Introductory description

This is an elective module available for WBS and non-WBS students.

This module provides an insight into the role of external audit and explores the importance of external audit for the stakeholders of an organisation. The module is quite practical and based on real-life audit situations. Successful completion of the module allows students to gain appreciation of the regulatory framework in which auditors operate, apply this knowledge to case study situations and evaluate the procedures used by auditors. As well as considering the process of external audit, the module also explores the profession of auditing, looking at how the professional firms operate, and profession-wide issues such as audit quality, ethical behaviour and political pressures.

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.
• The audit profession, the role of the 'Big 4' and pressure for change in how the profession operates.
• Current issues in audit, for example auditor liability and the expectation gap.

Learning outcomes

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

• Critically evaluate the operation of the audit profession and the relevance of external audit for a range of stakeholders.
• Explain the matters to be considered and the procedures that should be performed during the audit process.
• Analyse scenarios to determine if ethical problems exist, and recommend appropriate actions.
• Discuss and evaluate the impact of current developments in the audit profession.
• Apply logical reasoning to justify actions to be taken by auditors in a given situation.
• Critically evaluate a range of issues including the operation of the audit profession and the regulatory framework.

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
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
Collings, S. (2014), Frequently Asked Questions on International Standards on Auditing, 1st Edition, Wily. - recommended text

Subject specific skills

Apply audit regulations to practical business scenarios.
Recognise factors which impact on audit quality.
Develop professional scepticism and question information provided when appropriate.

Transferable skills

Demonstrate oral and written communication skills.