AUDITING
ACCT 2810
3 Credit Hours
COURSE INFORMATION
Course Description:
This course is a study of auditing theory and procedures with emphasis on areas
of deviation from acceptable accounting principles and on problems that auditors
encounter in preparing an audit report. Topics discussed include verifying
accounting data, preparing reports, and examining auditor liability in the
preparation of financial statements.
Student Learning Outcomes:
1. Define the objective of auditing and describe the role of auditing in meeting society’s
demands for unbiased financial and internal control information.
2. List the types of audit services providers and the knowledge needed by professionals
entering the public accounting profession.
3. Identify organizations that affect the public accounting profession and the nature of
their effects.
4. Identify the various auditing standards that affect the public accounting profession and
compare these auditing standards on relevant dimensions.
5. Describe the audit opinion formation process and list key steps in that process.
6. Identify and describe non-audit assurance and attestation services provided by external
auditors and discuss the relevant professional standards.
7. Describe the unique roles of internal auditors and governmental auditors.
8. Describe why ethical behavior by auditors is required to justify the public’s trust.
9. Describe ethical theories that can be used in addressing ethical problems.
10.Describe and apply the AICPA’s Code of Professional Conduct.
11.Discuss the importance of independence to the public accounting profession.
12.Discuss the major threats to independence and approaches to mitigate those threats.
13.Identify the various types of risk relevant to conducting an audit.
14.Describe how audit firms manage engagement risk by making high-quality client
acceptance and retention decisions.
15.Discuss the relevance of materiality in an audit context, and articulate the relationship
between materiality and audit risk.
16.Describe the audit risk model and its components.
17.Use the audit risk model to plan the nature of procedures to be performed on an audit
engagement.
18.Use preliminary analytical techniques to identify areas of heightened risk of
misstatement.
19.Articulate the underlying principles of an effective control environment.
20.Identify common internal control activities found in many organizations.
21.Describe components contained in management reports on internal control over
financial reporting.
22.Describe the process that external auditors use to assess internal controls.
23.Describe the nature of documentation the auditor develops to support the understanding
and assessment of internal control.
24.Discuss the requirements of the professional auditing standards related to the
performance of integrated audits of internal control over financial reporting and audits
of financial statements.
25.Describe external audit reports on internal control over financial reporting.
26.Describe the steps in performing an integrated audit.
27.Identify the potential outcomes concerning the results of control testing and their
implications for subsequent substantive tests of account balances.
28.Identify the overall framework by which audit evidence is identified, gathered,
evaluated, and documents.
29.Describe financial statement assertions and how the assertions drive the choice of
evidence to be gathered.
30.Describe factors that affect the appropriateness and sufficiency of audit evidence.
31.Identify basic audit procedures and they relate to evaluating underlying financial
statement assertions.
32.Explain the nature, design, and purposes of audit programs.
33.List and describe the tools used by auditors to gather and evaluate audit evidence.
34.Explain the risks associated with sampling procedures and the nature of inferences
required of all audit procedures.
35.Describe attribute sampling and use it to test controls.
36.Discuss the use of, and apply, analytical procedures as a substantive test of account
balances and describe how analytical procedures complement and affect other
approaches to gathering audit evidence.
37.Define the various types of fraud that affect organizations.
38.Describe the auditor’s evolving responsibility for fraud detection and high-profile
frauds that have affected the design and execution of audits.
39.Describe auditing standards and procedures that reflect a responsibility to detect fraud.
40.Describe the auditor’s responsibility to report fraud and illegal activities.
41.Distinguish between forensic accounting and auditing.
42.Explain the concept of accounting cycles or processes and their impact on audit
approaches and identify the accounts and relevant assertions in the revenue cycle.
43.Identify risks to reliable financial reporting in the revenue cycle, including fraud risks
and other risks related to proper revenue recognition.
44.Describe how to use preliminary analytical procedures to identify possible
misstatements in the revenue cycle.
45.Articulate and apply standard substantive audit procedures applicable to testing revenue
balances and accounts receivable balances and explain how these procedures will be
impacted by the results of the tests of controls.
46.Describe audit procedures for the revenue cycle that address fraud risk.
47.Describe the activities, accounts, and assertions included in the payment and acquisition
cycle.
48.Identify risks to reliable financial reporting in the acquisition and payment cycle and
discuss relevant fraud considerations in the acquisition and payment cycle.
49.Describe how to use preliminary analytical procedures to identify possible
misstatements in the accounts and assertions related to the acquisition and payment
cycle.
50.Describe why it is important for the auditor to develop an understanding of internal
controls, identify controls typically present in the acquisition and payment cycle, and
identify tests of controls used to test the effectiveness of controls in this cycle.
51.Describe the substantive audit procedures that should be used to test accounts payable
and related expense accounts and assertions in the acquisition and payment cycle.
52.Describe the substantive audit procedures that should be used to test inventory and cost
of goods sold.
53.Summarize and resolve detected misstatements.
54.Describe the process by which audit firms make client continuance decisions.
55.Review the adequacy of disclosures.
56.Conduct a final analytical review of the financial statements.
57.Review subsequent events that occur after the balance sheet date and assess proper
treatment.
58.List and apply the steps involved in assessing the going-concern assumption.
59.Identify issues to communicate to the audit committee.
60.Identify issues to communicate to management via a management letter.
61.Describe the levels of assurance that an auditor may provide when associated with
various auditor services and auditor reports.
62.Describe the information that is included in an audit report.
63.Identify the types of audit opinions and the circumstances in which each type is
appropriate.
64.Explain the differences among audit, review, and compilation engagements in terms of
procedures performed, degree of responsibility taken by the accountant, and reports
rendered.
65.Describe various attestation engagements and the types of reports that will be issued
for these engagements.
66.Discuss the liability environment in which auditors operate, the factors that have led to
increased litigation against auditors, and the effects of lawsuits on audit firms.
67.Explain the impact of key court cases on the public accounting profession.
68.Discuss emerging and unsettled liability issues of concern to auditors.
69.Identify professional requirements that help assure audit quality and minimize auditor
exposure to liability suits.
Prerequisites:
ACCT 1020 or permission of the Business & Technology Department Chair.
Course Outline/Topics:
Week
Content to be Covered
Assignments
1
Introduction to the course
Post introduction to discussion board
2
Chapter 1—Auditing: Integral to the
Economy
Read Chapter 1
Homework as assigned
3
Chapter 3—Judgment and Ethical DecisionRead Chapter 3
Making Frameworks and Associated
Homework as assigned
Professional Standards
4
Chapter 17—Professional Liability
Read Chapter 17
Homework as assigned
Exam 1 (Ch. 1, 3, 17)
Chapter 4—Audit Risk, Business Risk, and
Audit Planning
Read Chapter 4
Homework as assigned
Chapter 5—Internal Control over Financial
Reporting
Read Chapter 5
Homework as assigned
7
Chapter 6—Performing an Integrated Audit
Read Chapter 6
Homework as assigned
8
Exam 2 (Ch. 4-6)
Chapter 7—A Framework for Audit
Evidence
Read Chapter 7
Homework as assigned
9
Chapter 8—Tools to Gather Audit Evidence
Read Chapter 8
Homework as assigned
10
Chapter 9—Auditing for Fraud
Read Chapter 9
Homework as assigned
11
Exam 3 (Ch. 7-9)
Read Chapter 10
Chapter 10—Auditing Revenue and Related
Homework as assigned
Accounts
12
Chapter 11—Audit of Acquisition and
Payment Cycle and Inventory
Read Chapter 11
Homework as assigned
13
Chapter 15—Ensuring Audit Quality in
Completing the Audit
Read Chapter 15
Homework as assigned
14
Chapter 16—Auditors’ Reports
Read Chapter 16
Homework as assigned
15
Final Exam (Ch. 10, 11, 15, 16)
5
6
Special Course Requirements:
Homework assignments must be completed using a word processing package,
preferably Microsoft Word.
TEXTBOOKS, SUPPLEMENTARY MATERIALS, HARDWARE/SOFTWARE
REQUIREMENTS
Required Textbook(s):
Auditing: A Business Risk Approach, 8th edition, Rittenberg, Johnstone, & Gramling,
South-Western. This book can be purchased from MSCC online bookstore. A link
is provided at the college’s homepage.
Supplementary Materials:
None.
Hardware/Software Requirements:
In an online class, a reliable internet connection is a necessity. Students must use a
current a web browser that is compatible with D2L. To ensure that full
compatibility, students should complete the systems check found on the
Desire2Learn login screen. Additionally, students must have Adobe Reader
software which can be downloaded free of charge from www.Adobe.com.
INSTRUCTOR INFORMATION
Please see the course homepage for instructor contact information.
ASSESSMENT AND GRADING
Quizzes
Discussion postings
12%
12%
Cases
Exam I
Exam II
Exam III
Final
12%
16%
16%
16%
16%
100%
Grade Scale:
90 – 100
80 – 89
70 – 79
60 – 69
Below 60
A
B
C
D
F
ASSIGNMENTS AND PROJECTS
Weekly required discussion postings will consists of end-of-the chapter review
questions. Due dates for all assignments will be on Tuesdays at 9:00 a.m.
Additionally, students will be required to respond to four auditing cases in the
form of a written report. For a specific schedule, see Course Outline/Topics
above.
PARTICIPATION
Regular participation is a must for success in this class; students need to be
logging in regularly, completing assignments, and asking questions in order to
master the skills presented in this course.
As in any online course, the bulk of the communication for this class will be
written. We will communicate with each other through email and the discussion
board. If you wish to speak directly to the instructor, you may phone the number
provided on the homepage and leave a message or email the instructor with a
request to call you and she will respond as soon as possible.
The course will observe regularly scheduled breaks and holidays; no assignments
will be due on those days, and the instructor will not necessarily be available to
you. We will not alter our schedule for inclement weather day.
PUNCTUALITY
Students are solely responsible for watching the schedule and submitting
assignments and taking quizzes in a timely manner. The due dates for all
assignments are included in the course outline on the homepage. The common
due date is Tuesdays at 9:00 a.m. Late assignments will be penalized 30% per
day or partial day they are late. You are expected to manage your time wisely
and be prepared for contingencies. Technical difficulties on your end do not
excuse you from having to turn work in on time.
COURSE GROUND RULES
Student integrity: You are required to do your own work at all times. You are
permitted to post discussion questions asking for help on homework, but the final
work must be your own. You may not discuss quizzes, exams, or any other
assignments with other students prior to the deadline for these assignments. Any
breach of these rules constitutes cheating, and cheaters will receive an F for the
course.
GUIDELINES FOR COMMUNICATIONS
Email:
•
•
•
•
•
•
•
Always include a subject line.
If you are responding to a previous email, always use the Quote feature which
copies the previous email into the body of the message. Your instructor
communicates with many, many students throughout the course of the
semester, and will not necessarily remember what you are talking about
without the prior context.
Remember, without facial expressions some comments may be taken the
wrong way. Please be considerate of others’ feelings and be careful in
working your emails.
Use standard fonts.
Do not send extremely large attachments without prior permission.
Use standard formatting unless necessary to complete an assignment or
special communication.
Respect the privacy of other class members.
Discussion Groups:
•
•
•
•
•
•
•
•
Review the discussion threads thoroughly before entering the discussion.
Try to maintain threads by using the “Reply” button rather than starting a new
topic.
Do not make insulting or inflammatory statements to other members of the
discussion group.
Be respectful of other’s ideas.
Be patient and read the comments of other group members thoroughly before
responding.
Be cooperative with group leaders in completing assigned tasks.
Be positive and constructive in group discussions.
Respond in a thoughtful and timely manner.
LIBRARY
The Crouch Library at Motlow College is available to all students enrolled at the
college. Links to library materials, e.g., electronic journals, databases,
interlibrary loans, digital reserves, dictionaries, encyclopedias, maps, and library
support services, are available at www.mscc.edu/library/index.html
STUDENTS WITH DISABILITIES
If you have a documented disability, you can arrange for accommodations by
contacting the Office of Disability Services at 931.393.1765 or by e-mail at
shood@mscc.edu. Students needing academic accommodations are required to
register with Disability Services and provide required disability related
documentation. Although you may request an accommodation at any time, we
recommend that you do so at the beginning of the semester. The Office of Disability
Services is strongly committed to the needs of student with disabilities.
SYLLABUS CHANGES
The instructor reserves the right to make changes as necessary to this syllabus. If
changes are required during the term, the instructor will immediately notify
students of such changes both by individual email communications and by
posting both the notification and the nature of the change(s) on the course
bulletin board.
TECHNICAL SUPPORT
If you are having problems logging into your course, timing out of your course,
using your course web site tools, or other technical problems, please contact the
MSCC Technology Help Desk at
1-800-654-4877 (toll free), Ext. #1510.
or go to the Help Desk website at:
mailto:d2lhelp@mscc.edu