Principles of External Auditing

Overview/Description
 The thought of an external auditor coming to your company may make you feel uneasy. This course will help you understand how external auditors and companies work together to ensure an accurate audit report. This course will familiarize you with terminology, concepts, strategies, and techniques that are specific to external auditing and its practice. You can expect to develop a solid understanding of planning an audit and assessing audit risk while examining internal controls. Finally, you will learn about auditing financial statements.

Target Audience
 This series of courses is designed for business professionals who perform internal or external audit duties, and individuals interested in understanding auditing, its complexities, and processes. It is also useful for managers, government officials, and employees who may require a general knowledge of internal and external auditing for their jobs.

Expected Duration
4.0 hours

Lesson Objectives:

Assessing Audit Risk

  • recognize the benefits of determining audit risk during the planning stage of an external audit.
  • match given examples to the factors that affect an auditor's desired level of assurance.
  • identify the formulas used to calculate materiality and tolerable error.
  • calculate materiality and tolerable error for a specified external audit.
  • match the types of audit risk to corresponding examples.
  • assign given business elements appropriate risk ratings.
  • calculate the risk of failing to detect a material error for a given audit.

    • Internal Control Systems and the External Auditor

  • recognize the benefits of understanding internal controls.
  • identify examples of the two key factors of effective human resource practices.
  • determine the effectiveness of a given company's human resource practices.
  • identify examples of the attributes of an effective organizational structure.
  • determine the effectiveness of a given company's organizational structure.

    • External Financial Statement Audits

  • recognize the benefits of understanding external financial statement audits.
  • match methods used when auditing a balance sheet to examples.
  • match the criteria that determine whether an entry on an income statement requires further investigation to examples.
  • choose which entries on a given income statement require further investigation.

    • Course Number: FIN0235