Auditing

Module description

Summary:

Auditing is of critical importance for the smooth functioning of financial markets and efficient allocation of resources. A number of high profile corporate failures have, however, shaken the confidence of non-expert users in the external audit function[1]. While a number of deficiencies in audit practice contributed to these scandals, much of the criticism directed at the audit profession can be attributed to the fact that process followed by external auditors to reach a conclusion on a company’s financial statements is not well understood.

In this context, the aim of this module is to enable students to understand:

  • the nature and objectives of the audit function,
  • the audit process,
  • the concepts underlying, and the principles of, audit practice and
  • some of the current issues and challenges facing the audit profession.

Additional Information:

Internationalisation

This module looks at the International Auditing Standards, which are applicable in most countries.

External Engagement

This module is accredited by major professional accounting and finance bodies, such as ICAEW (Institute of Chartered Accountants in England and Wales), ACCA (Association of Chartered Certified Accountants), ICAS (Institute of Chartered Accountants of Scotland), and CIPFA (Chartered Institute of Public Finance and Authority).

Employability

This module equips students with practical auditing skills and the course feeds into the accounting qualification.

**It should be noted that the module is intended to provide students with a good understanding of the principles of external auditing and its value for society. The module is at an introductory level and will be useful for students interested in pursuing further studies towards a professional accounting/auditing qualification**. 


[1] Examples include Enron, WorldCom and Tyco (USA), Barings Bank (UK), Parmalat (Italy) HIH (Australia) and Satyam (India).

Full module specification

Module title:Auditing
Module code:BEA3022
Module level:3
Academic year:2019/0
Module lecturers:
  • Mr David Kolitz - Convenor
Module credit:15
ECTS value:

7.5

Pre-requisites:

BEA2019 and BEA2020 (BEA2001)

Co-requisites:

None

Duration of module: Duration (weeks) - term 2:

11

Module aims

The module aims to give you an understanding of the basic concepts and techniques relating to the execution of an audit of financial statements in terms of International Standards on Auditing and provides you with an understanding of the legal and ethical framework surrounding auditing.

The overall aim of the auditing module is to enable students to understand:

  •  the social importance, nature and objectives of the audit function,
  •  the audit process, and
  •  the principles of audit practice.

ILO: Module-specific skills

  • 1. Explain the role and importance of the external audit function and the value of financial statement audits;
  • 2. Discuss the planning phase of an audit engagement and the procedures which an auditor follows before accepting a new audit client;
  • 3. Identify and discuss risks of material misstatement at the overall/financial statement level and at the assertion level;
  • 4. Identify, discuss, explain and critically evaluate a company’s internal controls;
  • 5. Identify, discuss, explain and recommend tests of controls and substantive procedures which can be used to obtain sufficient and appropriate audit evidence;
  • 6. Evaluate misstatements identified during the audit process;
  • 7. Discuss the reporting responsibilities to shareholders and to those charged with the governance of the reporting entity; and
  • 8. Discuss emerging issues in the auditing arena.

ILO: Discipline-specific skills

  • 9. Discuss and apply, relevant auditing standards in a given situation/context;
  • 10. Evaluate and explain the planning and execution phase of an external audit engagement; and
  • 11. Describe and discuss other types of assurance engagement which an external auditor may offer to their client

ILO: Personal and key skills

  • 12. Demonstrate written and oral communication skills
  • 13. Demonstrate problem solving skills
  • 14. Demonstrate group working (i.e. teamwork) skills

Learning activities and teaching methods (given in hours of study time)

Scheduled Learning and Teaching ActivitiesGuided independent studyPlacement / study abroad
321180

Details of learning activities and teaching methods

CategoryHours of study timeDescription
Contact Hours22Lectures
Contact Hours10Tutorials
Guided Independent Study118Reading and preperation for tutorials and assessments

Formative assessment

Form of assessmentSize of the assessment (eg length / duration)ILOs assessedFeedback method
Assigned work for each tutorial (in groups or individually)3 hrs preparation by the students/1hr in-class discussion1-14In class and suggested solutions on ELE

Summative assessment (% of credit)

CourseworkWritten examsPractical exams
01000

Details of summative assessment

Form of assessment% of creditSize of the assessment (eg length / duration)ILOs assessedFeedback method
In-class Test201 hour1-14 In class and suggested solutions on ELE
Final Examination802 hours1-14Suggested solutions on ELE

Details of re-assessment (where required by referral or deferral)

Original form of assessmentForm of re-assessmentILOs re-assessedTimescale for re-assessment
In-class test and final examinationExam (100%) 2 hours1-14August examination period

Re-assessment notes

Should a re-sit be required for this module, it will be by means of one two-hour examination accounting for 100% module marks [ILOs 1-14].

Syllabus plan

 

1: The Conceptual Framework for Assurance Engagements including:

  • The role of auditors
  • The audit expectation gap
    • The regulatory environment

2: The planning phase of an audit engagement including:

  • Pre-engagement activities
  • Gaining an understanding of the client
  • Assessing risk at the overall level
  • Assessing risk at the transaction level
    • Determining materiality

3: The execution phase of an audit engagement including:

  • Tests of control
  • Substantive tests of detail
  • Substantive analytical review

The execution phase is illustrated using different business cycles namely revenue and receivables and purchases and payables.

4: Evaluating misstatements and introduction to the audit report

5: Introduction to other types of assurance engagements

Indicative learning resources - Basic reading

The required text for the module is:

Büchling, M., Cerbone, C., Kok, M., Maroun, W.,  Marques, G. and Segal, T. (2019) Assurance, Risk and Governance: An International Perspective, 1st Edition, Juta, 2019

 

 

Module has an active ELE page?

Yes

Indicative learning resources - Web based and electronic resources

www.ifac.org  – Source of all International Standards on Auditing and Code of Ethics for Professional Accountants, and International Education Standards.

www.frc.org.uk  – Source of all International Standards on Auditing (UK and Ireland) and Ethical Standards.

www.icaew.com , www.icas.com  and www.accaglobal.com – Various publications of the key professional bodies in the UK

Origin date

01/04/2013

Last revision date

03/01/2019