Audit Theory and Methodology

Introduction

The course aims to give students a deeper understanding of the theoretical and methodological basis for the subject area of financial auditing and how it is practised.

Course content

• Auditing, certification and assurance services and connected auditor tasks
• The objective of the audit
• Comprehension of the need for financial audits – legal regulation vs. market mechanisms
• Acceptance of audit assignments, content and formulation of appointment letter, including an understanding of the company’s activities, legal conditions
• The role of auditing in a corporate governance perspective
• The audit process
• Strategic planning of auditing, auditing of business processes
• Detailed understanding of materiality and risk assessments, including organizations’ business risk, with consequences for the audit and the audit risk model
• The auditor’s assessment of the client’s internal control (must be considered in connection with the course Auditing III and IV)
• Types and combinations of audit evidence for various audit areas
• Analytical auditing
• Audit of the sales and collection cycle
• Samples for testing, random checks and test methods, including the use of statistical random checks
• Assessment of faults and irregularities, discovered violations of the law, consequences for further auditing and reporting
• Latent obligations
• Events after balance sheet date
• Assessments of the conditions for continued operations
• Audit of the board’s annual report, management obligations
• Quality requirements of the audit (including generally accepted auditing standards)
• The auditor’s reporting to external users, formulation of the auditor’s report, types of auditor’s reports
• Sanctions against the auditor