Module: Audit and Assurance
Lecture 4 – Auditor’s Liability, Appointment, Resignation, Removal & Client
Screening
In the exam, it is very likely that you will get questions on ethics and independence
and internal controls.
Coursework Guidance
Requirement 1 – “Critically evaluate…”
Auditing has changed because businesses have changed.
Consider what has happened to businesses over time.
Audit is ‘dynamic’ you will need to look at the changes that has gone on for
a few decades in order to see the current changes today.
Business expansion is happening all over the place and it has become a
complex matter.
It now uses risk-based auditing to deal with the complexity in businesses.
You have to research on what the situation is right now and what the situation
was before.
Requirement 2 – “Discuss how the ‘new normal’…
‘New normal’ means that it’s going to stay and is going to become a way of
life.
Example: teaching online because of COVID
How has the ‘new normal’ changed auditing?
Do you think auditors would now be able to go to the place of their clients and
count stock? The answer is no.
It is a requirement of audit that you must observe stock-taking. The solution
would be to do remote auditing. But the question is: have you got the facility to
do that? You are going to depend a lot on computer systems. People will have
to develop applications to count inventory.
Challenges: to what extent can auditors rely on scanned documents? To what
extent can auditors rely on pictures taken of inventory?
Requirement 3 – “Examine the guidance given by IFAC…”
Audit quality has always been very important in the UK – it’s about the people
in the UK being able to rely on the audit report.
It is a requirement by IFAC that every audit practice has a quality control
department headed by someone who has the responsibility of monitoring what
is going on. Consider how this is going to work with the advent of COVID. The
Lecture 4 – Auditor’s Liability, Appointment, Resignation, Removal & Client
Screening
In the exam, it is very likely that you will get questions on ethics and independence
and internal controls.
Coursework Guidance
Requirement 1 – “Critically evaluate…”
Auditing has changed because businesses have changed.
Consider what has happened to businesses over time.
Audit is ‘dynamic’ you will need to look at the changes that has gone on for
a few decades in order to see the current changes today.
Business expansion is happening all over the place and it has become a
complex matter.
It now uses risk-based auditing to deal with the complexity in businesses.
You have to research on what the situation is right now and what the situation
was before.
Requirement 2 – “Discuss how the ‘new normal’…
‘New normal’ means that it’s going to stay and is going to become a way of
life.
Example: teaching online because of COVID
How has the ‘new normal’ changed auditing?
Do you think auditors would now be able to go to the place of their clients and
count stock? The answer is no.
It is a requirement of audit that you must observe stock-taking. The solution
would be to do remote auditing. But the question is: have you got the facility to
do that? You are going to depend a lot on computer systems. People will have
to develop applications to count inventory.
Challenges: to what extent can auditors rely on scanned documents? To what
extent can auditors rely on pictures taken of inventory?
Requirement 3 – “Examine the guidance given by IFAC…”
Audit quality has always been very important in the UK – it’s about the people
in the UK being able to rely on the audit report.
It is a requirement by IFAC that every audit practice has a quality control
department headed by someone who has the responsibility of monitoring what
is going on. Consider how this is going to work with the advent of COVID. The
