module specification

This module focuses on the role of the independent external auditor in assessing the internal controls of the business under review. The process of audit, from planning to the expression of an opinion, is examined.

Successful completion of Level 5: BA Accounting and Finance, BA Accounting and Banking or BA Accounting and Business Management

To provide an understanding of the functions and underlying theory of internal
and external audit, the compilation of evidence and documentation leading to an
audit opinion

To provide an awareness of the need for independence in forming an audit
opinion

To enable the student to identify control risk, internal control procedures and auditing techniques to identify and communicate control weaknesses

It also aims to develop students’ skills, in particular:
- Academic writing skills
- Interpersonal skills, including working with others
- Professional outlook and attitude
- Self assessment and reflection

The purposes and types of audit and the need for professional standards

Auditor rights, duties, obligations and liabilities; the postulates of auditing and the social context of auditing

The engagement process and the particular issue of independence

Organisation of business accounting systems

Audit risk and risk-based audit

Audit planning and documentation

Audit evidence

Internal control risk, procedures and testing – sales and purchases

Audit opinion

Teaching will take the form of a one hour lecture and two hours seminar programme.

The lecture will introduce the subject area in broad terms, all relevant material will be pre-distributed.

The seminar programme will focus on problem solving and discursive questions, attempted in advance, using scenarios, role play and media sessions  to illustrate key concepts.

On successful completion of this module, students will be able to:

1) identify the issues relating to acceptance of an audit engagement together with the
rights, duties and obligations of the auditor and client

2) identify internal control tests to detect weaknesses in specified areas of accounting systems

3) understand the importance of evidence and independence for audit decisions

4) understand audit risk and risk-based audit

The assessment will be in the form of one in-class test (50%) and one end of semester closed book examination (50%)

The one hour in-class test (multiple choice questions and short answer questions) will examine issues in audit practice and theory, which have implications for the auditing profession, the client and society. MCQ's will not exceed 80% of the assessment
    

The examination will be a two hour closed book assessment that will require students to assume the role of audit assistant to determine potential control weaknesses and tests to provide audit evidence, as well as demonstrating an understanding of audit theory and practice.
    
A student shall pass the module if (s)he obtains and overall mark of at least 40%.

Essential  text:

Eilifsen, A. et al. (2010) Auditing and Assurance Services, 2nd International edition.  McGraw Hill: London

Additional reading:

Cosserat,G. and Rodda,N. (2009) Modern Auditing, 3rd edition. Wiley: UK

Gray,I and Manson,S (2011)  The Audit Process – Principles, Practice and Cases, 5th edition. Cengage Learning: UK

Porter,B., Simon, J. and Hatherly,D. (2008) Principles of External Auditing, 3rd edition. Wiley:UK

Journals: Student Accountant (ACCA), Accountancy (ICAEW)

Web sites:
www.accaglobal.com 
www.frc.org.uk 
www.icaew.com
www.ifac.org

Texts, journals and web sites will be added as necessary, with key
articles, in the module booklet and on WebLearn