Module description
What is the module about?
This module aims to provide students with an understanding of the fundamentals of audit and assurance practices, in relation to the regulatory framework. The students will discuss the role, principles and limits of audit and assurance, learn to assess internal controls and apply the audit procedures for detecting material misstatements or fraud in the financial statements. The students will also discuss the professional values of auditing and learn to apply them to specific cases. The students may be required to demonstrate problem solving skills and develop reasoned arguments by applying concepts and frameworks to case studies.
Provisional Lecture Outline
Week 1: Audit and regulatory framework
Presentation of the module and of its main concepts, including assurance engagements and the audit process. Discussion of the role and need for audits. Detail the main regulatory frameworks, including International Audit Standards and the different levels of assurance engagement.
Week 2: Professional values and Code of Ethics
Discuss the objective of the audit and the auditor responsibilities. introduce the auditor professional scepticism and judgment. Present the main professional values related to accounting and auditing and discuss their roles and limits. Discuss the professional ethics and how to distinguish ethical from unethical behaviours. resolve ethical dilemmas.
Week 3: Audit Planning and Evidence
Discuss the needs of the audit planning. Describe he client acceptance decision and the initial audit planning. Understand the client' business and industry. Introduce the nature of audit evidence , the types of audit evidence and how to use them to create an audit program.
Week 4: Assessing risk of material misstatements in the financial reporting
Understand the concept of materiality and how the auditor use it to evaluate audit findings. Discuss the risk assessment procedure and how to identify the significant risks. Describe the audit risk model and its components and the relationship with audit evidence.
Week 5: Internal controls and control risks
Describe the primary objectives of effective internal control. Explain the main components of an internal control system. Assessing control risk by linking key control and control deficiencies to transaction related audit objectives. Explain how assessing the internal control risk impact on the audit risk model.
Week 6: Assessing and response to fraud risk
Define fraud and distinguish between fraudulent financial reporting and misappropriation of assets. Identify the condition of fraud and how corporate governance and internal control system can reduce fraud risks. Discuss how the auditors can identify the fraud risks, detect them and document their findings.
Week 7: Audit strategy and Planning
Understand the use of audit tests to determining whether financial statements are fairly stated. Understand the concept of evidence mix and how it should be varied in different circumstances. Design an audit program and the four phases of audit process.
Week 8: Audit Process
Apply audit procedures for audit the sales and collection cycle, and audit of the acquisition and payment cycle.
Week 9: Audit Report and Documentation
Discuss the needs for an adequate audit documentation. Understand the process of completing the audit. Discuss the nature of the audit reports and the different audits opinions and how they influence the investors' decision-making process.
Week 10: Revision
Assessment details
70% Examination
30% Individual Assessment
Teaching pattern
Weekly Lecture
Weekly Tutorial
Suggested reading list
Alvin A Arens. Randal J Elder. Mark S Beasley, Chris E. Hogan, Auditing and Assurance Services, 2020 Pearson
Gray, I, Manson, S., The Audit Process, Principles, Practice and Cases, Cengage
Hayes, R., Dassen, R., Schilder, A., Wallage, P., The Principles of Auditing: An Introduction to International Standards on Auditing, FT: Prentice Hall