This unit is primarily focused on the external audit of corporate financial statements while also covering other assurance services, professional ethics, and legal liabilities.  The lectures presented are structured to correspond with auditing process in theory and practice, and inevitably integrate Australian and International Auditing Standards.

The majority of the lectures deal with the various activities undertaken by external auditors.  The main stages of the audit process are addressed including risk analysis in auditing, audit planning and documentation, fraud auditing, gathering and evaluating audit evidence (including performance of tests of controls and substantive audit procedures) and the formation of the audit opinion. Other topics, including auditors' legal responsibilities, audit quality and ethics, and other assurance services, are also dealt with as special topics. 

The lectures mainly deal with the concepts underlying the methodology, while the tutorial assignments are used to demonstrate how the methodology is applied in practical situations.

Upon successful completion of the requirements for this course, students will be able to:

• discuss the need for an independent or external audit and describe briefly the development of the role of the assurance provider in modern business society;
• explain the regulatory environment in which the external auditor operates (including relevant sections of the Corporations Act 2001 and the auditing standards issued by the Australian Auditing and Assurance Standards Board (AUASB) as well as the standards issued by the Australia Professional Ethical Standards Board) and apply those rules, standards and pronouncements to the conduct of a financial report audit and other assurance engagements;
• describe the quality control procedures necessary to ensure that a competent assurance engagement is performed, and apply professional ethics including Code of Conduct to specific scenarios;
• understand the financial report audit process, beginning with accepting clients, followed by understanding the client, evaluating business risk and assessing inherent risk, performing tests of controls to assess control risk and substantive tests to reduce detection risk, considering subsequent events and evaluating evidence gathered, ending in the formation of an audit opinion and communication of the results to the client;
• describe the various levels of persuasiveness of different types of audit evidence and explain the broad principles of audit sampling techniques;
• or major transaction types and account balances, identify appropriate assertions at risk and apply appropriate audit procedures to test the assertions identified;
• understand auditors’ legal liabilities, and be able to apply case law in making a judgement whether auditors might be liable to certain parties;
• describe other assurance and non-assurance services provided by the auditing and assurance profession, and, for assurance services, understand the level of assurance provided.

In addition, the course aims to develop students’ cognitive skills (especially analytical, appreciative, and communication skills).

Currently the assessment for this course is:

• Tutorial Assignment 10%
• Mid semester exam 15%
• Group assignment 20%
• Final examination 55%

This may change in future semesters.

Assessment for Summer School 2012 was as follows:

• Mid-semester test 15%
• Final Examination 85%

Students taking this course are expected to commit at least 10 hours a week to completing the work.  This will include:

• 2 hours a week: lecture
• 1 hour a week: tutorial
• 3 - 4 hours a week: reading, working on tutorial exercises
• 3 - 4 hours a week: researching, working on assignment and/or preparing test/examination

The course is designed to be taken in the final year of an accounting major.  You are expected to have retained familiarity with the concepts studied in previous accounting, introductory commercial law, information systems and introductory statistics courses.

BUSN2015 Company Accounting and either BUSN2101 Law of Business Entities or LAWS2203 Corporations Law.

Incompatible with COMM3002 Auditing.

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For further information please see the course website