N/A. Yes. Students are expected to review and understand all areas of the course outline.

Transcription

1 Course Outline School: Department: Business Accounting Course Title: Auditing 2 Course Code: ACCT 332 Course Hours/Credits: 56 Prerequisites: ACCT 331 Co-requisites: Eligible for Prior Learning, Assessment and Recognition: Originated by: N/A Yes Joe Toste Creation : Summer 2014 Revised by: S.Lamarre Revision : Winter 2015 Current Semester: Summer 2015 Approved by: Chairperson/Dean Students are expected to review and understand all areas of the course outline. Retain this course outline for future transfer credit applications. A fee may be charged for additional copies. This course outline is available in alternative formats upon request.

2 Course Description This course is part of the curriculum for the three year Accounting diploma program. Through a major case study and lectures, the student will develop skills in working paper preparation as well as the ability to identify various auditing reports attached to financial statements. Emphasis will be placed on file preparation, evaluation of audit evidence and the documentation of internal control. Through individual work, each student will produce various sections of an audit file. Specific topics include: the role of auditors in the economy, generally accepted auditing standards, audit reports, unaudited engagements, professional ethics and rules of conduct, audit evidence, legal liability and internal control, as well as the audit of the transaction cycles of an organization. Program Outcomes Successful completion of this and other courses in the program culminates in the achievement of the Vocational Learning Outcomes (program outcomes) set by the Ministry of Training, Colleges and Universities in the Program Standard. The VLOs express the learning a student must reliably demonstrate before graduation. To ensure a meaningful learning experience and to better understand how this course and program prepare graduates for success, students are encouraged to review the Program Standard by visiting For apprenticeship-based programs, visit Course Learning Outcomes The student will reliably demonstrate the ability to: Describe and illustrate the four types of audit tests applied to financial statements. Choose the appropriate audit report to assign to the audit circumstances. Describe the appropriate substantive tests to be conducted during the acquisition and payment cycle. Analyze short cases for possible fraud and choose the appropriate remedial actions. Discuss the various sampling approaches in the inventory and warehousing and capital acquisition and repayment cycles. Analyze internal control systems and other organizational issues and prepare the necessary control adjustments. Identify the Board s role in the overall corporate governance including IT. Apply the Audit Command Language software to analyze large amounts of data and infer the results upon the organization Identify and analyze contingent and subsequent events and their implications on the financial results. Essential Employability Skills (EES) The student will reliably demonstrate the ability to*: 7. Analyze, evaluate, and apply relevant information from a variety of sources. *There are 11 Essential Employability Skills outcomes as per the Ministry Program Standard. Of these 11 outcomes, the following will be assessed in this course. THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 2

3 Global Citizenship and Equity (GC&E) Outcomes The student will reliably demonstrate the ability to*: 3. Analyze issues of equity at the personal, professional, and global level. 4. Analyze the use of the world's resources to achieve sustainability and equitable distribution at the personal, professional, and global level. *There are 6 institutional Global Citizenship & Equity outcomes. Of these 6 outcomes, the following will be assessed in this course. Text and other Instructional/Learning Materials Text Book(s): Auditing: An International Approach, 6th Edition Smieliauskas and Bewley (McGraw Hill Ryerson) - Assurance (latest available edition) Material(s) required for completing this course: ACL Software: Students are expected to register for access to the Audit Command Language (ACL) software during the first few weeks of the course. Be sure to keep your Student Access Card that accompanies your new textbook, if you purchased a used textbook, log onto to purchase a card. See your instructor if you experience any problems or for additional information. Scheme Assignments, Quizzes and participation**: Assignments and Quizzes Test 1: Test 1 Test 2: Test 2 Comprehensive Final Exam: Comprehensive Final Exam GC&E Assignment: GC&E Portfolio Assignment discussing global issues. CLO(s) EES GCE Outcome(s) Outcome(s) Weight/100 Assignments, Quizzes and participation** Test Test Comprehensive Final Exam 1, 2, 3, 4, 5, , 7, 8 GC&E Assignment 8 3, 4 5 Total 100% If students are unable to write a test they should immediately contact their professor or program Chair for advice. In exceptional and well documented circumstances (e.g. unforeseen family problems, serious illness, or death of a close family member), students may be able to write a make-up test. All submitted work may be reviewed for authenticity and originality utilizing Turnitin. Students who do not wish to have their work submitted to Turnitin must, by the end of the second week of class, communicate this in writing to the instructor and make mutually agreeable alternate arrangements. When writing tests, students must be able to produce official College photo identification or they may be refused the right to take the test or test results will be void. THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 3

4 Student Accommodation It is College Policy to provide accommodation based on grounds defined in the Ontario Human Rights Code. Accommodation may include modifications to standard practices. Students with disabilities who require academic accommodations must register with the Centre for Students with Disabilities. Students requiring accommodation based on other human rights grounds should talk with their professors as early as possible. Please see the Student Accommodation Policy. Use of Dictionaries Dictionaries may be used in tests and examinations, or in portions of tests and examinations, as long as they are non-electronic (not capable of storing information) and hard copy (reviewed by the invigilator to ensure notes are not incorporated that would affect test or examination integrity). Program or School Policies N/A Course Policies N/A College Policies Students should familiarize themselves with all College Policies that cover academic matters and student conduct. All students and employees have the right to study and work in an environment that is free from discrimination and harassment and promotes respect and equity. Centennial policies ensure all incidents of harassment, discrimination, bullying and violence will be addressed and responded to accordingly. Academic honesty is integral to the learning process and a necessary ingredient of academic integrity. Academic dishonesty includes cheating, plagiarism, and impersonation. All of these occur when the work of others is presented by a student as their own and/or without citing sources of information. Breaches of academic honesty may result in a failing grade on the assignment/course, suspension or expulsion from the college. For more information on these and other policies, please visit Students enrolled in a joint or collaborative program are subject to the partner institution's academic policies. PLAR Process This course is eligible for Prior Learning Assessment and Recognition (PLAR). PLAR is a process by which course credit may be granted for past learning acquired through work or other life experiences. The THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 4

5 PLAR process involves completing an assessment (portfolio, test, assignment, etc.) that reliably demonstrates achievement of the course learning outcomes. Contact the academic school to obtain information on the PLAR process and the required assessment. This course outline and its associated weekly topical(s) may not be reproduced, in whole or in part, without the prior permission of Centennial College. THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 5

6 Topical Outline (subject to change): Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies 1 Foundation review: Chapter 6 Foundation review: Weekly learning Lecture and discussion Chapter 8 outcomes in prerequisite course ACCT 331 Assessing Risks and Chapter 9 Weeks 1-2 Internal Control Chapter 10 Chapter 11 Audit Evidence and Assurance Control assessment and testing Audit Sampling The Revenues, Receivables and Receipts Process 2 Foundation review Assessing Risks and Internal Control Audit Evidence and Assurance Chapter 6 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Foundation review: Weekly learning outcomes in prerequisite course ACCT 331 Lecture and discussion Weeks 1-2 Control assessment and testing Audit Sampling The Revenues, Receivables and Receipts Process 3 The Purchases, Payables and Payments Process Chapter 12 Appendix 12A Internal Control Questionnaires Describe the purchases, payables, and payments process, including typical risks, transactions, account balances, source documents, and controls. Lecture and discussion. Quiz Describe the auditor's control risk assessment and control tests for auditing control over the purchase of inventory, services, and fixed THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 6

7 Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies assets, and for the disbursement of cash. Describe the typical substantive procedures used to respond to the assessed risk of material misstatement in the main account balance and transactions in the purchases, payables, and payments process. Explain the importance of the completeness assertion for auditing the accounts payable liabilities, and the procedures used to search for unrecorded liabilities. Identify audit considerations for observing the physical inventory count. Explain the main auditing procedures used for property, plant, and equipment and intangible assets. 4 Test One Production and Payroll Process Test:Chapters covered prior to week 4: Foundation Review materials and Chapter 12 Start: Chapter 13 Appendix 13A Explain the key risks of misstatement in production and payroll processes. Outline the production process: typical transactions, account balances, source documents, and controls. Give examples of control tests for auditing control over conversion of materials and labour in the production process. Lecture and discussion references Closed book test (15%) Give examples of the typical substantive procedures used to address the assessed risk of material misstatement in the main accounts in the production process. Outline the payroll process: typical transactions, account balances, source documents, and controls. Give examples of control tests for auditing control over hiring, firing, and payment of employees in the payroll process. THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 7

8 Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies 5 Production and Payroll Process Chapter 13 Appendix 13A: Internal Control Questionnaires Give examples of the typical substantive procedures used to address the assessed risk of material misstatement in the main accounts in the payroll process. Explain the key risks of misstatement in production and payroll processes. Outline the production process: typical transactions, account balances, source documents, and controls. Lecture and discussion. Give examples of control tests for auditing control over conversion of materials and labour in the production process. Give examples of the typical substantive procedures used to address the assessed risk of material misstatement in the main accounts in the production process. Outline the payroll process: typical transactions, account balances, source documents, and controls. Give examples of control tests for auditing control over hiring, firing, and payment of employees in the payroll process. 6 Finance and Investment Process Chapter 14 Give examples of the typical substantive procedures used to address the assessed risk of material misstatement in the main accounts in the payroll process. Describe the finance and investment process: risk assessment, typical transactions, source documents, controls, and account balances. Outline control tests for auditing control over debt, owner's equity, and investment transactions. Lecture and discussion. Assignment: DC14-2 and 14-3 Describe the typical substantive procedures used to respond to the assessed risk of THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 8

9 Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies material misstatement in the main account balance, and in transactions in the finance and investment process. Describe the most common fraud problems in the finance and investment process. 7 Completing the audit Chapter 15 Describe the balance sheet account groups that the major revenue and expense accounts are associated with, as well as the substantive analytical procedures applied to audit revenues and expenses. Outline the overall analytical procedures to be performed at the final stage of the audit, including analysis of the income statement, cash flow statement, financial statement presentation, and disclosures. Lecture and Discussion : CAS 402 and CSAE 3416 Case Study (as assigned by the Instructor); Quiz 8 Audit Opinion and the Audit Report Chapter 16 Appendix 16A: Audit Completion Checklist (online) Explain the purpose of lawyers' letters and how they are used at the completion stage of an audit to identify any contingencies and claims. Given a set of facts and circumstances, classify a subsequent event by type and proper treatment in the financial statements, and outline the implications of the timing of discovery of the event for the auditor's report. Explain why written management representations are obtained and what items are generally included in the representation letter, including identification of related parties. Outline the procedures used to complete the documentation of the audit engagement including audit evidence considerations when a service organization is used. Describe the role of professional judgment in achieving the overall objectives of the independent auditor in conducting an audit of financial statements as set out in Canadian Discussion and Case Study THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 9

10 Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies Auditing Standard (CAS) 200. Reference 9 Test Two; Other public accounting services and reports - reviews and compilations Test 2: Additional Chapters covered after Test one; Chapter 17 Explain how accumulated misstatements are evaluated at the conclusion of an audit to form an opinion on the fair presentation of general purpose financial statements. Describe the different forms of audit opinion and the decisions underlying the auditor's choice of form. Explain the purpose of emphasis of matter (EOM) and other matter (OM) paragraphs in an audit report. Summarize the auditor's communications throughout and at the conclusion of the engagement. Prepare reports for review and compilation of unaudited financial statements, given specific facts. Write a report on a review of interim financial information. Lecture and discussion CPA Canada Handbook Closed book test (15%) 10 Professional Rules of Conduct Details and Auditor Responsibilities Chapter 18 Describe the various reports on internal control and their connection with public reporting and reporting to a client's audit committee. Explain the practical importance of professional ethics in audit decision making. Analyze whether a PA's conduct conforms to provincial rules of professional ethics. Lecture and discussion and case material. Explain the major problematic sections of professional rules and their impact on auditors and PAs. Outline the types of penalties that various provincial associations and government agencies can impose on PAs when enforcing THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 10

11 Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies rules of professional conduct. 11 The Audit of Chapter 19 Understand the approach to dealing with Lecture and discussion Quiz Accounting Estimates accounting uncertainty and case material. Assess the going-concern assumptions of financial reporting and its impact on the audit (CAS 570) 12 Other Professional Accounting Services Chapter 21 and Reports, Including CHAPTER APPENDIX Fraud Auditing Appendix 21A: Other Advanced Assurance Topics Describe the main concepts of CAS 540 and its relevance for financial reporting. Demonstrate an ability to apply CAS 540 in a qualitative way. Explain the problems with existing standards. Explain how audit professional judgment differs from accounting professional judgment. Calculate and evaluate accounting risk for reasonable range. Define the various financial presentations and levels of service involved in association with special reports and compliance reporting prospectuses, MD&A, and financial statements for use in other countries. Explain the various financial presentations and levels of service involved in association with future-oriented financial information (FOFI), prospectuses, MD&A, and financial statements for use in other countries. Describe the umbrella standards for assurance engagements, and relate them to an acceptable reporting framework. Explain public sector auditing concepts. Explain environmental auditing issues. Lecture and discussion and case material. : CAS 800: Appendix CAS 805: Appendix 1 and Appendix 2 CAS 810: Appendix THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 11

12 Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies Explain the auditing standards related to external, internal, and governmental auditors' responsibilities to detect and report frauds, errors, irregularities, and illegal acts. Describe ways and means to prevent frauds. Explain the use of extended audit procedures for detecting fraud. Explain with examples Auditors' Reports on Special Purpose Statements (CAS 800) Explain with illustrations Auditors' Reports on Single Financial Statement and on a Specific element of a financial statement (CAS 805) Describe with examples, engagements to report on summary financial statements (CAS810) 13 Overview of other types of engagements Assigned readings Discuss guidance related to WebTrust and SysTrust to meet the needs of internet-based and continuous reporting engagements Explain the following types of engagement where the auditor expresses an opinion - Section 5815: compliance with an agreement or contract - Section 5800: compliance with agreements, statutes and regulations Explain the following types of engagements where an audit opinion is not required: - Section 8500 : Reviews of financial information other than financial statements - Section 8600: Reviews of compliance with agreements and regulations - Section 9100 Applying specified auditing procedures to financial information other than financial statements Research and discussion based on assigned CPA Handbook sections: Section 5815 Section 5800 Section 8500 Section 8600 Section 9100 Section 7600 Outline the standards per Section 7600 on THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 12

13 Week Topics Readings/Materials Weekly Learning Outcome(s) Instructional Strategies providing second opinions 14 FINAL EXAM Comprehensive 40% N/A THIS COURSE ADHERES TO ALL COLLEGE POLICIES (See College Calendar) 13