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Paper 15: Governance and Compliance Audit

Course Curriculum



UNIT DESCRIPTION This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to effectively plan and conduct a governance and compliance audit. LEARNING OUTCOMES A candidate who passes this paper should be able to: • Identify the objectives and scope of governance and compliance audits • Design and implement a governance and compliance audit strategy • Prepare and interpret various governance and compliance audit reports • Analyse the various checklists/work sheets for governance and compliance audits • Design self-evaluation tools • Draft audit report and audit opinion

By the end of this topic, the learner should be able to understand the basic concepts and elements in auditing.



Legal, regulatory and professional and ethical considerations
4.1    Legal requirements on governance and compliance audit for different types of legal entities 4.2    Codes of governance as issued by ICS and different industry regulators  4.3    Regulatory framework of governance and compliance audit industry regulators  4.4    Governance and compliance audit standards by ICS 4.5    Code of ethics for Certified Secretaries  4.6    Auditors’ authority, professional liability and legal responsibilities 4.7    Professional objectivity, professional skepticism and professional judgment 4.8    The role of ICS in governance and compliance auditing 4.9    Ethics & integrity as a compliance issue

Engagement and appointment 
5.1    Designing terms of reference 5.2    Designing scope of work and request for proposal 5.3    Tendering and procuring audit services  5.4    Designing proposal  5.5    Qualification requirements  5.6    Negotiating fees amount, structure and timelines 5.7    Acceptance and professional appointments 5.8    Award and execution of contract 5.9    Inception report 

Planning for a governance and compliance audit
6.1 Initial considerations for planning 6.2 Planning process with timelines 6.3 Materiality at planning stage 6.4 Determine audit objective and scope 6.5 Determine the key governance and compliance parameters 6.6 Determining the level of assurance 6.7 Identifying subject matter and criteria 6.8 Understanding the entity and its environment 6.9 Developing audit strategy 6.10 Assessing audit risk, threats and safeguards 6.11 Developing audit plan, programme and procedures 6.12 Preparation of audit working papers 6.13 Developing governance compliance matrix 6.14 Governance and compliance audit checklist 6.15 Quality control 6.16 The audit team

Documentation and Communication CHAPTER SEVEN
7.1    Documentation in governance and compliance audit  7.2    Communication between auditor and client organisation

Conduct of governance and compliance audit
8.1    Inception meeting for clarification and/or understanding of key contact persons, scope, process, timelines, schedule, logistics, operating environment and areas of emphasis 8.2    Reviewing the compliance, governance and internal control systems 8.3    Group governance and compliance audits 8.4    Assessing compliance with the Constitution, applicable laws, rules, regulations, international treaties, international agreements, codes of conduct and internal policies 8.5    Coordination in the conduct of governance and compliance audit 8.6    Role of in-house corporate secretary, internal auditor, external auditor, legal auditor, audit committee, regulatory oversight bodies and other governance assurance functions 8.7    Process of governance and compliance audit 8.8    The governance and compliance audit cycle  8.9    Governance and compliance audit tools  8.10    Use of technology 8.11    Scoring methodology 8.12    Data analysis 

Gathering audit evidence 
9.1    Nature and sources of audit evidence 9.2    Types of audit evidence 9.3    Evidence gathering techniques  9.4    Data collection instruments  9.5    Document checklists/list of documents to be provided by client for review by the auditor 9.6    Literature review 9.7    Questionnaire/survey or confidential discussions with select members of the board and senior management using a structured format 9.8    Site visits  9.9    Limitations in gathering audit evidence 9.10    Types of audit tests 9.11    Audit sampling 9.12    Using the work of experts  9.13    Using reports of board evaluation and other internal governance assessments. 9.14    Methods and techniques of auditing high risk areas 9.15    Data analysis 9.16    Evaluating of evidence and forming conclusions 

Reporting governance and compliance audit 
10.1    Purpose and users of auditor's report 10.2    Types, contents, elements and structures of auditors' report 10.3    Governance and compliance audit opinion 10.4    Consequences of various audit reports and opinions 10.5    Reporting of suspected unlawful and/or unethical acts 10.6    Conclusions/opinions in governance and compliance audit  10.7    Reports to those charged with governance 10.8    Governance and compliance report on the annual report 10.9    Interim, final and abridged versions of governance and compliance reports  10.11    Submission, presentation and /or filing of audit report  10.12    Closure of the audit assignment  10.13    Audit follow up 

Implementing audit recommendations 
11.1    Implementation strategies  11.2    Formulating an action plan and compliance matrix 11.3    Role of the Board in implementing the action plan  11.4    Monitoring, evaluating, tracking progress and embedding recommendations/ decisions arising from the audit.

Post governance and compliance audit 
12.1    Nature and scope of subsequent events    12.2    General guidelines on subsequent events

Peer review mechanism
13.1    Purpose, scope and types of peer review    13.2    Responsibilities of parties in peer review 13.3    Peer review mechanism stages    13.4    Quality management and assurance measures 13.5    Confidentiality requirements 

Governance Awards in practice
14.1.1    The ICS Governance Awards, other regional governance awards 14.1.2    Parameters evaluated in the governance awards 14.1.3    Award evaluation tool and scoring  14.1.4    Governance Index

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  • KCSE: C+
  • KASNEB technician, diploma or professional examination certificate
  • Degree from recognized university
  • Other diplomas as may be approved by KASNEB


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