COURSE MASTER SYLLABUS
AUSTIN COMMUNITY COLLEGE – Term:_____
Internal Controls and Auditing
ACNT 2331-Section____ (Synonym _____)
Lecture: (3 Hrs) Course dates and times
Room: Course location
Office hours: Office hour times and location; Please contact the instructor if you wish to meet outside of regular office hours
Blackboard site: http://acconline.austincc.edu
PREREQUISITE: ACNT 2304
METHOD OF PRESENTATION: Three hour lecture/discussion each week
CATALOG DESCRIPTION: A study of internal control and auditing standards and processes used by internal auditors, managers and independent public accountants. Includes responsibilities of auditors, developments of audit programs, accumulation of audit evidence and reporting.
OTHER: Basic computer skills utilizing the internet, spreadsheets, word-processing and presentation software are required for this course. Generally all assignments are to be prepared on the computer and presented in a format that would be acceptable that is appropriate in a business environment. Access to computers is available at the college.
COURSE RATIONALE: The goals and objectives of this course prepare students for (1) completing degree requirements; (2) obtaining or improving job skills; (3) qualifying for a business or accounting job; (4) working as an entrepreneur; (5) fulfilling personal goals; and/or (6) understanding the auditing discipline
INSTRUCTIONAL METHODOLOGY: The objectives of this course will be met by incorporating a variety of instructional methods. These include a combination of lecture, class quizzes, class exams, homework, simulations, research activities, and projects.
SCANS COMPETENCIES: SCANS is the Secretary's Commission on Achieving Necessary Skills. Please go to http://www.austincc.edu/mkt/scans.htm#whatis for complete definitions and explanation of SCANS. This list summarizes the SCANS Competencies addressed in this particular course.
· Manages Time: Selects relevant, goal-related activities, ranks them in order of importance, allocates time to activities, and understands, prepares and follows schedules.
· Acquires and Evaluates Information: Identifies needs for data, obtains it from existing sources or creates it, and evaluates it relevance and accuracy.
· Responsibility: Exerts a high level of effort towards goal attainment. Works hard to become excellent at doing tasks by setting high standards, paying attention to details, working well and displaying a high level of concentration even when assigned an unpleasant task. Displays high standards of attendance, punctuality, enthusiasm, vitality, and optimism in approaching and completing tasks.
PROGRAM-LEVEL STUDENT LEARNING OUTCOMES: Upon successful completion of the Accounting program, students will be able to:
· Complete degree requirements
· Obtain or improve job skills
· Satisfy educational requirements for CPA exam
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.
LEARNING OBJECTIVES (These are derived from the text and are edited for changes in the auditing and accounting profession though the publication of the syllabus)
Chapter 1: Auditing & Assurance Services
· Define information risk and explain how auditing and assurance services play a role in reducing this business risk
· Define and contrast auditing, attestation, and assurance series
· Describe and define the management assertions embodied in financial statements and explain why auditors use them as a focal point of the audit
· Explain some characteristics of professional skepticism
· 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
Chapter 2: Professional Standards
· Name the various practice standards for internal, governmental, and independent auditors and public accounting firms and identify their sources
· Understand generally accepted auditing standards (GAAS) and explain how GAAS affect the audit team’s responsibilities
· Describe how the audit examination is affected by the fundamental principles of responsibilities and performance
· Understand the 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: Management Fraud and Audit Risk
· Define and explain the differences among several types of frauds, errors, and illegal acts that might occur in an organization
· Explain auditors’ responsibilities with respect to detecting and reporting fraud
· List and explain some conditions that can lead to fraud
· Explain auditors’ responsibilities with respect to illegal acts
· Describe the conceptual audit risk model and explain the meaning and importance of its components in terms of professional judgment and audit planning
· Define materiality and explain its relationship to the audit risk model
· List and describe eight general types of audit procedures for gathering evidence
· Describe the content and purpose of an audit plan
Chapter 4: Engagement Planning
· List and describe the activities that auditors undertake before beginning and engagement
· Identify the procedures and sources of information auditors may use to obtain knowledge of a client’s business and industry
· Perform analytical procedures to identify potential misstatements
· Review audit documentation for proper form and content
Chapter 5: Risk Assessment: Internal Control Evaluation
· Distinguish between management’s and auditors’ responsibilities regarding an entity’s internal control
· Define and describe internal control and explain the limitations of all internal control systems
· Define and describe the five basic components of internal control and specify some of their characteristics
· Explain the phases of an evaluation of control and risk assessment and the documentation and extent of audit work required
· Describe additional responsibilities for management and auditors of public companies required by Sarbanes-Oxley and Auditing Standard No. 5
· List the major components of the auditors’ report on internal control over financial reporting
· Describe situations in which the auditors’ report on internal control over financial reporting
· 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 in an entity
· List and explain some conditions that can lead to frauds
· Describe ways and means for preventing employee frauds
· Describe the controls over the receipt and disbursement of cash
· Design and perform substantive procedures for the audit of cash
· Discuss actual cash fraud cases and describe how the schemes were uncovered
· Describe some extended procedures for detecting employee fraud schemes involving cash
Chapter 7: Revenue and Collection Cycle
· Discuss inherent risks related to the revenue and collection cycle with a focus on improper revenue recognition
· Describe the revenue and collection cycle, including typical source documents and control procedures
· Give examples of tests of controls over customer credit approval, delivery, and recording of accounts receivables
· 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
· Describe some common errors and frauds in the revenue and collection cycle and design some audit and investigation procedures for detecting them
Chapter 8: Acquisition and Expenditure Cycle
· Identify significant inherent risks in the acquisition and expenditure cycle
· Describe the acquisition and expenditure cycle, including typical source documents and controls
· Give examples of tests of controls over purchases of inventory and services
· Explain the importance of the completeness assertion for the audit of accounts payable and list some procedures for a search for unrecorded liabilities
· Discuss audit procedures for other accounts affected by the acquisition and expenditure cycle
· Specify some ways fraud can be found in accounts payable and cash disbursements
· Describe some common errors and frauds in the acquisition and expenditure cycle and design some audit and investigation procedures for detecting them
· Describe the payroll cycle, including typical source documents and controls
Chapter 9: Production Cycle
· Describe the production cycle, including typical source documents and controls
· Give examples of tests of controls over conversion of materials and labor in a production process
· Identify and describe considerations involved in the observation of physical inventory and tests of inventory pricing and compilation
· Describe some common errors and frauds in the accounting for production costs and related cost of goods sold and design some audit and investigation procedures for detecting these errors and frauds
Chapter 10: Finance and Investment Cycle
· Describe the finance and investment cycle, including typical source documents and controls
· Give examples of tests of controls over debt and stockholders’ equity transactions and investment transactions
· Describe substantive procedures for finance and investment accounts
· Describe common errors and frauds in the accounting for investment and financing transactions and investments, and design audit and investigation procedures for detecting them
Chapter 11: Completing the Audit
· Describe the approach used to examine major revenue and expense accounts
· Identify procedures performed by auditors to evaluate contingencies, including the use of an attorney letter, during the completion of the audit
· Explain why auditors obtain management representations and identify the key components of management representations
· Identify the two major categories of subsequent events and describe the proper handling of these events by auditors
· Identify the final steps in the completion of an audit
· Following the audit report release date, identify auditors’ responsibilities for (1) facts that may have existed at the date of the auditors’ reports and (2) omitted audit procedures
· Summarize important communications made by auditors following completion of the audit and audit report release date
Chapter 12: Reports on Audited Financial Statements
· Provide an overview of the types of reports that accompany an entity’s financial statements
· List three general functions of the auditors’ report on an entity’s financial statements
· Explain the significance of each of the paragraphs in the auditors’ standard report on an entity’s financial statements
· Describe the types of auditors’ reports that may be issued if an entity’s financial statements contain a departure from GAAP
· Describe the types of auditors’ reports that may be issued if auditors are unable to comply with generally accepted auditing standards
· Describe how the standard report is modified when auditors issue unqualified opinions but reference other matters affecting the audit or the client
· Identify other circumstances affecting auditors’ reporting responsibilities and explain how they affect auditors’ reports on an entity’s financial statements
Module A: Other Public Accounting Services- As time allows (Covered briefly in Chapter 1)
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
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 recent developments that affect auditors’ liability to clients and third parties
Module D: Internal, Governmental, and Fraud Audits
· Define internal auditing, describe internal audit institutions (e.g., IIA); describe how internal auditors interact with independent auditors; explain internal auditors’ independence problems; and list features of internal audit reports
· Define governmental auditing; describe governmental audit institutions (e.g., GAO); describe how governmental auditors interact with independent auditors; explain governmental auditors’ independence problems; and list features of governmental audit reports
· Explain the function of standards and measurements in economy, efficiency, and program results audits
· Define fraud auditing and describe various engagements performed by fraud auditors
Module E: Overview of Sampling
· Understand the basic principles of sampling, including the differences between statistical and non statistical sampling and sampling and non sampling risk
· Understand the basic steps and procedures used in implementing a sampling plan
· Identify the two situations in which sampling is used in an audit examination
· Understand how the basic steps and procedures used in a sampling plan apply to an audit engagement
Module F: Attributes Sampling- As time allows (Covered in Module E)
Module G: Variables Sampling- As time allows (Covered in Module E)
Module H: Information Systems Auditing
· List and describe the general and application controls in a computerized information system
· Explain the differences between auditing around the computer and auditing through the computer
· Define and describe computer fraud and the controls that can be used to prevent it
COURSE GRADING, BASIS FOR GRADING:
Activity (Percent)- See the section syllabus for more details
Class Activities/ Simulations/ Research/ Homework (5-25%)
Regular and punctual class and laboratory attendance is expected of all students. If attendance or compliance with other course policies is unsatisfactory, the instructor may withdraw students from the class. See the section syllabus for more details.
It is the responsibility of each student to ensure that his or her name is removed from the roll should he or she decide to withdraw from the class. The instructor does, however, reserve the right to drop a student should he or she feel it is necessary. If a student decides to withdraw, he or she should also verify that the withdrawal is submitted before the Final Withdrawal Date. The student is also strongly encouraged to retain their copy of the withdrawal form for their records. See the section syllabus for more details.
Students who enroll for the third or subsequent time in a course taken since Fall, 2002, may be charged a higher tuition rate, for that course.
State law permits students to withdraw from no more than six courses during their entire undergraduate career at Texas public colleges or universities. With certain exceptions, all course withdrawals automatically count towards this limit. Details regarding this policy can be found in the ACC college catalog.
An instructor may award a grade of “I” (Incomplete) if a student was unable to complete all of the objectives for the passing grade in a course. An incomplete grade cannot be carried beyond the established date in the following semester. The completion date is determined by the instructor but may not be later than the final deadline for withdrawal in the subsequent semester. See the section syllabus for more details.
Statement on Scholastic Dishonesty
A student attending ACC assumes responsibility for conduct compatible with the mission of the college as an educational institution. Students have the responsibility to submit coursework that is the result of their own thought, research, or self-expression. Students must follow all instructions given by faculty or designated college representatives when taking examinations, placement assessments, tests, quizzes, and evaluations. Actions constituting scholastic dishonesty include, but are not limited to, plagiarism, cheating, fabrication, collusion, and falsifying documents. Penalties for scholastic dishonesty will depend upon the nature of the violation and may range from lowering a grade on one assignment to an “F” in the course and/or expulsion from the college. See the Student Standards of Conduct and Disciplinary Process and other policies at http://www.austincc.edu/current/needtoknow
Student Rights and Responsibilities (Academic Freedom)
Students at the college have the rights accorded by the U.S. Constitution to freedom of speech, peaceful assembly, petition, and association. These rights carry with them the responsibility to accord the same rights to others in the college community and not to interfere with or disrupt the educational process. Opportunity for students to examine and question pertinent data and assumptions of a given discipline, guided by the evidence of scholarly research, is appropriate in a learning environment. This concept is accompanied by an equally demanding concept of responsibility on the part of the student. As willing partners in learning, students must comply with college rules and procedures.
Statement on Students with Disabilities
Each ACC campus offers support services for students with documented disabilities. Students with disabilities who need classroom, academic or other accommodations must request them through the Office for Students with Disabilities (OSD). Students are encouraged to request accommodations when they register for courses or at least three weeks before the start of the semester, otherwise the provision of accommodations may be delayed.
Students who have received approval for accommodations from OSD for this course must provide the instructor with the ‘Notice of Approved Accommodations’ from OSD before accommodations will be provided. Arrangements for academic accommodations can only be made after the instructor receives the ‘Notice of Approved Accommodations’ from the student.
Students with approved accommodations are encouraged to submit the ‘Notice of Approved Accommodations’ to the instructor at the beginning of the semester because a reasonable amount of time may be needed to prepare and arrange for the accommodations.
Additional information about the Office for Students with Disabilities is available at http://www.austincc.edu/support/osd/
Austin Community College is committed to providing a safe and healthy environment for study and work. You are expected to learn and comply with ACC environmental, health and safety procedures and agree to follow ACC safety policies. Additional information on these can be found at http://www.austincc.edu/ehs. Because some health and safety circumstances are beyond our control, we ask that you become familiar with the Emergency Procedures poster and Campus Safety Plan map in each classroom. Additional information about emergency procedures and how to sign up for ACC Emergency Alerts to be notified in the event of a serious emergency can be found at http://www.austincc.edu/emergency/.
Please note, you are expected to conduct yourself professionally with respect and courtesy to all. Anyone who thoughtlessly or intentionally jeopardizes the health or safety of another individual will be dismissed from the day’s activity, may be withdrawn from the class, and/or barred from attending future activities.
You are expected to conduct yourself professionally with respect and courtesy to all. Anyone who thoughtlessly or intentionally jeopardizes the health or safety of another individual will be immediately dismissed from the day’s activity, may be withdrawn from the class, and/or barred from attending future activities.
Use of ACC email
All College e-mail communication to students will be sent solely to the student’s ACCmail account, with the expectation that such communications will be read in a timely fashion. ACC will send important information and will notify you of any college related emergencies using this account. Students should only expect to receive email communication from their instructor using this account. Likewise, students should use their ACCmail account when communicating with instructors and staff. Instructions for activating an ACCmail account can be found at http://www.austincc.edu/accmail/index.php.
Classroom behavior should support and enhance learning. Behavior that disrupts the learning process will be dealt with appropriately, which may include having the student leave class for the rest of the day. In serious cases, disruptive behavior may lead to a student being withdrawn from the class. ACC's policy on student discipline can be found in the Student Handbook: www.austincc.edu/handbook
Student and Instructional Services
ACC strives to provide exemplary support to its students and offers a broad variety of opportunities and services. Information on these services and support systems is available at: hppt://www.austincc.edu/s4/
Testing Center Policy
Under certain circumstances, an instructor may have students take an examination in a testing center. Students using the Academic Testing Center must govern themselves according to the Student Guide for Use of ACC Testing Centers and should read the entire guide before going to take the exam. To request an exam, one must have:
Do NOT bring cell phones to the Testing Center. Having your cell phone in the testing room, regardless of whether it is on or off, will revoke your testing privileges for the remainder of the semester. ACC Testing Center policies can be found at http://www.austincc.edu/testctr/
MISSED OR LATE WORK: See the section syllabus for more details
COURSE OUTLINE/CALENDAR: See the section syllabus for more details