Audability Ltd 1

1. Introduction to audit and corporate governance

Audability Ltd 2

Spot the auditor

Draw a picture of an auditor

Group exercise

Audability Ltd 3

Spot the auditor

Group exercise

Audability Ltd 4

An audit involves….

Investigating information prepared by someone else to decide whether it is fairly stated

Group exercise

Audability Ltd 5

An audit involves….

Reporting back on your results

Group exercise

Audability Ltd 6

Four key concepts

Planning Risk assessment Evidence Materiality

Group exercise

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Audability Ltd 8

What is audit?

Narrow External Audit

Wider Internal Audit

Widest Anything that uses the work audit e.g. a ‘Health and Safety Audit’

Audability Ltd 9

External versus internal audit

External Audit Internal Audit

Requirement Usually yes e.g. Companies Act

Usually no

Objectives ‘True and fair view’ & sometimes more

Assurance on systems & controls

Independence Never an employee

Can be employees

Reporting Shareholders/ public

Management

Audability Ltd 10

External audit: private vs public

Private sector Public sector

Requirement Yes – Companies Act

Yes – different bits of legislation

Objectives ‘True and fair view’ & sometimes more

‘True and fair view’ & value for money

Independence Firm – appointed by shareholders

Agency or firm – usually not appointed by body

Reporting Shareholders Body/Parliament/ Public

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Some key qualities of auditors …

o Independenceo Integrityo Objectivityo Professional scepticism

Audability Ltd 12

Professional sceptisism

Group exercise

Audability Ltd 13

Benefits of an audit

What do you think are the benefits of having an audit (external or internal)?

Group exercise

Audability Ltd 14

Benefits of audit

Funders Management

Accountability

Funding