AU-M study guide
AU-M · Work through your exam, one topic at a time.
AU-M is an internal audit certification-style exam built around eight practice domains: auditing fundamentals, planning and risk assessment, internal control and control testing, evidence and procedures, sampling and data analysis, reporting and communication, professional ethics and independence, and information technology in audit. The weighting is deliberate. The AU-M study guide has 8 sections and about 2,288 words.
01Fundamentals of Auditing
An audit of financial statements expresses an opinion on whether the statements are prepared, in all material respects, in accordance with the applicable financial reporting framework. Candidates must distinguish reasonable assurance from absolute assurance, and understand that an audit is not a guarantee against fraud or error.
306 words, about 2 min02Audit Planning and Risk Assessment
Planning establishes the scope, timing, and direction of the audit and is a continuous process. Candidates must understand acceptance and continuance procedures, engagement letters, and the use of materiality in planning.
301 words, about 2 min03Internal Control and Control Testing
Internal control comprises the control environment, the entity's risk assessment process, the information system, control activities, and monitoring. Candidates must understand the five components and how they interact.
288 words, about 1 min04Audit Evidence and Procedures
Audit evidence must be sufficient (quantity) and appropriate (relevance and reliability). Reliability depends on source and nature: external evidence is generally more reliable than internal; original documents more than copies; auditor-obtained evidence more than client-provided; documentary more than oral.
278 words, about 1 min05Audit Sampling and Data Analysis
Audit sampling enables the auditor to obtain evidence about a population. Understand statistical versus non-statistical sampling, sampling risk, and non-sampling risk.
297 words, about 1 min06Audit Reporting and Communication
The auditor evaluates the evidence and concludes whether the financial statements give a true and fair view (or are presented fairly). The opinion may be unmodified or modified.
288 words, about 1 min07Professional Ethics and Independence
Know the fundamental principles: integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. Understand the conceptual framework: identify threats, evaluate them, and address them by eliminating circumstances, applying safeguards, or declining the engagement.
269 words, about 1 min08Information Technology and Audit
Understand how IT affects the audit: automated controls, data integrity, and the need to consider IT general controls (ITGCs) over access, program changes, program development, and computer operations. ITGCs support the reliable operation of automated application controls.
261 words, about 1 min