ACCG31709
Auditing 2
 
  I: Administrative Information   II: Course Details   III: Topical Outline(s)  Printable Version   Public
 
Section I: Administrative Information
  Credit Value: 3.0
Credit Value Notes: N/A
Effective: Winter 2015
Prerequisites: (ACCG36913)
Corequisites: N/A
Equivalents:
N/A
Pre/Co/Equiv Notes: N/A

Course Name (short): Auditing 2
School:
All Sheridan Schools
Program(s): Business Admin Accounting
Program Coordinator(s): Sally Mitzel
Course Leader or Contact: Ernie Kerst
Originator: Lesley Rumsby
Designate: Lesley Rumsby
Version:
16.0
Status: Approved - Under Rev (AREV)

Calendar Description
In Auditing 2 students build upon the theoretical knowledge gained in Auditing 1 by applying auditing standards and techniques. Topics include the study and evaluation of internal control, auditing in a computerized environment and audit sampling. The emphasis in this course is the application of auditing concepts to audit revenues, purchases, production, payroll, finance and investment cycle. The course ends with the completion of the audit and the basic preparation of working papers.

Typical Instructional Format

Mobile
42.0
Total hours: 42.0

Courses may be offered in other formats.

Section I Notes: A minimum grade of "B" (70%) in each of ACCG36913 and ACCG31709 allows students a course exemption in Auditing 1 of the CGA program. The CGA Auditing 1 exam must be successfully challenged to obtain the full exemption.

 
 
Section II: Course Details

Detailed Description
In Auditing 2 students build upon the theoretical knowledge gained in Auditing 1 by applying auditing standards and techniques. Topics include the study and evaluation of internal control, auditing in a computerized environment and audit sampling. The emphasis in this course is the application of auditing concepts to audit revenues, purchases, production, payroll, finance and investment cycle. The course ends with the completion of the audit and the basic preparation of working papers. Students will learn by participating in class lectures, group discussions, weekly assignments and short reports based on research of current topics in the media.

Program Context

 
Business Admin Accounting Program Coordinator: Sally Mitzel
This is a core course in the third year of the Accounting program which builds on the courses covered in the second year program.


Course Critical Performance and Learning Outcomes

 
 Critical Performance

By the end of this course, students will have demonstrated the 
ability to design tests based on audit objectives for financial 
statement audits.


Learning Outcomes

To achieve the critical performance, students will have demonstrated 
the ability to:

1.  Explain the purpose and advantages of evaluating a client's 
    internal control
2.  Apply the seven internal control objectives and weaknesses, 
    explain reasonable assurance, and cost/benefit aspects of audit 
    tests.
3.  Compare with examples auditing around, through, and with the 
    computer 
4.  Compare statistical vs. non-statistical (judgmental) sampling 
    examples for each
5.  Prepare a basic audit program for tests of controls and tests of 
    balances.
6.  Describe the transactions, documents, confirmations, controls, 
    and accounts included in the sales cycle, 
7.  Describe transactions, documents, controls, and accounts of the 
    acquisition cycle
8.  Prepare audit tests of control & balances for purchases and 
    disbursements transactions
9.  Explain procedures for the inventory count observation and 
    cut-off 
    tests
10. Describe audit tests, transactions, documents, accounts, and 
    controls of the a) production cycle, b) payroll cycle, c) finance 
    & investment cycle.
11. Prepare analytical and detail audit tests for overall revenue and 
    expense accounts
12. Explain the concepts for subsequent events, contingent 
    liabilities, review of working papers & discovery of errors

Evaluation Plan
Students demonstrate their learning in the following ways:

 
Evaluation Plan
Students demonstrate their learning in the following ways:

Test 1 Chapters 9,10,11 - 20%
Consists of multiple choices, short answers, detail 
descriptions/explanations

Test 2 Chapters 12,13,14 - 20%
Consists of multiple choices, short answers, detail 
descriptions/explanations

Comprehensive final exam Ch. 9 to 15 - 40%
Consists of multiple choices, theory questions, detail explanations & 
analysis questions

Assignments working papers and reports - 20%

Total Marks - 100%
Provincial Context
The course meets the following Ministry of Training, Colleges and Universities requirements:

 

Essential Employability Skills
Essential Employability Skills emphasized in the course:

  Communication   Critical Thinking & Problem Solving   Interpersonal
  Numeracy   Information Management   Personal

Notes: N/A

Prior Learning Assessment and Recognition
PLAR Contact: Multiple PLA Contacts

Students may apply to receive credit by demonstrating achievement of the course learning outcomes through previous life and work experiences. This course is eligible for challenge through the following method(s):

Challenge Exam Portfolio Interview Other Not Eligible for PLAR
X        

Notes: N/A

 
 
Section III: Topical Outline
Some details of this outline may change as a result of circumstances such as weather cancellations, College and student activities, and class timetabling.
Effective term: Winter 2015
Professor: Multiple Professors
Textbook(s):
Textbooks and Instructional Materials

Smieliauskas and Bewley, Auditing: An International Approach,6th 
McGraw-Hill Ryerson

Applicable student group(s): Business Administration - Accounting
Course Details:
Module 1  (LO# 1,2,3) Control Evaluation and Testing

- Explain the auditor's need to understand the client's system of 
  internal control
- Understand and explain the purpose of evaluating a client's  
  internal control
- Describe and apply the seven internal control objectives
- Describe  advantages & disadvantages of 3 methods of describing  
  client's system of internal control 
- Identify weaknesses in internal control and audit tests of control  
  (compliance tests)
- Outline the auditor's responsibilities when fraud is detected
- Explain reasonable assurance and the cost/ benefit aspects of 
  testing internal control
- Compare with examples auditing around, threw, and with the computer
- Describe the problems of control risk assessment in a small 
business

Text Reference: Chapter 9

________________________________________
Module 2  (LO# 4)  Audit Sampling

- Distinguish audit sampling vs. non-sampling work 
- Compare statistical vs. non-statistical (judgemental) sampling 
  with examples for each
- Differentiate between sampling and non-sampling risk

Text Reference: Chapter 10
________________________________________


Module 3  (LO# 5)Revenues, Receivables, and Receipts Process

- Prepare a basic audit program for tests of controls
- Develop a basic audit program for tests of balances

Text Reference:  Chapter 11

________________________________________
 
Module 4 - Review for test 1
________________________________________
Test 1 (Chapters 9,10,& 11)    20%
  
________________________________________
Module 5  (LO# 7,8,9) Purchases, Payables, Payments Cycle

- Describe the transactions, documents, controls, and accounts 
  included in the SAES cycle
- Outline examples of tests of control
- Design audit tests to detect errors
- Explain  the importance of the "existence" objective for the 
  assets of the client
- Explain the importance and procedures to prepare bank and 
  receivables confirmations
- Design substantive audit tests for the accounts in the sales 
  cycle
- Describe 2 common frauds involving receivables and cash 
  accounts
- Describe transactions, documents, controls, and accounts of 
  the acquisition cycle
- Prepare audit tests of control for purchases and 
  disbursements transactions
- Design audit procedures for detecting errors and 
  irregularities
- Explain the importance of completion objective for 
  liabilities and related audit tests
- Explain procedures for the inventory count observation and 
  cut-off tests

Text Reference: Chapter 12
________________________________________

Module 6  (LO# 10) Production and Payroll Process
- Describe the transactions, documents, accounts, and controls 
  of the production cycle
- Outline control tests for production transactions
- Design audit tests to detect errors and irregularities in 
  the Production process
- Describe the transactions, controls, accounts, and documents 
  in the payroll cycle
- Design control tests and tests of balances for the payroll 
  cycle

Text Reference: Chapter 13
________________________________________
Module 7  (LO# 10) Finance and Investment Process

- Describe transactions, controls, accounts, and documents of 
  the finance & investment cycle
- Design tests of control for the liabilities, equity, and 
  investment transactions
- Design tests to detect errors and other irregularities
- Prepare audit tests for overall revenue and expense accounts

Text Reference: Chapter 14
________________________________________
Module 8  Review  for Test 2 Chapters 12,13,14

________________________________________
Test 2 (Module 5 to 8)   20%
________________________________________
 

Module 9 (LO# 12) Completing the Audit
- Describe analytical procedures for the completion of the 
  audit
- Explain the use of various letters and reports in completing 
  the audit
- Explain and apply the concepts for subsequent events and 
  contingent liabilities
- Explain the actions required for discovery of errors after 
  the audit is completed 
- Describe the actions for review of working papers

Text Reference: Chapter 15
 

Assignment is due
________________________________________
Module 10  Review from Chapters 9 to 15
________________________________________
Comprehensive Final Exam 40%
________________________________________


Academic Honesty
The principle of academic honesty requires that all work submitted for evaluation and course credit be the original, unassisted work of the student. Cheating or plagiarism including borrowing, copying, purchasing or collaborating on work, except for group projects arranged and approved by the faculty member, or otherwise submitting work that is not the student's own violates this principle and will not be tolerated. Instances of academic dishonesty, including assisting another student to cheat, will be penalized as detailed in the Student Handbook.

Students who have any questions regarding whether or not specific circumstances involve a breach of academic honesty are advised to discuss them with the faculty member prior to submitting the assignment in question.

Discrimination and Harassment
Sheridan is committed to provide a learning environment that respects the dignity, self esteem and fair treatment of every person engaged in the learning process. Behaviour which is inconsistent with this principle will not be tolerated. Details of Sheridan's policy on Harassment and Discrimination are available in the Student Handbook.
 
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