Audit approach

In this lesson

1. 0:00 Identifying fraud risks in audit planning
2. 2:57 Reviewing journal entries for manipulation
3. 5:26 Assessing management estimates and bias
4. 6:39 Detecting unusual transactions outside normal business
5. 7:24 Written representations as audit evidence

About this lesson

We'll explore the key incentives and opportunities that drive fraudulent reporting—from management pressure to meet profit targets to the nature of the business itself—and how to recognise these red flags during planning. You'll discover the core audit procedures that matter most: scrutinising journal entries for unauthorisation or unusual patterns, evaluating management estimates for bias, and investigating transactions outside the normal course of business. We'll show you what to look for, including material entries, round-sum amounts, and journals posted outside working hours. Understanding these techniques is essential for AA (Audit and Assurance) students preparing for exam success. Finally, we'll cover why management representations are critical audit evidence and what you must obtain from management—their acknowledgement of responsibilities, disclosure of fraud risks, and reporting of any known or suspected frauds. This systematic approach transforms your audit planning into a practical, fraud-aware methodology that builds confidence and demonstrates professional scepticism.

Duration: 8m