How Audits Work

An audit course built around risk

This intermediate University of California, Santa Barbara course centres on evaluating audit risk, the idea that organises the rest of auditing: how much can go wrong before an auditor must act. It links planning to the evidence that will be gathered.

Planning and controls

Planning an audit means deciding where the risk sits, and internal controls are a central part of that judgement. Financial statement analysis supports both steps, since the figures show where a reviewer should look more closely.

For self-study

• Sketch how a control weakness would change the planned audit approach.
• Practise matching a risk to the procedure that addresses it.
• Read a short audit report and identify its risk language.