ACC 670: Audit Theory
Contents
The course analyzes the market structure of the audit market as well as the auditor-client relationship. The separation of ownership and control and widespread shareholdings generate the demand for independent auditing. Audit theory investigates the role played by the auditor as a strategic player. The analysis is based on theoretical models utilizing game theory.
Learning outcomes
Students are familiar with the purpose and the scope of an independent audit. They see auditing as a potential resolution but also a potential source of agency conflicts. Furthermore, students know how the auditor strategically interacts in game theoretic settings. They are aware of the influence of regulatory changes on auditing and the audit firm’s responses to these changes.
Necessary prerequisites
ACC 5XX, not taken ACC 671
Recommended prerequisites
Preparation of the literature that will be provided for self-study
| Forms of teaching and learning | Contact hours | Independent study time |
|---|---|---|
| Lecture | 2 SWS | 9 SWS |
| Exercise class | 1 SWS | 5 SWS |
| ECTS credits | 6 |
| Graded | yes |
| Workload | 180h |
| Language | English |
| Form of assessment | Written exam (60 min.) or oral exam |
| Restricted admission | no |
| Further information | – |
Examiner Performing lecturer |  | Prof. Dr. Dirk Simons Prof. Dr. Dirk Simons, Dr. Sebastian Kronenberger |
| Frequency of offering | Fall semester |
| Duration of module | 1 semester |
| Range of application | M.Sc. MMM, M.Sc. Bus. Edu., M.Sc. Econ., M.Sc. Bus. Inf., LL.M. |
| Preliminary course work | – |
| Literature | Hayes/ Wagenhofer, A. and R. Ewert (2015), Externe Unternehmensrechnung, 3rd edition, Springer. Module-specific literature will be communicated in the lecture. |
| Course outline | Introduction and Institutional Background The Need for Auditing Audit Assignment and Low Balling Learning Effects and Low Balling Auditor Specialization and Low Balling Audit Market Segmentation Risk-Oriented Auditing Approach Strategic Auditing and Substantive Testing The Auditor’s Liability Theory of Liability Regimes Third-Party Liability |