Faculty Syllabus

Exams/Quizzes- (55-75%)

Course Activities- (25- 45%)

Letter grades for the course will be assigned based on the total number of points accumulated during the course, according to the following scale:

Auditing and Assurance Services (Looseleaf) - With Connect

By  Louwers, Timothy

Edition : 9TH 24

Publisher : MCG

ISBN 13 : 9781264624133

Chapter 1: Auditing & Assurance Services

• Define information risk and explain how the financial statement auditing process helps to reduce this risk, thereby reducing the cost of capital for a company
• Define and contrast assurance, attestation, and financial statement auditing services
• Describe and define the assertions that management makes about the recognition, measurement, presentation, and disclosure of the financial statements and explain why auditors use them as the focal point of the audit
• Define professional skepticism and explain its key characteristics
• Describe the organization of public accounting firms and identify the various services they offer
• Describe the audits and auditors in governmental, internal, and operational auditing
• List and explain the requirements for becoming a certified public accountant (CPA) and other certifications available to an accounting professional

Chapter 2: Professional Standards

• Understand the development and source of generally accepted auditing standards
• Describe the fundamental principle of responsibilities and how this principle relates to the characteristics and qualifications of auditors
• Describe the fundamental principle of performance and identify the major activities performed in an audit
• Understand the fundamental principle of reporting and identify the basic contents of the auditors’ report
• Understand the role of a system of quality control and monitoring efforts in enabling public accounting firms to meet appropriate levels of professional quality

Chapter 3: Engagement Planning and Audit Evidence

• List and describe the required pre engagement activities that auditors undertake before beginning an audit engagement
• Understand the importance of planning the audit engagement so that it is conducted in accordance with professional standards
• Define materiality and explain its importance in the audit planning process
• List and describe the eight general types of audit procedures for gathering evidence
• Define what is meant by the proper form and content of audit documentation

Chapter 4: The Audit Risk Model and Inherent Risk Assessment

• Define audit risk and describe how it can be broken down into the three separate components of the audit risk model to help assess and respond to such risks during the audit planning process
• Explain auditors’ responsibility for fraud risk assessment and define and explain the differences among several types of fraud and errors that might occur in an organization
• Explain auditors’ responsibility to assess inherent risk, including a description of the type of risk assessment procedures that should be performed when assessing inherent risk on an audit engagement
• Understand the different sources of information and the audit procedures used by auditors when assessing risks, including analytical procedures, brainstorming, and inquiries
• Explain how auditors complete and document the overall assessment of inherent risk and the special considerations given to fraud risks and noncompliance with laws and regulations
• Describe the content and purpose of an audit strategy memorandum

Chapter 5: Risk Assessment: Internal Control Evaluation

• Define and describe what is meant by internal control
• Distinguish between the responsibilities of management and auditors regarding an entity’s internal control
• Define and describe the five basic components of internal control and specify some of their characteristics
• Explain the process the audit team uses to assess control risk; understand its impact on the risk of material misstatement; and, ultimately, know how it affects the nature, timing, and extent of further audit procedures to be performed on the audit
• Explain the communication of internal control deficiencies to those charged with governance, such as the audit committee and other key management personnel

Chapter 6: Employee Fraud and the Audit of Cash

• Define and explain the differences among several kinds of employee frauds that might occur at an audit client
• Identify and explain the three conditions (i.e., the fraud triangle) that often exist when a fraud occurs
• Describe techniques that can be used to prevent employee fraud
• Identify the relevant assertion and risks of material misstatement that are typically related to the cash balance
• Identify important internal control activities present in a properly designed system to mitigate the risk of material misstatements for each relevant assertion related to cash and to help prevent or detect employee fraud
• Give examples of substantive procedures used to test cash and relate them to the relevant assertions
• Describe some extended procedures for detecting employee fraud schemes involving cash

Chapter 7: Revenue and Collection Cycle

• Describe the revenue and collection cycle, including typical source documents
• Identify significant accounts and relevant assertions related to the revenue and collection cycle
• Discuss the risk of material misstatement in the revenue and collection cycle, with a specific focus on improper revenue recognition
• Identify important internal control activities present in a properly designed system to mitigate the risk of material misstatements for each relevant assertion in the revenue and collection cycle
• Give examples of tests of controls to test the operating effectiveness of internal controls in the revenue and collection cycle
• Give examples of substantive procedures in the revenue and collection cycle and relate them to assertions about account balances at the end of the period
• Apply your knowledge to perform audit procedures in the revenue and collection cycle and evaluate the findings of your tests

Chapter 8: Acquisition and Expenditure Cycle

• Describe the acquisition and expenditure cycle, including typical source documents
• Identify significant accounts and relevant assertions related to the acquisition and expenditure cycle
• Discuss the risk of material misstatement in the acquisition and expenditure cycle
• Identify important internal control activities present in a properly designed system to mitigate the risk of material misstatements for each relevant assertion in the acquisition and expenditure cycle
• Give examples of tests of controls to verify the operating effectiveness of internal controls in the acquisition and expenditure cycle
• Give examples of substantive procedures in the acquisition and expenditure cycle and relate them to assertions about significant account balances at the end of the period
• Apply your knowledge to perform audit procedures in the acquisition and expenditure cycle and evaluate the findings of your tests
• Describe the payroll cycle including risks, source documents, and controls (Appendix 8C).

Chapter 9: The Production Cycle and Auditing Inventory

• Describe the production cycle, including typical source documents
• Identify significant accounts and relevant assertions related to the audit of inventory
• Discuss the risk of material misstatement in the audit of inventory
• Identify important internal control activities present in a properly designed system to mitigate the risk of material misstatements for each relevant assertion in inventory management
• Give examples of tests of controls to test the operating effectiveness of internal controls in managing inventory
• Give examples of substantive procedures in audits of inventory and relate them to assertions about significant account balances at the end of the period
• Apply your knowledge to perform audit procedures in the audit of inventory and evaluate the findings of your tests

Chapter 10: Finance and Investment Cycle

• Describe the finance and investment cycle, including typical source documents
• Identify significant accounts and relevant assertions related to the finance and investment cycle
• Discuss the risk of material misstatement in the finance and investment cycle, with a specific focus on improper valuation and disclosure
• Identify important internal control activities present in a properly designed system to mitigate the risk of material misstatements for each relevant assertion in the finance and investment cycle
• Give examples of tests of controls to test the operating effectiveness of internal controls in the finance and investment cycle
• Give examples of substantive procedures in the finance and investment cycle and relate them to assertions about significant account balances at the end of the period
• Apply your knowledge to perform audit procedures in the finance and investment cycle and evaluate the findings of your tests

Chapter 11: Completing the Audit

• Identify major activities performed by auditors in completing the substantive procedures following the date of the financial statements
• Understand the role of attorney letters in evaluating litigation, claims, and assessments
• Explain why auditors obtain written representations and identify the key components of written representations
• Identify the final steps in the completion of an audit
• Understand auditors’ responsibility for subsequent events and subsequently discovered facts
• Identify important activities and communications following the completion of the audit and audit report release date

Chapter 12: Reports on Audited Financial Statements

• Understand the types of reports that accompany an entity’s financial statements and the content of the auditors’ standard (unmodified) report
• Identify situations in which language in the standard (unmodified) report is modified and the type of opinion issued in those situations
• Identify situations in which auditors add explanatory language to an unmodified opinion
• Understand the auditors’ responsibility for reporting on financial statements presented in comparative form
• Identify other reporting considerations related to GAAS audits
• Understand the contents of the auditors’ report for the financial statements of issuers (Appendix 12A)

Module A: Other Public Accounting Services As time allows (Covered briefly in Chapter 1, Included as time allows)

Module B: Professional Ethics

• Identify the different entities that make ethics rules for CPAs and public accounting firms
• With reference to American Institute of Certified Public Accounting (AICPA), Government Accountability Office (GAO), Public Company Accounting Oversight Board (PCAOB), and Securities and Exchange Commission (SEC) rules, analyze factual situations and decide whether an accountant’s conduct does or does not impair independence
• With reference to AICPA rules on topics other than independence, analyze factual situations and decide whether an accountant’s conduct does or does not conform to the AICPA Rules of Conduct
• Explain the penalties that can be imposed on accountants

Module C: Legal Liability

• Specify the civil and criminal liability provisions of the Securities Act of 1933
• Specify the civil and criminal liability provisions of the Securities Exchange Act of 1934
• Understand more current developments that affect auditors’ liability to clients and third parties

Module G: Data and Analytics in Auditing

• Understand the difference between data and analytics
• Identify situations in which audit data analytics can be used in gathering audit evidence
• Understand the steps that are taken in performing audit data analytics
• Understand the requirements for documentation of audit data analytics
• Identify some of the tools that can be used for performing audit data analytics

COMMON COURSE LEARNING OBJECTIVES/OUTCOMES:

Upon completion of ACNT 2331 the student shall:

Develop a thorough understanding of the attest function.

• Understand Generally Accepted Auditing Standards and the professional and ethical responsibilities of the independent public accountant.
• Understand risk assessment and its importance in the audit function.
• Demonstrate the ability to plan and document the planning of the audit including the initial risk assessment, calculation of materiality and preparation of audit programs.
• Understand the concepts, processes and assessment of internal control.
• Demonstrate knowledge of the substantiation of balances and collection of audit evidence and preparation of audit work papers.
• Understand and demonstrate the ability to report the results of the audit.
• Have knowledge of other attestation and assurance services performed by CPAs as well as other types of services, which independent auditors may or may not perform.
• Demonstrate the ability to research auditing and accounting issues and respond to current developments and changes in the accounting and auditing profession due to legislation, new pronouncements by regulatory and standard-setting bodies and forces of current events in the business world.
• Develop an understanding of the ethical decisions than an auditor must make in the conduct of the audit from the client acceptance phase throughout the audit to the reporting process.