ICAG Advanced Audit and Assurance (Paper 3.2) Tuition in Ghana

Ethics runs through every section of Paper 3.2 — the examiner expects professional-level candidates to recognise and respond to ethical dilemmas by instinct. Section A specifically tests the ethical and legal dimensions of accepting and managing audit engagements.

Evaluating ethical and legal issues

• Identify threats to independence — self-interest, self-review, advocacy, familiarity, intimidation — and evaluate their significance
• Apply the conceptual framework: identify the threat, evaluate significance, apply safeguards, document the conclusion
• Know when threats cannot be reduced to an acceptable level — and when to decline or withdraw
• Apply ICAG's Code of Ethics, particularly independence in audit and assurance engagements
• Evaluate and communicate ethical issues with clients, engagement partners and regulators

Tendering, advertising & fee agreements

• Permitted advertising and marketing under ICAG's ethical requirements
• Tendering procedures — proposals, fee estimation, scope definition
• Contingent fees — prohibited for audit engagements; rationale and exceptions
• Fee levels — too low (competence threat) or too high (self-interest threat); referral fees and disclosure

Legal liability in audit

Engagement acceptance considerations

• Business risk — technology, cyber security and fraud factors
• Audit risk at entity level — industry, operations, governance
• Resources — sufficient staff, skills and time to the required standard
• Quality management under ISQM 1; use of internal audit, component auditors and specialists; joint audits; the engagement letter as a contract

Planning is the foundation of every quality audit. At Paper 3.2 the emphasis is on justification and professional judgement — not listing procedures, but explaining why each element of the plan is appropriate given the identified risks.

Risk assessment

• Inherent risk — susceptibility to misstatement before controls
• Control risk — risk controls fail to prevent or detect misstatement
• Detection risk — the risk the auditor's own procedures miss a misstatement (what the auditor controls)
• Significant risks and understanding the entity — business model, industry, regulation, governance

Materiality

• Overall (planning) materiality — benchmarks such as 5% of profit before tax, 0.5–1% of revenue, or 1–2% of total assets
• Performance materiality — set below overall (typically 50–75%) to reduce aggregation risk
• Specific materiality — for sensitive items such as related-party transactions and directors' remuneration

Internal control, reliance & automated tools

• Control environment, risk assessment, control activities, information & communication, monitoring
• IT general controls (access, change management, backup) and application controls — specifically examinable
• Reliance on internal audit (ISA 610), auditor's experts (ISA 620), component auditors (ISA 600)
• CAATs and data analytics — 100% population testing, anomaly detection; ATT for selecting and evaluating evidence

Joint-highest weighting in the paper. It tests the practical application of audit procedures to gather sufficient appropriate evidence — developing detailed, justified audit plans linked to identified risks and assertions.

The audit assertions framework

Types of audit procedures & sampling

• Tests of controls — inspection, re-performance, observation, enquiry, CAATs (to test operating effectiveness when relying on controls)
• Substantive tests of detail — receivables confirmations, inventory counts, inspecting title deeds
• Substantive analytical procedures — gross-margin and trend analysis, reconciling revenue to VAT returns
• Sampling — statistical (random, systematic, monetary unit/PPS) vs non-statistical; Type I and II errors; projecting misstatements to the population

Detailed procedures by balance-sheet area

Where the auditor's professional judgement is most visible: evaluating evidence, forming conclusions, and communicating findings in audit reports and management letters.

Evaluating audit evidence & estimates

• Relevance — does it address the assertion?
• Reliability — external > internal; documentary > oral; originals > copies
• Sufficiency — enough evidence given risk, materiality and quality
• Professional scepticism — especially for judgements, estimates (ISA 540 Revised) and related-party transactions

Subsequent events (ISA 560)

Audit reports — ISA 700 and modified opinions

• Emphasis of Matter and Other Matter paragraphs — drawing attention without modifying the opinion
• Key Audit Matters (ISA 701) — required for listed entities in Ghana
• Communications with governance — deficiencies (ISA 265), scope & timing (ISA 260), written representations (ISA 580)
• When to refer to an expert, withdraw from the engagement, or meet whistle-blowing and money-laundering reporting duties

Uniquely Ghana-specific and one of MSL's strongest teaching advantages — our lecturers have direct experience of Ghana's public accountability framework. Essential for any candidate planning to work in or with the public sector.

Government external audit, internationally and in Ghana

• Supreme Audit Institutions and INTOSAI — the Lima Declaration (independence, competence, mandate), the Mexico Declaration (eight principles of independence), and the ISSAI standards
• The Auditor-General of Ghana — constitutionally protected under Article 187; audits all public accounts; reports to Parliament; power to disallow and surcharge; removal only by a process akin to a Supreme Court Justice

Ghana's public accountability architecture

Public accountability mechanisms

• Value-for-money auditing — the 3Es: economy, efficiency, effectiveness
• Performance auditing — do programmes achieve their objectives?
• Transparency and disclosure obligations
• OECD guidelines on corporate governance of state-owned enterprises

The system by which companies are directed and controlled — a pervasive theme and core competence. Section F tests the ability to appraise governance mechanisms critically and apply them to scenarios, addressing the agency problem between owners and directors.

Boards, NEDs and the audit committee

• Board structures and committees — audit, remuneration, nominations, risk; accountability, transparency, shareholder and stakeholder rights
• Non-executive directors — independent oversight, challenging strategy, scrutinising performance, assuring the integrity of financial information, setting executive remuneration
• The audit committee — majority independent NEDs with relevant financial experience; oversees financial reporting, internal control, internal audit and the external auditor (appointment, plan, findings, independence)

Corporate governance codes in Ghana

Applying audit principles to the public sector, where objectives, accountability relationships and standards differ from the private sector — particularly important in Ghana, where the public sector is a major source of professional accounting work.

• Financial audit — whether government financial statements are fairly stated under IPSAS (or cash-basis IPSAS); accountability to Parliament rather than shareholders; the Auditor-General issues a report on each entity
• Performance audit — the 3Es (economy, efficiency, effectiveness) of government programmes, via interviews, surveys, document review, site visits and benchmarking
• Compliance audit — conformity with laws and policies, including the Public Financial Management Act, 2016 (Act 921) and the Procurement Act, 2003 (Act 663)
• The Ghana health sector — a syllabus focus: donor-fund management (World Bank, Global Fund, USAID), the NHIA, health-sector procurement, and district health controls

The audit profession is undergoing its most significant transformation in decades. Section H rewards candidates genuinely engaged with the profession — able to evaluate current and emerging challenges and their implications for Ghana and globally.

Regulators in Ghana that rely on audited financial statements

• Bank of Ghana — banks and specialised deposit-taking institutions
• Securities and Exchange Commission — capital markets and listed companies
• Ghana Stock Exchange — listing rules and timely audited accounts
• National Insurance Commission and NPRA (Pensions Act, 2008, Act 766)