Introductory description

N/A.

Module web page

Module aims

Outline syllabus

This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.

The module covers the following:

• The context for auditing activity, including the regulatory framework in which the audit profession operates, and the societal and economic impacts of the profession.
• Themes which underpin audit quality, including the application of professional ethics.
• The audit process including planning an external audit, risk assessment, obtaining audit evidence and reporting audit findings, addressing a range of practical and theoretical issues.
• The relationship between external and internal functions and the role of audit in corporate governance.
• Auditor behaviour and attributes, including the use of professional scepticism and professional judgement.
• Assurance engagements provided by audit firms, such as due diligence and reviews of forecast financial information.
• Audits in different contexts, such as public sector and charity audits.
• Current issues in audit, for example auditor liability, the expectation gap, the impact of developments in information technology.

Learning outcomes

By the end of the module, students should be able to:

• Critically evaluate the relevance of external audit for wider processes of accountability and governance.
• Discuss the relationship between the audit firm and those charged with governance of the audited entity.
• Analyse the regulatory environment in which auditing operates.
• Explain the matters to be considered and the procedures that should be carried out before accepting an audit client.
• Plan elements of an audit engagement, perform risk assessment, analytical review and determine an audit strategy.
• Evaluate the importance of internal controls to the audit process.
• Identify and evaluate the sources and nature of evidence to be gathered in an audit process.
• Evaluate whether going concern issues are present and recomment an appropriate auditor response.
• Recommend the form and nature of an audit report for given scenarios, critically evaluate the audit report.
• Analyse scenarios to determine if ethical problems exist, and recommend appropriate actions for the audit firm.
• Assess whether an audit engagement has been planned and performed in accordance with professional standards and whether reports issued are appropriate in the circumstances.
• Discuss the application of professional judgement and professional scepticism in an audit.
• Discuss current developments in auditing including the need for new and revised standards and evaluate potential impacts on the conduct of audits.
• Recognise topical issues relating to the audit function in particular discussions around corporate governance, accountability and auditor's role.
• Demonstrate the ability to evaluate critically the auditing issues discussed.

Indicative reading list

Much of the reading for this module will be focused on the regulations which apply to the external audit process. These are issued by the Financial Reporting Council in the UK.
International Standards on Auditing (ISAs), the Ethical Standard applicable to auditors in the UK and the Corporate Governance Code are all available from the Financial Reporting Council website:

Audit and Assurance www.frc.org.uk
I will post links to relevant readings each week - some weeks this may be reading a particular piece of regulation (ethical code, audit standard etc), other weeks' reading could include press articles, extracts from professional body reports or company audit reports.

There are also some textbooks which provide useful insight to the external audit process and governance issues. The following texts are referred to most frequently:
Millichamp, A. and Taylor, J. (2018), Auditing, 11th Edition, Cengage Learning - essential text.
Gray I., Manson S. and Crawford, L., (2015). The Audit Process; Principles , practice and cases, 6th Edition ,South Western Cengage Learning - recommended text.
Collings, S. (2011), Interpretation and Application of International Standards on Auditing, 1st Edition, Wiley. - recommended text.
Collings, S. (2014), Frequently Asked Questions on International Standards on Auditing, 1st Edition, Wily. - recommended text.
Solomon, J. (2013), Corporate Governance and Accountability (2013), 4th Edition, Wiley - recommended text.

Subject specific skills

• Review relevant literature within the field of auditing.
• Manage own learning and contribute to group discussions.
• Apply knowledge to practical business scenarios.
• Construct arguments that use appropriate theory and techniques and synthesise all sides of an argument to reach a conclusion.
• Justify relevant recommendations in a range of business scenarios.
• Develop professional scepticism and question information provided when appropriate.

Transferable skills

• Demonstrate oral and written communication skills.
• Reflect critically on the learning process throughout the module.