Course Name (short): Fundamental Auditing
School: Business
Program(s): Bach Bus Admin Market Manage, Bach Business Admin Accounting, Bach Business Admin Finance, Bach Human Resources, BachBus Admin Spply Chain Mgmt
Program Coordinator(s): Tba
Course Leader or Contact: Tba
Originator: Lynn Easson-Irvine
Designate: Jessica MacDougall
Version: 1.01
Status: Approved (APPR)

Calendar Description
Students develop a solid understanding of the principles and procedures of external auditing. Students examine key topics within auditing, including reporting, professional standards and ethics, legal liability, audit objectives, evidence and documentation, planning and analysis, materiality and risk, internal control, audit sampling, and computer auditing.

Typical Instructional Format

Courses may be offered in other formats.

Section I Notes: This course will be delivered in hybrid format.

Detailed Description
Students develop a solid understanding of the principles and procedures of external auditing. Students examine key topics within auditing, including reporting, professional standards and ethics, legal liability, audit objectives, evidence and documentation, planning and analysis, materiality and risk, internal control, audit sampling, and computer auditing. The students explore the functions and procedures related to the revenue and collection cycle, acquisition and expenditure cycle, inventory and capital asset balances, production and payroll cycle, finance and investment cycle, and completion of the audit, including evaluation and communication of findings. Instructional strategies include; interactive lectures, class discussion, projects, case analysis, and practice-based assignments.

Program Context

 Critical Performance
By the end of this course students will have demonstrated the ability
to identify the various components and associated risks of an
assurance audit.

Learning Outcomes
To achieve the critical performance, students will have demonstrated
the ability to:
1.  Discuss the degree, designation, and experience requirements and 
    qualifications of auditors.
2.  Differentiate between the various types of audits, auditors, and 
    reasons for each audit.
3.  Explain the rules of professional ethics and legal liability for 
    the accounting/auditing profession.
4.  Apply the generally accepted auditing standards to the planning of
    an audit.
5.  Evaluate a client's internal control system to assess risk.
6.  Prepare a basic audit program outlining the tests for a company's 
    system of internal controls.
7.  Describe the transactions, documents, confirmations, controls and 
    accounts included in the sales, acquisitions and disbursements 
    cycles.
8.  Explain the procedures for inventory counts, inventory 
    observation, and cutoff tests.
9.  Describe the audit tests, transactions, documents, accounts and 
    controls of the production cycle, payroll cycle, finance and 
    investment cycle.
10. Prepare analytical and detailed audit tests for overall revenue 
    and expense accounts.
11. Demonstrate professional behaviour including
    a. meet due dates
    b. produce professional quality assignments
    c. use reference materials responsibly

Students demonstrate their learning in the following ways:

Mid-term test				30%
Comprehensive final exam		40%
Assignments/Reports (3 at 5%)           15%
Case Study				15%
Total					100%

Assignments and case study may be assigned to be completed on an
individual or group basis and to be completed in and out of class as
determined.

In addition to achieving a minimum 50% overall grade, a student must
have a combined average of at least 50% on the non-group components of
the evaluation plan in order to receive credit for this course.

Textbook(s): 
Smieliauskas and Bewley. (2013). Auditing: An International Approach,
6th edition, McGraw-Hill Ryerson.

Recommended Reading:
CPA Canada Handbook: Canadian Auditing Standards (CAS) - CPA Canada;
Rules of Professional Conduct (RPC) - CPA Ontario; Other as suggested
by instructor

Description:
Note: Learning Outcome 11 will be inherent and apparent within each
evaluation.

Module 1: Introduction to Auditing & the Auditor's Professional Roles
and Responsibilities 
1.  Define auditing and describe the comprehensive qualifications of 
    auditors. 
2.  Analyze the economic and social purpose of various types of 
    audit/assurance engagements. 
3.  Distinguish between statutory and voluntary audits.
4.  Differentiate between the role of the internal and external 
    auditor in governance and explain the relationship of each with 
    the audit committee.
5.  Describe the expectation gap.
6.  Explain the role of the audit committee and audit report follow-
    up.
7.  Explain the standard-setting process and the rules of 
    professional standards (audit and assurance standards in Canada).
8.  Explain the monitoring process of the auditing profession (CPAB - 
    Canadian Public Accountability Board) and the mechanisms for 
    compliance including the Sarbanes-Oxley Act (SOX) of 2002.
9.  Apply the Generally Accepted Auditing Standards (GAAS) to the 
    planning of an audit.
10. Explain the Canadian Standards on Quality Control (CSQC-1).
Learning Outcome(s): 1, 2, 4 

Module 2: Objectives of an Audit & Audit Reports 
1.  Describe the financial statement audit process. 
2.  Assess:
    a. Audit objectives for general-purpose financial statements (CAS 
       200, 220, 720)
    b. Auditor's responsibility to detect misstatements
    c. Responsibilities relating to fraud (CAS 240), irregularities 
       and illegal acts (CAS 250)
    d. Other specific audit objectives
3.  Evaluate and conclude on auditor association (5020).    
4.  Draw conclusions and communicate audit results (CAS 230, 700, 
    705, 720).
    a. Audit report 
    b. Modified opinions and reservations
Learning Outcome(s): 2, 4 

Module 3: Auditor Responsibilities: Ethics, Legal Responsibilities &
Professional Rules of Conduct 
1.  Explain, analyze and draw conclusions on the auditor 
    responsibilities and rules around: code of professional ethics, 
    rules of professional conduct, independence and legal liability.
Learning Outcome(s): 3 
Assignment/Report (1) 5% 

Module 4: Preliminary Audit Planning, Assessing Risk and Internal Control
1.  Assess the requirements of audit planning (CAS 300) including:
    a. Pre-engagement arrangements
    b. Assess client acceptance and continuance (CAS 210)
    c. Address initial terms of engagement (CAS 220) (including 
       engagement letters)
2.  Assess the entity's (auditee) risk assessment process (including 
    business risk).
3.  Perform preliminary analytics.
4.  Assess & calculate materiality (CAS 320).
5.  Describe the financial statement assertions.
6.  Evaluate and apply the audit risk model (assess inherent risk and 
    control risk).
7.  Assess the risk of material misstatement including:   
    a. At the financial statement level and at the assertion level 
      (CAS 315)
    b. Responsibilities relating to fraud (CAS 240)
8.  Assess fraud risk. 
9.  Prepare a basic audit program (CAS 230).
10. Other planning and risk assessment topics. 
Learning Outcome(s): 4, 5 

Module 5: Control Assessment and Testing of Internal Controls  
1.  Evaluate the information system and related processes including:
    a. Control environment (CAS 260, CAS 265)
    b. Control frameworks (COSO, COCO, ITGC, COBIT)
    c. Control objectives and procedures 
       i. Optimizing the use of resources
    d. Accounting information systems (IT) and controls  
    e. Auditor vs. management responsibility 
2.  Reassess control risk and the impact on the audit risk model and 
    audit approach.  
3.  Prepare a basic audit program outlining the tests of internal 
    controls.
4.  Document the work performed and results of internal control 
    testing (CAS 230).
5.  Other control assessment and testing topics.
Learning Outcome(s): 5, 6  
Assignment/Report (2) 5% 

Module 6: Audit Evidence and Assurance  
1.  Describe and evaluate:
    a. Audit evidence -- the documentation collected by the auditor
    b. Appropriateness, sufficiency and reliability of evidence
    c. General audit procedures
    d. Working papers
2.  Other 
Learning Outcome(s): 4, 7, 8, 9, 10 

Module 7:  Audit Sampling  
1.  Develop the work plan for the sampling approach (CAS 530)
    a. Audit sampling (for tests of controls and substantive testing)
    b. Sampling and non-sampling error
2.  Other sampling topics
Learning Outcome(s): 4, 6, 7, 8, 9, 10

Mid-Term Exam (Module 1 - 7) 30%

Module 8:  Auditing the Revenue Cycle (revenue, receivables and receipts)
1.  Develop appropriate procedures (based on identified risk of 
    material misstatement) and prepare the work plan for:
    a. Control objectives and tests of controls (CAS 330) - revenue 
       and collections cycle.
    b. Substantive tests (CAS 330) and analytical procedures (CAS 
       520) - accounts receivable.
    c. Confirmations (CAS 505)
2.  Evaluate audit evidence (CAS 500, 501), document results (CAS 
    230), draw conclusions and communicate results (CAS 450).  
Learning Outcome(s): 4, 6, 7 

Module 9: Auditing the Purchases Cycle (purchases, payables and
payments) - Part 1
1.  Develop appropriate procedures (based on identified risk of 
    material misstatement) and prepare the work plan for:
    a. Control objectives and tests of controls (CAS 330) - 
       acquisition and expenditure cycle 
    b. Substantive tests (CAS 330) and analytical procedures (CAS 
       520) - payables
2.  Evaluate audit evidence (CAS 500, 501), document results (CAS 
    230), draw conclusions and communicate results (CAS 450).
Learning Outcome(s): 4, 6, 7 
Assignment/Report (3) 5% 

Module 10: Auditing the Purchases Cycle - Part 2
1.  Develop appropriate procedures (based on identified risk of 
    material misstatement) and prepare the work plan for:
    a. Control objectives and tests of controls (CAS 330) - inventory 
       & capital assets
    b. Substantive tests (CAS 330) & analytical procedures (CAS 520) 
       - inventory & capital assets
2.  Evaluate audit evidence (CAS 500, 501), document results (CAS 
    230), draw conclusions and communicate results (CAS 450).
Learning Outcome(s): 4, 6, 7, 8 

Module 11: Auditing the Production and Payroll & the Finance and
Investment Cycles
1.  Develop appropriate procedures (based on identified risk of 
    material misstatement) and prepare the work plan for:
    a. Control objectives and tests of controls (CAS 330) - 
       production (inventory) and payroll cycle & finance and 
       investment cycle
    b. Substantive tests (CAS 330) & analytical procedures (CAS 520) 
       - production (inventory) and payroll cycle & finance and 
       investment cycle 
2.  Evaluate audit evidence (CAS 500, 501), document results (CAS 
    230), draw conclusions and communicate results (CAS 450).
Learning Outcome(s): 4, 6, 8, 9 

Module 12: Completing the Audit 
1.  Develop appropriate procedures (based on identified risk of 
    material misstatement) and prepare the work plan for:  
    a. Other substantive tests (CAS 330) - including long-term debt, 
       shareholder's equity, other
    b. Tests of controls, substantive tests (CAS 330) and analytical 
       procedures (CAS 520) - revenues and expenses
    c. Other completion procedures - includes overall analytics, 
       contingencies, representations, estimates and fair value
       disclosure (CAS 540), related parties (550), subsequent events 
       (CAS 560), other
2.  Evaluate audit evidence (CAS 500, 501), document results (CAS 
    230), draw conclusions and communicate results (CAS 450).
Learning Outcome(s): 4, 10 
Audit Case Study Due 15%

Module 13: Information Systems and Technology
1.  Prepare an audit work plan which incorporates the risk assessment 
    and use of information systems and technology 
    a. Implication of information systems, technology and internal 
       control
    b. Use of computer assisted audit techniques (CAATs) and 
       continuous auditing
Learning Outcome(s): 5, 6 

Final Exam (Cumulative) 40%