ACCG31709
Auditing 1B
Sheridan
 
  I: Administrative Information   II: Course Details   III: Topical Outline(s)  Printable Version
 
Section I: Administrative Information
  Total hours: 42.0
Credit Value: 3.0
Credit Value Notes: N/A
Effective: Winter 2021
Prerequisites: ACCG36913
Corequisites: N/A
Equivalents: N/A
Pre/Co/Equiv Notes: N/A

Program(s): Business Admin. Accounting
Program Coordinator(s): Jennifer Peterson
Course Leader or Contact: Ernie Kerst
Version: 20210118_00
Status: Approved (APPR)

Section I Notes: N/A

 
 
Section II: Course Details

Detailed Description
In Auditing 1B students build upon the theoretical knowledge gained in Auditing 1A 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(s): Jennifer Peterson
This is a core course in the third year of the Business Administration 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: IN-CLASS
 Tests (2 x 20%)40.0%
 Report10.0%
 Assignments (best 5 of 6 x 2%)10.0%
 Final Exam (Cumulative)40.0%
Total100.0%

Evaluation Notes and Academic Missed Work Procedure:

Provincial Context
The course meets the following Ministry of Colleges and Universities requirements:


 

Essential Employability Skills
Essential Employability Skills emphasized in the course:

  • Communication Skills - Communicate clearly, concisely and correctly in the written, spoken, visual form that fulfills the purpose and meets the needs of the audience.
  • Communication Skills - Respond to written, spoken, or visual messages in a manner that ensures effective communication.
  • Numeracy - Execute mathematical operations accurately.
  • Critical Thinking & Problem Solving Skills - Use a variety of thinking skills to anticipate and solve problems.
  • Critical Thinking & Problem Solving - Apply a systematic approach to solve problems.
  • Information Management Skills - Analyze, evaluate, and apply relevant information from a variety of sources.
  • Information Management - Locate, select, organize and document information using appropriate technology and information systems.
  • Interpersonal Skills - Show respect for the diverse opinions, values, belief systems, and contributions of others.
  • Interpersonal Skills - Interact with others in groups or teams in ways that contribute to effective working relationships and the achievement of goals.
  • Personal Skills - Manage the use of time and other resources to complete projects.
  • Personal Skills - Take responsibility for one's own actions, decisions, and consequences.

Prior Learning Assessment and Recognition
PLAR Contact (if course is PLAR-eligible) - Office of the Registrar

  • Not Eligible for PLAR

 
 
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.
Instruction Mode: In-Class
Professor: Multiple Professors
Resource(s):
 TypeDescription
RequiredTextbookAuditing: An International Approach, Smieliauskas, W. J., Bewley, K, et al, McGrawHill Ryerson, 8th, 2019
RequiredOtherCPA Canada Handbook: Canadian Auditing Standards (CAS) CPA

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

Assignment 1 (2%)

________________________________________
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

Assignment 2 (2%)
________________________________________


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
Assignment 3 (2%)
______________________________________
Test 1 (Chapters 9,10,& 11)    20%
 
________________________________________
Module 4  (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
Assignment 4 (2%)

________________________________________

Module 5  (LO# 10) Production and Payroll Process

  • Describe the transactions, documents, accounts, and control 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

Assignment 5 (2%)
________________________________________
Module 6  (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

Assignment 6 (2%)

________________________________________
Test 2 (Module 4 to 6)   20%

Report is due (10%)
________________________________________


Module 7 (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

________________________________________
Comprehensive Final Exam 40%



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