Financial Audit

The recommended base knowledge essential to successfully attend this course unit includes:

CB1. Understanding and mastery of Financial Accounting registration mechanics and financial reporting standards.

CB2. Instrumental capabilities in ratio analysis and economic-financial performance evaluation techniques.

CB3. Basic understanding of corporate law (Business Association Law) and corporate taxation regimes.

ME1. Dynamic & Interactive Exposition (Lectures) – Theoretical-practical sessions of conceptual transmission on key audit topics, combining structured overviews with targeted questioning, quick digital quizzes, and short class debates to validate and consolidate concepts in real-time.

ME2. Case-Based Learning – Cooperative resolution and discussion of practical case studies designed from real Portuguese enterprise (SME) scenarios. Students work autonomously, individually or in small groups, to analyze internal control systems, identify deficiencies, evaluate risks, and draft actionable improvements.

ME3. Research-Led Cooperative Learning – Teamwork focused on research, literature review, and academic synthesis. Students collaborate to study indexed scientific papers, exploring the link between financial auditing, high-quality financial reporting, and investor trust in capital markets.

ME4. Tutorial Guidance & Individual Defense – Structured sessions of continuous feedback and coaching on group projects. The workflow concludes with a formal presentation and individual oral defense of findings to foster professional technical arguments and communication capabilities.

Upon completion of this course unit, the student will be able to:

OA1. Understand the importance of auditing for the financial market and its role and utility within organizations to support decision-making by diverse stakeholder groups.

OA2. Identify the regulatory and ethical requirements for access to and exercise of the auditing profession, with a specific focus on the responsibilities of the Statutory Auditor.

OA3. Analyze and evaluate the role and performance of internal control systems in organizations as a fundamental support for audit planning and development.

OA4. Execute procedures and techniques across different phases of a financial audit, from planning and gathering evidence (working papers) to issuing and interpreting audit reports.

Associated competencies:

CD1. Critical Thinking: Ability to critically analyze internal control procedures, diagnose risk weaknesses, and recommend applicable improvements in business contexts.

CD2. Collaborative Work and Problem Solving: Ability to work cooperatively in small groups to solve and discuss realistic business case studies.

CD3. Research and Scientific Communication: Aptitude for academic research, critical synthesis, and oral presentation of scientific papers linking audit to the quality of financial reporting and capital market trust.

P1. Introduction to financial auditing

1.1. Concept, objectives and historical evolution of financial auditing

1.2. The need for and limitations of an audit, and relationship with other audit types

P2. The role of auditing in organizations

2.1. Framework of the audit function in organizational management

2.2. Entities subject to statutory audit of accounts and inherent legal responsibilities

P3. The auditor

3.1. Requirements for obtaining the Chartered Accountant (ROC) qualification and professional bodies

3.2. Professional ethics, deontology and general regime of auditor’s responsibilities

P4. Auditing standards

4.1. Key national and international standards-setting bodies

4.2. Auditing regulations and technical standards applicable to the profession

P5. Internal control

5.1. Concept, objectives, components and specific procedures of the internal control system

5.2. Relationship of internal control with audit work, and internal control reports

P6. The development of the financial audit work

6.1. Audit evidence, working papers and phases of the audit process (planning to execution)

6.2. Preparation, typologies and critical analysis of statutory audit reports and opinions

Students can choose between two assessment regimes:

A) CONTINUOUS AND PERIODIC ASSESSMENT REGIME:

MA1. Individual Written Mid-Term Tests (60% total)

· Consists of two individual on-site closed-book tests to assess conceptual and practical mastery.
1. First Test: covers syllabus Chapters P1 to P4 - Weight: 30% of the final grade.
2. Second Test: covers syllabus Chapter P6 - Weight: 30% of the final grade.
Minimum grade of 8.0 points in each test. Mandatory.
• AI Directive: Level 0 (Totally AI-free - Use is prohibited).

MA2. Cooperative Resolution of Internal Control Practical Cases (15%)

· Assessment of active teamwork in class (3 students) focused on analyzing internal control case studies from Chapter P5, identifying gaps, and proposing actions.
Minimum grade of 9.5 points.
• AI Directive: Level 1 (AI allowed only for search and conceptual support; prompts and sources must be transparently declared in the report).

MA3. Group Research Project - Written Report (10%)

· Elaboration of a critical review in small groups (3 students) based on indexed top scientific articles linking financial auditing with financial reporting quality and capital market trust.
Minimum grade of 9.5 points.
• AI Directive: Level 2 (AI allowed for drafting and support. The group must attach the AI Use Declaration detailing tools and prompts, plus an authorial critical reflection).

MA4. Individual Presentation and Oral Defense (15%)

· Individual delivery of findings and response to technical questions asked by the lecturer or jury.
This is an strictly individual element, mandatory to validate the group project score (MA3).
Minimum grade of 9.5 points.
• AI Directive: Level 0 (Totally AI-free - On-site defense without digital aid).

Final Grade Calculation Formula (Continuous Assessment):

CF = 0.30 × Test1 + 0.30 × Test2 + 0.15 × MA2 + 0.10 × MA3 + 0.15 × MA4

Note on attendance: The continuous/periodic assessment methodology requires attendance of at least 90% of taught classes.

B) ASSESSMENT BY FINAL EXAM REGIME (Regular and Appeal Seasons):

MA5. Individual Written Exam (70%)

· Written on-site individual closed-book test covering all syllabus items.
Minimum score of 9.5 points required to access the oral defense.
• AI Directive: Level 0 (Totally AI-free - Prohibited).

MA6. Individual Oral Presentation and Defense (30%)

· On-site oral test of competency defense before a panel of lecturers, ensuring academic integrity, knowledge ownership, and technical exposition capacity.
Minimum grade of 9.5 points.
• AI Directive: Level 0 (Totally AI-free - On-site presentation).

Final Grade Calculation Formula (Exam Assessment):

CF = 0.70 × MA5 + 0.30 × MA6

If the student does not attend the oral examination, the final grade will be 9 out of 20.

Working Student Status (TE): Students who are legally entitled to Working Student Status (TE) are exempt from the minimum attendance requirement of 90% of classes. In addition, the internal control practical cases (MA2) and the group research project (MA3) may be completed individually. The individual oral presentation and defence (MA4) remains mandatory and must be conducted in person.

NAO