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. 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.
This module looks at the International Auditing Standards, which are applicable in most countries.
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).
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**.
 Examples include Enron, WorldCom and Tyco (USA), Barings Bank (UK), Parmalat (Italy) HIH (Australia) and Satyam (India).
Full module specification
BEA2019 and BEA2020 (BEA2001)
|Duration of module:||
Duration (weeks) - term 2: |
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 companys 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 Activities||Guided independent study||Placement / study abroad|
Details of learning activities and teaching methods
|Category||Hours of study time||Description|
|Guided Independent Study||118||Reading and preperation for tutorials and assessments|
|Form of assessment||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|Assigned work for each tutorial (in groups or individually)||3 hrs preparation by the students/1hr in-class discussion||1-14||In class and suggested solutions on ELE|
Summative assessment (% of credit)
|Coursework||Written exams||Practical exams|
Details of summative assessment
|Form of assessment||% of credit||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|In-class Test||20||1 hour||1-14||In class and suggested solutions on ELE|
|Final Examination||80||2 hours||1-14||Suggested solutions on ELE|
Details of re-assessment (where required by referral or deferral)
|Original form of assessment||Form of re-assessment||ILOs re-assessed||Timescale for re-assessment|
|In-class test and final examination||Exam (100%) 2 hours||1-14||August examination period|
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].
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?
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.
Last revision date