compulsory; if your situation prevents you from attending, you can still complete the course satisfactorily. Contact your tutor by phone more often if you are in this situation.
Tutors are required to start live online tutorial sessions on time. If a tutor fails to turn up 30 minutes after the scheduled starting time, students may assume that the session is cancelled and they should report the case to the Course Coordinator so that a make-up session could be arranged.
Compulsory day school (in person)
You will be offered one compulsory day school (in person) in this course where you may view videos, participate in case discussions and present your findings to the class.
Your assessment comprises two assignments and one three-hour examination.
To pass the course, you are required to fulfill the requirements of both continuous assessment (i.e. assignments) and the final examination.
The marks are allocated as follows:
| Assessment type | Marks |
| Assignments | |
| Assignment 1 | 20% |
| Assignment 2 | 20% 40% |
| Examination (3 hours) | 60% |
| TOTAL | 100% |
To pass this course, you are required to obtain no less than 40% in the continuous assessment components and 40% in the final examination. You are also required to attend the compulsory day schools in person. Failing to attend one of the compulsory day schools will render a Fail grade in the whole course.
Details of the assignments are contained in your Assignment File. For each assignment, there is a 'cutoff date' (i.e. due date) which is the last date for the assignment to be received by your tutor (unless he or she feels there are exceptional reasons why you should be allowed to submit the work later). You should refer to the Student Handbook for the procedures to be followed if you wish to submit an assignment after the cutoff date.
Continuous assessment
All the continuous assessment in this course consists of tutormarked assignments. Except for unusual circumstances, these will be marked by your tutor and monitored by your Course Coordinator.
The assessment tasks have been designed to meet two purposes:
Apart from contributing to your final score, the programme of continuous assessment will help us to monitor your progress so that we can give advice and assistance if you are not performing well. It will give you valuable practice for the final examination. It will also help you to pace your learning and ensure that you develop and reinforce accounting skills regularly. Our experience is that it is usually a mistake to try and learn accounting at the last minute!
To pass the continuous assessment, you must score a minimum overall average of 40% on both assignments. You should submit both assignments. They are designed not just to assess you formally, but to give you important feedback on what you have learned so that you may be better prepared for your examination.
Presentation
You are expected to prepare clear, accurate, well structured, grammatically correct, and neat work. These are characteristics which HKMU expects from all of its students. Markers have been instructed to take these factors into account when marking all forms of assessment.
How to submit assignments
You must use word processing software (such as Microsoft Word) to prepare the assignments, and submit the assignments via the Online Learning Environment (OLE). All assignments must be uploaded to the OLE by the due date.
Failure to upload an assignment in the required format to the OLE may result in the score of the assignment being adjusted to zero.
Assignment submission extension policy
The assignment policy of the University as stated in the Student Handbook should be observed. You are required to submit assignments for this course in accordance with the dates communicated by your Course Coordinator. You may apply for a submission extension on the grounds of illness, accident, disability, bereavement or other compassionate circumstances
Applications for extensions must be submitted online via the OLE. Please note the following:
After an assignment is submitted via the OLE, it is your responsibility to check that the assignment has been successfully submitted. Extension applications due to any problem with uploading will not be accepted. The University cannot accept any responsibility for assignments that are not received by your tutor due to any problem with submission via the OLE. As a precaution, you are advised to keep a copy of each assignment you submit.
According to the University's policy, no extension of the due date will be allowed for the final assignment. This policy will be strictly enforced. Any late submission of the final assignment will result in the score of the assignment being adjusted to zero.
Final examination
At the end of this course, you are required to sit for a three hour examination. The examination is worth 60% of the total marks for the course. You must pass the examination (as well as the continuous assessment) in order to pass the course. To pass the examination, you must score a minimum of 40%. If you fail the examination, you may be given the opportunity to resit the exam at the end of the next presentation of the course. However, to qualify for a resit you must have passed the continuous assessment and, in your exam, you must have reached the minimum resit score, which will be determined by the examiners.
You will receive a copy of the specimen examination paper before the examination. The HKMU Registry will also send you information on the date, time and location of your exam. For your planning, the examination for the April presentation is usually held the following August.
Remember that your final result in this course depends on your performance in both the continuous assessment (assignments) and the examination. In order to pass the course, you need to pass both the continuous assessment and the examination, and the attendance of compulsory day school. For more information on the University's policies on assignments and examination, please refer to Section 7, 'Assignments and Examination', in the HKMU Student Handbook.
It is important that you organize your study schedule at the beginning of the course.
Set out below is a suggested study schedule showing the minimum amount of time you should spend on each unit. The cut-off date for each assignment indicates when you should have completed studying the relevant units.
| Unit | study (weeks) | Assignment | |
| 1 | An overview of the audit function and auditors' professional ethics | 3 | |
| 2 | The audit process | 4 | Assignment 1 |
| 3 | Corporate governance, enterprise risk management and internal controls | 3 | |
| 4 | Audit evidence and audit procedures | 3 | Assignment 2 |
| 5 | Communication with shareholders and TCWG and other assurance services | 2 | |
| Revision | 1 | ||
| Total | 16 | ||
You can set your own pace in this course, provided you meet the deadlines for assignments. However, you are urged to move ahead as soon as possible because once you fall behind in your studies, it is difficult to catch up.
Remember, too, that although you are responsible for your own study, staff members of HKMU are here to help you. If you experience difficulties with any aspect of your course, contact your tutor. If you need any further help, contact your Course Coordinator or other HKMU staff members.
Auditing serves a very important function in the business world. As an accountant, it is necessary that you understand auditing and its capabilities even if you are not a practicing auditor. Chances are you will encounter auditors in whatever position you may undertake in the accounting department of a company. As a future director of a company, you may be in a position to propose and appoint auditors.
If you do decide to pursue a career as an auditor, you will have an opportunity to learn much about different businesses in a relatively short time. It is an interesting and rewarding profession. So, enjoy this first step to a new and exciting world!
Charles Fung joined PricewaterhouseCoopers (PwC) Hong Kong (then known as Lowe, Bingham & Matthews) in 1973 and became a member of The Association of Chartered Certified Accountants (ACCA) and The Hong Kong Institute of Certified Public Accountants (HKICPA) in 1979 and 1980, respectively. He was seconded to PwC London office during October 1978 to June 1980. Charles was admitted to the partnership of PwC Hong Kong in June 1988, and withdrew from the partnership in December 2010.
Charles served the council of the ACCA Hong Kong Branch from 1980-1990, and was elected Chairman of the Branch in 1988. Charles also served several sub-committees and working groups of HKICPA from 1990-1995. He undertook in-house training courses for PwC in the last 30 years on an ad hoc basis, and external training courses regularly for the Macau Society of Registered Auditors, the Macau Finance Bureau and the ACCA, particularly the Train-The-Trainers courses for the ACCA/CICPA for 2007, 2008 and 2010.
Charles was appointed Honorary Professor at the Lee Shau Kee School of Business and Administration of Hong Kong Metropolitan University in May 2012.
If you wish to defer your studies of this course until a later date, you should apply for deferment of studies. For the regulations governing deferment of studies, please refer to your Student Handbook. If you have applied for deferment of studies you should continue with your studies of this course and submit the required assignments until formal approval is given by the University.
Click here and view the Lee Shau Kee School of Business and Administration.
