BISHOP’S UNIVERSITY
WILLIAMS SCHOOL OF BUSINESS
Course:
Professor:
Office:
Email:
Office hours:
BAC 341- AUDITING / WINTER 2005
Camille Lessard, CA, M. fisc.
H-217 (822-9600/ extension 2479)
clessard@ubishops.ca
M/W: 15:00 - 16:30
COURSE OBJECTIVES:
This course will introduce students to the concept of internal control and
fundamentals of auditing. Topics include: legal and moral responsibilities of the
auditor, controls required in principal accounting systems, selection of appropriate
audit techniques and preparation of audit reports.
GRADING SCHEME:
Tests (2)
Cases and class participation
Final examination
30 %
30 %
40 %
100 %
NOTE:
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·
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Tests and examinations will cover all work completed to date;
Assignments are due at the start of the class indicated. Late assignments will not
be accepted; all papers should be typed;
You need at least 50 % in total in the final examination to pass the course;
No supplemental (tests or examination).
TEXT:
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Arens, Alvin J., Loebbecke, James, Lemon, Morely and Splettstoesser, Ingrid,
Auditing and Other Assurance Services, Canadian 9th Edition, Toronto: Prentice
Hall.
CICA Handbook.
Course material on the R-drive
Hand-outs.
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CONTENTS
I.
INTRODUCTION
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Auditing: a definition
Practice standards for public accountants
Quality control
References: II.
THE AUDITOR’S REPORT
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The format of the report and GAAS
Types of audit reports
9 special circumstances
References:
III.
- Chapter 2
- CICA Handbook, sections 1300, 3290, 5400, 5405, 5510,
5600, 5701, 5049, 5365, 6930, 7500
PROFESSIONAL ETHICS
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What are ethics?
Rules of Professional Conduct
References:
-
IV.
Chapter 1; chapter 23 (p. 678 to 686)
CICA Handbook sections 5020, 5025, 5090, 5100
CA Magazine, December 2003
Chapter 3
CICA Handbook 5751, 5135
“A Principles-based Approach” CA Magazine (November
2003)
CICA, Guide to New Independence Standard, October 2003
Rules of Professional Conduct 204.1 and following
AUDIT RESPONSIBILITIES AND OBJECTIVES
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Audit responsibilities (error, illegal acts, fraud)
Audit Objectives (the cycle approach; the strategic systems approach)
References:
- Chapter 5
- CICA Handbook sections 5135, 5136, 5305, 5750, 5751
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V.
AUDIT EVIDENCE
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Evidence accumulation: basic concepts
Types of audit evidence
Analytical Procedures
References:
VI.
AUDIT PLANNING AND DOCUMENTATION
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Preplan
Obtaining Background Information
Obtaining Information About legal obligations
Performing Preliminary Analytical Procedures
Documentation
References:
VII.
- Chapter 6
- CICA Handbook sections 5145, 5300, 5301, 5303, 5305, 5306
- Chapter 7
- CICA Handbook sections 5100, 5150, 5140, and 5145
MATERIALITY AND RISK
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The Concept of Materiality
The audit risk Model
References:
- Chapter 8
- CICA Handbook, section 5130, 5305
- AuG-31- Applying materiality and audit risk concepts
in conducting an Audit
VIII. THE STUDY OF INTERNAL CONTROL
(MANUAL AND COMPUTER-BASED SYSTEMS)
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Internal control: definition and elements
Obtaining an understanding of internal control
Assessing control risk and planning the audit strategy
Auditing in a computer environment
References:
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Chapters 9 and 22
CICA Handbook sections 5200 to 5220, 5050
AuG 32 to 38
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IX. THE AUDIT PROGRAM AND AUDIT SAMPLING CONCEPTS
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The Audit Program
Audit sampling concepts
References:
X.
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Chapter 10 (p. 285 to 288; 293 to 297)
Chapter 11
AUDIT OF THE SALES AND COLLECTION CYCLE: TESTS OF
CONTROL
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Overview of the cycle
Flowcharts : manual and computer-based systems
Lapping
I.C. procedures, control risk and tests of controls
Controls in a computerized environment
References:
XI.
- Chapter 12
COMPLETING THE TESTS IN THE SALES AND COLLECTION
CYCLE
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Using analytical procedures
Tests of details of balances: A/R and AFDA
Confirmation of Accounts Receivable
References:
- Chapters 14 (p. 427 to 447)
XII.
COMPLETING THE AUDIT
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Contingent Liabilities
Commitments
Review for Subsequent Events
Accumulating Final Evidence
References:
- Chapter 21
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XIII. CASES (Audit of other cycles: payroll and personnel, acquisition and
payment, inventory and warehouse cycle)
References:
XIV.
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- Chapters 15, 16 and 18
ATTEST ENGAGEMENTS
Review and Compilation Services
Selected Attest Reports
References:
- Chapter 23
- CICA Handbook sections 5805, 5815, 8100, 8200, 8500,
8600, 9100, 9200
SELECTED WEB SITE REFERENCES
CA Magazine- http://www.camagazine.com/cica/camagazine.nsf/public/index
CGA Magazine- http://www.cga-canada.org/eng/magazine/
CMA Magazine- http://www.managementmag.com
CICA- http://www.cica.ca
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CASES AND TESTS
Cases
Due Date
Work required from all students
The Trolley Dodgers
(Payroll and personnel)
April 4, 2005
Read chapter 15
Case/ hand in:
· 7 line summary
· 5 key facts
The Lakeside story
(Acquisition and payment)
April 6, 2005
Read chapter 16
Case:
· Obtain a good
understanding of exhibit
6-1
· Hand in your comments
on “comments” A, B, C
Goodner Brothers, Inc.
April 11, 2005
(Inventory and warehousing)
Read chapter 18
Case/ hand in:
· 10 key facts
Tests
Test 1
February 14, 2005
Test 2
March 21, 2005
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