Texts: Auditing Organizations Through a Strategic-Systems Lens
Auditing: An Assertions Approach by Taylor and Glezen
August 25 - Class No. 2
The demand for assurance services
Access the AICPA assurance services web site and briefly describe each of
the six new assurance services.
August 30 - Class No. 3
Assurance services
Access and read www.cpawebtrust.org and describe the risks in
e-commerce and the assurance CPAs can give regarding these risks.
Access and read the Eldercare case on the AICPA website at
www.aicpa.org/members/div/career/edu/elder.htm. Prepare answers to
your assigned questions.
September 1 - Class No. 4
The public accounting profession
Access the web site of the accounting firm you have been assigned and
prepare a 10 minute class presentation of your understanding of the
core competencies, strategic direction, and firm culture of that
firm.
Read Chapter 2 in Taylor and Glezen.
September 8 - Class No. 5
Professional standards and their use in research
Read Chapter 21 in Taylor and Glezen
Read, print out, and bring to class the gclass4 case from the t-drive.
September 13 - Class No. 6
Professional conduct
Read "Ethical Principles" (Ethics) from the t-drive.
From ProQuest, access and read "A Declaration of Independence" by
Jenkins in the May 1999 issue of Journal of Accountancy and
"The CPA and Independence: Illusion or Reality" in the March 1999
issue of The CPA Journal. (These articles will be covered in
Class No. 7.)
September 15 - Class No. 7
Independence
Read the Independence section of the AICPA Code of Professional Conduct at
www.aicpa.org/about/code/et100.htm.
From ProQuest, access and read "In Search of Solutions:SEC
Independence Concepts" by Elliott and Jacobson in the April
1998 issue of The CPA Journal and "In Search of Concepts of
Auditor Independence" by Carnichael in the May 1999 issue of The
CPA Journal. Write a one-page paper discussing the pros and cons
of the importnce of the appearance of independence.
Read, print out, and bring to classs the "Indepen" and "GoodBank"
cases from the t-drive.
September 20 - Class No. 8
The Code of Professional Conduct
Read the Code of Professional Conduct (other than independence) starting
at www.aicpa.org/about/code/et200.htm.
Read Chapter 3 in Taylor and Glezen.
Read, print out, and bring to class the "InKind," "Smoke," and
"Bygones" cases from the t-drive.
September 22 - Class No. 9
The Legal Environment
Read Chapter 4 in Taylor and Glezen
Read the Assurance Service Liability section at the AICPA web site.
September 27 - Class No. 10
Exam No. 1
September 29 - Class No. 11
Portrait of an Audit - Acquisition and Understanding
Read CableCo Overview and Parts I and II on t-drive.
Read AU Sections 110 and 315.
October 4 - Class No. 12
Portrait of an Audit - Plans and Performance
Read CableCo Parts III, IV, and V on t-drive.
Read AU Section 310 and 311.
October 7 - Class No. 13
Audit Risk and Materiality
Read Chapters 6 and 7 in Taylor and Glezen
From ProQuest, read "Materiality Decisions in the Computer Age" by
Seidler in the May 1999 issue of The CPA Journal
Read AU Section 312.
October 11 - Class No. 14
Electronic Audit Evidence and Documentation
Read AU Section 326.
Read "The Electronic Auditor" on the t-drive.
Guest speaker from Big5 firm to demonstrate software. Have questions
ready.
October 13 - Class No. 15
Audit Planning and Inherent Risk Assessment
Read Chapter 8 in Taylor and Glezen
Read AU Section 322.
Work Tempcon (tem) problem on t-drive.
October 18 - Class No. 16
Audit Planning and Inherent Risk Assessment
Read the following cases-
(1) Computek Equipment at t:comp1 and answer questions
(2) Pinecraft Division at t:pine and answer questions
Read AU Section 334.
October 20 - Class No. 17
Audit Planning and Inherent Risk Assessment
Obtain an understanding of Dermaceutics and the pharmaceutics industry
by:
(1) Reading Part 1 at t:dermaceu.
(2) Reviewing the Dermaceutics section of
www.excellence-in-audit.com
Read AU Section 336.
October 25 - Class No. 18
Control Risk Assessment
Read Chapter 9 of Taylor and Glezen or your operational auditing class
notes on understanding internal control as a refresher on internal
control
Read AU Section 319.
Read Chapters 1 - 6 in Auditing Organizations Through a
Strategic-Systems Lens
Print out, read, and bring to class the material in Part 2 at
t:dermaceu.
October 27 - Class No. 19
Control Risk Assessment
Read Chapter 10 in Taylor and Glezen
Read Chapters 7 - 9 in Auditing Organizations Through a
Strategic-System Lens
Read AU Section 325
Print out, read, and bring to class from t:dermaceu -
(1) Part 3, C3bform.sam
(2) Part 3, Narrat3b.sam
November 1 - Class No. 20
Reasoning from management assertions to substantive testing procedures
Read Chapters 13 and 15 in Taylor and Glezen
Read AU Section 330.
Read sales.sam file in Part 5 of Dermaceutics on t drive-
(1) What factors should be considered in estimating net accounts
receivable?
(2) Assuming that gross accounts receivable are correct, estimate net
accounts receivable at 8-31-99.
(3) If your estimate differs from the company's estimate, what
actions will you take?
November 3 - Class No. 21
Guest from public accounting. Develop and writeup five
penetrating questions for everything you always wanted to know
about public accounting but were afraid to ask.
November 8 - Class No. 22
Reasoning from Management Assertions to Substantive Testing Procedures
Read Chapter 16 in Taylor and Glezen.
Read AU Section 331.
The newspaper headline on the front page of the Northwest Arkansas
Times reads "Auditors Detect a Large Overstatement of Inventory at
Local Tyson's Plant." Write a two page double-spaced story to accompany
that headline which describes specifically how the overstatement was
recorded and how it was detected by the independent auditor.
November 10 - Class No. 23
Reasoning from Management Assertions to Substantive Testing Procedures
Read Chapter 17 in Taylor and Glezen
Read AU Section 332.
Work problem 17-46.
November 15 - Class No. 24
Reasoning from Management Assertions to Substantive Testing Procedures
Read Chapter 18 in Taylor and Glezen.
Read AU Section 333 and 560.
Read and bring to class "Auditing Commission Payments"(comm), "Letter of
Representations"(repltr), and "When Giants Fall"(giant) from t-drive.
November 17 - Class No. 25
Exam No. 2
November 22 - Class No. 26
Audit Sampling
Read Chapter 10 in Taylor and Glezen
Read AU Section AU 350.01-.14 and 350.31-.47
Work sampling problem (sample) from t-drive.
November 24 - Class No. 27
Audit Sampling
Read Chapter 14 in Taylor and Glezen
Read AU Section 350.15-.30.
November 29 - Class No. 28
Audit Reporting
Read Chapters 19 and 20 in Taylor and Glezen
Read AU Sections 504 and 508.
Answer questions 19-47 and 20-47.
December 1 - Class No. 29
Student presentations of projects.
December 6 - Class No. 30
Student presentations of projects.
This course has two general purposes:
(1) To provide you an opportunity to learn of the new and expanding
opportunities in assurance services and
(2) To provide you an opportunity to investigate in depth a
specific type of assurance services (financial auditing). In
this section you will learn basic auditing concepts and be
introduced to the process of reasoning from these concepts to
auditing techniques. Specifically, you should learn to identify and
evaluate risks that financial statements may be materially misstated
and to control the risk that an auditor will express an opinion that
financial statements are fairly presented when they are not. The
emphasis will be on identifying and solving problems in an
unstructured business environment.
A secondary purpose of this course is to give you a basis for
studying for the CPA exam.
This course will be important to your future professional career because
if:
* You enter public accounting you will directly use the concepts and
techniques presented in this course. Your success in public accounting
will be directly related to the skills you learn in this course.
* You accept a position in industry or government you are likely to work
with public accountants. This course will help you understand what they
are doing and why they are doing it.
* You face decisions in your personal and professional lives, and we all
do, you will learn to assess risks and make decisions.
In summary, in this course you will have an opportunity to learn to assess risks, and, based on those risks assessments, to make decisions. Although positioned within a public accounting framework, these techniques will have broad application in all of your future endeavors, if you master them.
The reasoning process, as opposed to the technical material, you learn in this class will be of value to you indefinitely. However, much of the technical material that you learn in this course (and all other courses) will be obsolete in 3 to 5 years, so it is important that you learn to learn new material. You will be expected to learn much of the material in this course by reading the homework assignments. Some of this material will only be discussed in class to the extent you ask questions on it. You will, however, be responsible for it on exams and quizzes.
As a student and future professional accountant, I agree to:
* Respect the ideas of others
* Contribute ideas to the class
* Be enthusiastic about this class
* Be prepared for class
* Be on time for class
* Take advantage of this learning opportunity
I intend to fulfill the instructor provisions of this contract. Please
sent me an e-mail message before Class No. 3 stating whether you
agree to fulfill the student provisions of this contract.
1. Major exams, including the final which will be comprehensive. Do not miss a major exam; a makeup is optional to the instructor and, if given, is always more difficult. (350 points)
2. Project.(150 points) This project will be performed by teams. Each team member is expected to contribute equally to the project. Each team member will have an opportunity to report to me inadequate contributions by other team members. A team member who fails to make an appropriate contribution will have his or her grade lowered.
4. Quizzes (100 points) These quizzes will test your preparation for class and will be taken from the homework assignments. Students who are absent will receive a zero unless he or she is making an office recruiting visit and has notified me in writing before the visit. I will throw out each studnet's lowest quiz score at the end of the semester. This is to allow for illness, car breakdowns, over-sleeping, extended weekends, hangovers, etc. If you wish to appeal a quiz grade you may do so by explaining in writing within 24 hours of the return of your quiz the detailed reason why you believe your answer is correct. Students who arrive late for class are not permitted to take these quizzes.
5. Homework (50 points) I will scale your total homework score to 50 points. If you have questions about your graded homework, you may ask them in class, during office hours, or by appointment. All homework is to be word processed. If your homework is not good enough to give to your boss on the job you take, it's not good enough for this class. If you wish to appeal a homework grade you may do so by explaining in writing within 24 hours of the return of your homework the detailed reasons why you believe your answer is correct.
6. Class participation (150 points) This is a very interactive class.
Much of your learning will occur during class and group discussions. Both
quantity and quality of class participation will be considered in
determining your class participation score. We will follow the
Harvard Business School approach. When the instructor or another
student poses a question to the class, all students who believe they
know the answer should raise their hands. Raising your hand does not
mean that you wish to be called on (although you may be), but that
you are reasonably sure that you know the answer. Failure to raise
your hand will be taken to mean that you do not know the answer.
After each class I will record my impression of who indicated by
raising their hand that they knew the answers to a substantial
portion of the questions and who did not. Remember, acknowledging
that you do not understand an issue or concept is not a failure on
your part, it is a failure on my part to properly explain it, and I
want to correct it. However, your failure to ask questions about
material you don't understand is a failure on your part.
Because answers to some in-class questions and cases will be developed in
groups, each student will be asked to evaluate each member of their group
using the following criteria:
*Initiative - gets the group going on the topic; helps the group reach
consensus of opinion by summarizing various positions suggested.
*Participation - asks questions to stimulate the thoughts of other group
members; suggests alternative solutions or positions.
*Preparation - gives appearance of having completed assignment in the
syllabus that relates to the subject being discussed.
*Attitude - takes the task of the group seriously; does not waste time;
goes to work quickly on the group project; does not offer frivolous
solutions.
7. Oral presentation (25 points) Sign up sheets will be posted on my door between September 14 and September 24 to permit you and a colleague to make an appointment with the CEO of Begin Company (me) to attempt to persuade him to record two audit adjustments developed during the course of your audit. Your oral presentation skills will be assessed. Information regarding this presentation can be found at "oral" on the t-drive.
The following factors will NOT be considered in determining an individual's grade, so please do not raise them with me:
1. Need of a certain grade to graduate.
2. Need of a certain grade to avoid probation.
3. Need of a certain grade to sit for the CPA exam.
4. Need of a certain grade to maintain eligibility for scholarships,
fellowships, etc.
5. Participation in campus activities.
6. Job requirements. While I appreciate the time a job can take away
from a student's studies, a very high percentage of students are employed
on a part or full time basis in various capacities, and I have no basis
for adjusting one student's grade for job requirements.
"On my honor, I have neither given or received any unauthorized aid on this exam (quiz), nor have I seen or heard of anyone else doing so."
Any student who feels that he or she cannot in good conscience sign the honor statement should see me immediately. Failure to write or sign the honor statement will result in a grade reduction. In this class the honor code is not applied to the project or homework assignments so students may discuss concepts and approaches to the work with other students. However, in these situations students are expected to do their own work. Evidence that one student has appropriated the work of another student will subject both students to the disciplinary process.
Weather policy:Classes are normally held during inclement weather unless otherwise notified by official radio or TV announcements. You may call 575-7000 for announcements about university closings or check www.pigtrail.uark.edu/info/weather.nclk
Prerequisites:The prerequisites for this course are ACCT 4753 and ACCT 4963 or equivalent courses each with a grade of "C" or better.
About the CPA exam:Because the technical content covered on the
Auditing Section of the CPA exam far exceeds what can be covered in this
course, I strongly encourage all students to set aside specific time each
week to study CPA exam content on their own. Students may wish to
consider a CPA review course, a CPA review book, or other sources.
One other source is CPAPASS, a file of CPA exam questions located in
my folder on the t-drive. You will need to copy it onto the c-drive
in order to use it.
There will be a correlation between what you study for the CPA exam
and what we cover in the course. Always feel free to consult me
about any questions you develop while working with the CPA Exam
information.
About networking:If you enter public accounting (or other business areas) it is extremely important that you develop contacts in the business community. The time to start making those contacts is now, while you are still in school. While you may wonder why you should develop contacts with students, in fewer years than you can imagine, those students will become CEOs, CFOs, and other officers in organizations that will need assurance services. The point is that you have to grow with your contacts. You cannot wait until you are a manager in a CPA firm to start. You should make it a point to meet and get to know every student in this class and all other classes that you are taking. Then maintain those contacts in the years ahead.
Reality 1 Reading the chapters and doing the homework provide a minimum understanding and therefore a minimum grade. Above average grades require additional work.
Myth 2 "I did learn a lot from the projects, but I wasted a lot of time just trying to figure out exactly what I was doing."
Reality 2 It may have taken a lot of time, but that time was not wasted. You were thinking, and you learned more than you would have if you were told exactly what to do.
Myth 3 "Unless a student has the opportunity to spend time with other students in the class discussing their interpretations of the assignments, he or she may be left out in the cold."
Reality 3 There is insufficient class time to discuss all topics in depth. Out of class discussions of concepts and interpretations are encouraged. Where out of class assignments are involved everyone should do their own thinking and submit their own work.
Myth 4 "In doing the cases and projects there should be more guidance because it is frustrating to try and complete something by a deadline when you really don't know what you are doing."
Reality 4 In the future you will always have a deadline and you will seldom know exactly how to do what you have been assigned to do. As soon as you master one task, you will be assigned another unfamiliar one (with a deadline).
Myth 5 "I didn't miss one day of class and still feel like I have not accomplished anything."
Reality 5 Merely showing up for class provides no assurance of accomplishment. Preparation and active class participation are necessary.
Myth 6 "Increase the guidance given on the cases and project so that you can concentrate on learning 'how to' instead of worrying if you have done what you are supposed to."
Reality 6 The most important thing you can learn in this course is how to identify problems. In the future they will not be identified for you. Determining how to deal with a problem is usually simple once the problem has been identified.