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Nanyang Technological University
Nanyang Business School
AC3101 - ASSURANCE & AUDITING
Semester 1, 2013-14
Outline for Seminar 19
Learning objectives
 Describe the challenges in auditing estimates and identify steps to address those challenges
 Discuss the roles of internal auditors and the reasons entities outsource their internal audit functions  Identify circumstances in which auditors may use the work of internal auditors, other auditors and experts, and factors that should be considered
 Explain special considerations in the audit of group financial statements
Required readings
 EMGP: Ch 3 (LO 14), 5 (LO 4, 12), 20 (LO 8)
 SSA 540, 600, 610, 620
 ISCA Technical (July 2010) - Audits of Group Financial Statements (Including the Work of
Component Auditors) - Key Changes and Requirements for a Group Audit
Further readings
 Steward, T. R., and W. R. Kinney. 2013. Group Audits, Group-Level Controls, and
Component Materiality: How much auditing is enough? The Accounting Review 88, 707-
737.
 Taking the pause: A survey of internal audit in Singapore 2013 by Singapore Accountancy
Commission and KPMG Services Pte Ltd. (See: http://www.kpmg.com/SG/en/IssuesAndInsights/ArticlesPublications/Documents/Audit- Audit-Internal-Audit-Survey-2013.pdf)
Seminar requirements
1. Presentation 9
Read the case “The SEC’s Case against California Micro Devices: A Lesson in Using
Professional Skepticism and Obtaining Sufficient Appropriate Evidence”. Assume that the existing auditing standards and code of ethics in Singapore apply to the case. Answer the following questions:
(a) The auditor of California Micro Device (CMD) was found to have engaged in improper professional conduct as a result of their reckless failure to comply with professional standards. Explain the nature of the violations, making reference to the relevant SSAs.
Organize your response according to the three specific areas of the audit discussed in the case.
(b) There were
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