San Diego State University
Charles W. Lamden School of Accountancy
ACCTG 421
Audit Module
Fall 2012
Instructor:
Office:
Office Hours:
E-mail:
Phone/text:
Jim Ledwith
SSE – 3445
Tuesday, 4:00PM – 5:30PM or by appointment
ledwithj@mail.sdsu.edu
(619) 990-2830
Welcome to ACCTG 421-Audit. Auditing will focus on the major concepts of
assurance services, risk, materiality and the accountant’s role in applying these concepts.
Much of what we do in this class will be based on your prior knowledge of accounting
principles, business transactions, financial reporting and managerial decision-making.
And much of what we do will involve your use of critical thinking and judgment skills.
This subject often appears easier than it is, so you must be vigilant, persistent and willing
to carefully analyze the evidence.
We will also learn how to recognize the ethical consequences of the choices and
decisions that are part of accounting. It is important for us to see that an ethical
dimension is part of every decision “the numbers” help inform. We cannot lose sight of
our professional and personal responsibilities to do “the right thing.”
BSBA Program Goals
BSBA students will graduate being:
 Effective Communicators
 Critical Thinkers
 Able to Analyze Ethical Problems
 Global in their perspective
 Knowledgeable about the essentials of business
ACCTG 421 – Audit Module contributes to these goals through the following student
learning outcomes.
Learning Outcomes
Auditing will focus on the following learning outcomes. For each topic we cover, we will
discuss how the related knowledge, skills and attitudes fit into these larger goals and
outcomes for your accounting program. But the more important discussion is one you
need to have with yourself, by asking how these outcomes will help you achieve your
professional goals. Bring your observations and questions to class. And another great
benefit…you may also find these discussions about goals and outcomes helpful in your
future interviews.
At the end of this course students should be able to:
1. Identify and define major concepts of assurance services, including risk,
materiality and professional standards.
2. Explain and model the accountants’ role in applying the concepts from (1).
3. Apply judgment and critical thinking to evaluate and communicate the reliability
of financial information.
4. Analyze evidence for competency and relevancy in relation to management’s
assertions.
5. Identify and analyze ethical consequences of choices and decisions made by
management and accountants.
PREREQUISITES:
Information and Decision Systems 390W; Finance 323; minimum grade of C in
Accountancy 322.
TEXTBOOKS
Required: Principles of Auditing & Other Assurance Services, 18th Ed., Whittington &
Pany, McGraw-Hill, 2011.
Whittington Website: Please make use of the text resources at the Online Learning
Center (OLC): http://www.mhhe.com/whittington18e . The text website has PowerPoint
slides, Multiple Choice Quizzes, Keystone Cases, ACL cases, and links to various audit
websites. The website is free to students and we will use it for much of our class work.
Recommended, not required, text: Gleim, Auditing & Systems Exam Questions and
Explanations.
GETTING READY FOR CLASS
The schedule identifies specific problems from each chapter that you should prepare as
you read and study the chapter materials. These problems and text publisher on line
quizzes are not graded. Use the problems to help you follow the readings and diagnose
where you have questions or are confused. Be ready to discuss your results and /or
questions in class. The solutions are posted to Bb, as a tool for you to figure out what you
know and, more important, still don’t know about the subject. If all you do is read the
solutions, they will make perfect sense and you will feel that you “know” the materials.
However, being familiar with the material, which you can get from just reading the
solutions, is NOT the same as understanding the material, which you can only get from
lots of hands on practice.
Professor Martha Doran developed the following guide that will make the textbook
reading process more active and more lasting.
“Here’s my Guide for How to Read and Get Ready for Class. It’s how I think you can
be successful in the course.
 Begin each chapter by starting at the back of the chapter. (Yes, you read right!)
 Read the Chapter Summary, the Key Terms and the Review Questions. Think
about any prior experience or knowledge you have that relates to the chapter. Jot
it down.
 Then take the MC Quiz (on line learning center – OLC). Pay attention to
concepts you know and don’t know.
 Now turn to the beginning of the Chapter and read through the Learning
Objectives. Compare these to your own experiences that you jotted down.
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At the same time, turn back to the HW Practice problems and see which
objectives you are assigned to practice. These are your focus in the chapter. Make
a check by the learning objectives and note the HW problem you will practice.
Work a specific problem as you finish with reading the objective(s) that relate to
that problem.
Compare your results with the posted solutions.
Make notes of questions you have.
Then, take the MC Quiz again.
Bring any questions or items you would like to share to class.
These steps will get your mind ready to make the new information your own (not
a RUT education, you know….Retain Until Test) and it will help you become a
better reader, by learning to use your critical thinking skills as you read.”
Learning Style Resource: Please use this website to explore your learning style and use
the results to help you be more successful in your life-long learning as an accounting
professional: http://www.vark-learn.com/english/page.asp?p=questionnaire
Professionalism/Class participation: Students are expected to treat this course in an
appropriate business manner which consists of two parts:
Being Prepared

Students are expected to come to class prepared

Students are expected not just to come to class but to also be prepared
to ask/answer questions.

I may cold call; answers indicating a lack of preparedness will result
in reduction to your course participation score
Acting Professionally

Observe class room policies

Observe e-mail policies

As far as grading of exams, use appropriate appeals process (see
below)

Acting professionally includes making appropriate comments, not
reading a newspaper, not text messaging, not using a laptop without
permission, not having side conversations, not e-mailing professor
inappropriately, and treating everyone with respect.
Academic Integrity
The SDSU Standards for Student Conduct (http://www.sa.sdsu.edu/srr/conduct1.html)
states that unacceptable student behavior includes “cheating, plagiarism, or other forms
of academic dishonesty that are intended to gain unfair academic advantage.”
Unprofessional conduct adversely impacts your fellow students, the accounting faculty,
the School of Accountancy, SDSU, and the accounting profession. The School of
Accountancy takes academic honesty very seriously and vigorously enforces university
policy related to any such infractions. As such, any student suspected of academic
dishonesty will be reported to the SDSU Center for Student Rights and Responsibilities;
if found responsible for academic dishonesty, the student will receive an F in ACCTG
421.
It is the responsibility of the student to sign the Honor Code pledge and turn it in to the
instructor by the third day of class. The student must write in full and sign the statement,
“I have neither given or received, nor will I give or receive, unauthorized aid on any
quizzes, assignments and examinations of ACCTG 421.”
COURSE ASSIGNMENTS
This course will include a variety of in and out-of-class assignments, individual cases,
group cases, quizzes, and exams. Being prepared and actively participating are key
ingredients to your success in this class. Graded assignments are noted on the course
schedule and are briefly summarized as follows:
Participation, Homework and Casework: Evidence of your voluntary participation has
three important components; timely class attendance, evidence of your preparation and
your active participation in the class discussions. Cases prepared out of class are due at
the beginning of class as noted in the schedule and will be scored based on your effort,
as well as your results. Late work is not accepted.
In addition, the results of your group work sessions (in addition to the graded Group
Cases) may be collected and reviewed for learning effort.
Quizzes: Four multiple-choice quizzes (15 questions each quiz) given on the dates noted
on the schedule. Each quiz will first be taken individually (worth 20%) and then as a
group (worth 10%). Bring a small Scantron 815-E. No Make-up Quizzes.
Group Cases: Three cases will be prepared by groups during class and turned in for a
grade, as noted on the schedule (worth 7.5%). No Make-up Cases.
Group Project: One out of class group project which your group will present on the last
day of class, along with a written report due at the same time (worth 7.5%).
Exams: Two exams (each worth 25%), as noted on schedule. No Make-up Exams.
As you can calculate, 75% of your points are earned from individual effort and 25% from
group effort.
Points Scoring: The table below converts these percentages to points.
Category
Participation, Homework and Casework
Quiz 1 Individual
Quiz 1 Group
Quiz 2 Individual
Quiz 2 Group
Quiz 3 Individual
Quiz 3 Group
Quiz 4 Individual
Percent
5.0%
5.0%
2.5%
5.0%
2.5%
5.0%
2.5%
5.0%
Points
30
30
15
30
15
30
15
30
Quiz 4 Group
Group Case 1
Group Case 2
Group Case 3
Group Presentation Project
Exam No. 1
Exam No. 2
Total
2.5%
2.5%
2.5%
2.5%
7.5%
25.0%
25.0%
100%
15
15
15
15
45
150
150
600
Graded Exams and Assignments Review Policy
Graded exams and assignments will be posted on the Blackboard. If you have questions
or disputes over the score you received, you are required to promptly raise the question or
dispute within 5 days of the posting of the score. All assignments will be returned to you.
Quizzes, tests and exams can be reviewed during office hours, but will not be returned.
Unclaimed work will be disposed of on the last day of the semester.
Final Grades
Your final course grade will be a combined grade based on your performance in both
managerial accounting (MA) and auditing (AU). Generally, depending on the
performance of the class for the semester, your final combined weighted average raw
score will be converted to a standardized scale of 0-100% using a consistent mean and
standard deviation as determined appropriate and necessary for the semester. The mean
is expected to approximate a 78%. YOU MUST PASS BOTH SECTIONS TO RECEIVE
A PASSING GRADE FOR THE COURSE, I.E., IF YOU RECEIVE AN F FOR AN
INDIVIDUAL SECTION YOU WILL RECEIVE AN F FOR THE OVERALL
COURSE.
Syllabus
This course syllabus is an important document to you. It is your responsibility to obtain a
copy of course syllabus and to understand all the information in it. The instructor
reserves the right to make changes on the syllabus as the session proceeds.
E-mail Policy
If you need to contact me through e-mail, please follow the following guidelines.
1) All inquiries should be sent to ledwithj@mail.sdsu.edu or jledwith@jhcohn.com.
2) Include your full name, section and subject information. An example for the first
quiz is as follows: Jim Ledwith Quiz#1, 1pm.
3) For help with questions and problems, before e-mailing me you should:
1) Check the syllabus, lecture PowerPoint slides and Blackboard
2) Check with your study partners
3) E-mail Professor (for an answer or appointment)
Student with Disabilities
Any student with a documented disability needing academic adjustments or
accommodations is requested to speak with me by appointment as soon as possible. All
discussions will remain confidential.
Acctg. 421 AUDITING Schedule
Fall 2012
The following is the schedule for required readings, suggested practice problems and graded assignments.
I reserve the right to change or modify this schedule, based on my on-going analysis of the needs of the
class. Any changes will be announced in class and posted to Blackboard.
Class
Meeting &
Dates
Required Readings & Suggested HW
Practice
1-Tuesday
8/28/2012
2-Tuesday
9/4/2012
Chapter 1: Role of the Public Accountant
In-class: 1-28, 1-30
Chapter 2: Professional Standards
Chapter 3: Professional Ethics
Quiz 1(Chapters1, 2, 3)
Chapter 4: Legal Liability
Begin Chapter 5: Audit Evidence and
Documentation
None
4-Tuesday
9/18/2012
5-Tuesday
9/25/2012
Complete Chapter 5
Group Case 1
Chapter 6: Audit Planning & Risks
Quiz 2 (Chapters 4, 5, 6)
HW: 5-52, 5-54
GC1
HW: 6-24, 6-32, 6-36,
Q2
6-Tuesday
10/2/2012
Chapter 7: Internal Control
Chapter 8: IT Controls
HW: 7-31, 7-35, 7-41
HW: 8-32
3-Tuesday
9/11/2012
To Be Turned In
(Principles of Auditing & Assurance Services,
Whittington & Pany, 17th edition)
7-Tuessday Review for Exam No. 1
10/9/2012
Exam No. 1
8-Friday
10/12/2012
HW 2-32,2-33, 2-36
HW 3-33, 3-34, 3-43
Q1
HW 4-31, 4-35
Exam No. 1: Chapters 1-8
9-Tuesday
10/16/2012
10Tuesday
10/23/2012
Chapter 9: Audit Sampling
Group Case 2
Chapter 10: Cash & Investments
Chapter 11: Accts. Rec & the Revenue
Process
HW: 9-41, 9-43a-d, 9A11a-c
GC2
HW: 10-35, 10-37
HW: 11-36,11-39,11-42
11Tuesday
10/30/2012
Chapter 12: Inventories
Chapter 14: Accts. Payable and other
liabilities
Quiz 3 (Chapters 10,11,12 & 14)
HW: 12-43
HW: 14-37, 14-39, 14-41
Q3
12Tuesday
11/6/2012
Chapter 15: Debt and Equity Capital
Chapter 16: Auditing Operations &
Completing the Audit
Group Case 3
Chapter 17: Auditors’ Reports
Quiz 4 (Chapters 15, 16 & 17)
HW: 15-32, 15-35
HW: 16-30, 16-37,16-45
Chapter 18: Integrated Audits of Public Cos
HW: 18-29, 18-31
13Tuesday
11/13/2012
14Tuesday
11/20/2012
GC3
HW: 17-27, 17-35,17-36
Q4
Optional-Tuesday
11/27/2012
15-Friday
11/30/2012
Review Chapters 10, 11, 12, 14, 15, 16, 17
& 18
16Tuesday
12/4/2012
17Tuesday
12/11/2012
Group Presentation: Audit Proposal for
San Diego Based Public Company
Exam No. 2
Course suggestions
Exam No. 2: Chapters 10,
11, 12, 14, 15, 16, 17 and
18
Written Documentation &
Group Presentation
Suggestions for improvements in the course to be
handed in