INTRODUCTION TO AUDITING ACCT 543 SPRING 2015

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1 INTRODUCTION TO AUDITING ACCT 543 SPRING 2015 Professor: Scott N. Bronson, Ph.D., CPA Office: 222 Summerfield Hall Office Phone: (785) (please include ACCT 543 in the subject of any s) Web: twitter.com/profsnb Class Hours: M/W 9:30a-10:45a, 11:00a-12:15p, 1:00p-2:15p (all in SUM 424) Office Hours: M/W 2:30p-4:00p, others by appointment REQUIRED MATERIALS Custom ACCT 543 Text (4th Custom Edition), ISBN: This publication is the main textbook for the course, and it contains selected chapters and cases from the texts listed below. Please bring the relevant sections of the text (including cases) to class each day. Arens, A. A., R. J. Elder, and M. S. Beasley (AEB). Auditing and Assurance Services: An Integrated Approach, 15th edition. Upper Saddle River: Prentice Hall, ISBN: Beasley, M. S., F. A. Buckless, S. M. Glover, and D. F. Prawitt (Cases). Auditing Cases: An Interactive Learning Approach, 5th edition. Upper Saddle River: Prentice Hall, ISBN: The custom text should include a Pearson MyAccountingLab (MAL) access code. We will be using the MAL website to complete some of the homework assignments, and the course notes will also be available for download on the site. You can access the MAL site at Be sure to register and begin completing your assignments on the MAL site before our second class meeting. COURSE OVERVIEW Course Objectives: This is an introductory course in auditing for students with limited previous exposure to auditing. The overall objective of this course is to help you obtain the skills, knowledge, and attitude to maximize the likelihood that you will be successful in an auditing career after graduation. The main objectives are to enable you to: 1. Learn about a business approach to auditing that emphasizes the relevance of general business and environmental knowledge awareness. 2. Describe the auditing/assurance services environment. 3. Explain the key auditing concepts and how they drive the audit. 4. Develop professional judgment as it relates to materiality, risk assessment, the application of generally accepted auditing standards, and the determination of sufficient appropriate evidential matter. 5. Describe how to accumulate and interpret audit evidence. 6. Describe the process involved in completing the audit. 7. Apply selected statistical sampling methods in auditing. 8. Describe the types of audit reports issued for publicly-held and privately-held companies. Nature of the Course: The course will be conducted using a mixture of lecture/problem solving and cooperative/team learning that strongly encourages your participation. You are expected to study the chapter readings and other assigned materials in depth prior to each class meeting and to attempt to solve any problems indicated on the syllabus for that given day. We will work on key problems or handouts in class as time permits. At all times, I expect you to maintain an appropriate professional attitude and pride of workmanship. All work submitted in this class is subject to a penalty for sloppy presentation, poor writing, or other characteristics that detract from the professionalism expected of you in your career in the business world. Your work should be clear, neat, concise, and of high quality.

2 GRADING Grades will be based on the total points earned in the course, as shown below. Description Points Exam #1 100 Exam #2 100 Final Exam 120 Case assignments 80 Quizzes 50 Professional conduct 50 Total 500 Final course grades will be based on a straight scale or a curve, whichever is more favorable. I will use the +/- grading system for the B and C categories, but I will not assign the A- grade. The straight scale is the worst case scenario, and it requires at least 87% of the points for an A, 84% of the points for a B+, 80% of the points for a B, 77% of the points for a B-, 74% of the points for a C+, 70% of the points for a C and so on. The need for an additional curve will be assessed after the final exam. I am available to discuss any concerns you have about your course grade or the grading of any particular assignment. Specific grading issues should be discussed in person and outside the classroom. On the other hand, I encourage you to ask any clarification questions in class when you receive your graded exams, quizzes, or cases. An important part of learning for you and your classmates comes from constructive discussions about commonly missed questions. You are probably not the only student who has your question, so please be sure to ask it. EXAMS I expect you to be in attendance for every exam. If you have an acceptable excuse for missing an examination (e.g., a death in the family or provable illness), you are responsible for informing me and obtaining permission to miss the examination before it takes place. Failure to obtain my permission prior to the exam is an unexcused absence, and you will receive a grade of zero on that exam. If you have an acceptable excuse and permission from me to miss an exam, I will modify the relative weight of the final exam to compensate for the missed exam. Note that Exam #1 and Exam #2 are evening exams that will be held from 5:50p-7:50p on Wednesday, February 11, and Wednesday, April 1, respectively. The Final Exam will be held on Thursday, May 14, from 7:30p-10:00p, and the location will be determined later in the semester. With the exception of a non-programmable calculator (if necessary) and a pencil, personal items must be put away prior to the exams. Cell phones will not be permitted to be used as a clock. QUIZZES I will announce quizzes one class period in advance. The quizzes will begin promptly at the beginning of class. Late students will not receive extra time, and absent students will not be given make-ups. Instead, I will drop the lowest two scores in calculating your quiz grade at the end of the semester; I will give seven quizzes, and I will use five to calculate this grade component. The two dropped quizzes allow leeway for missed classes or late arrivals. I will make exceptions for serious, documented excuses (e.g., serious illnesses or religious holidays), but the two drops are intended to compensate for missed quizzes. To the extent that you know about such absences in advance, please discuss them with me as soon as possible before the absence occurs. Typically, each quiz will consist of five multiple-choice questions worth two points each, although other formats are possible. I will announce the quiz format at the time I announce the quiz. You are to answer all quiz questions without using the textbook, notes, or any other aids. The quizzes will relate to material already covered in the course.

3 CASES Most of the case assignments come from the Auditing Cases text, and many of these cases are included at the end of the custom textbook. These cases are designed to help apply the concepts we will cover during the course. We will complete the case assignments together during class time, but you also will be expected to complete some pre-case work before our class discussion. Prior to the case discussion dates, you will receive an assignment sheet indicating the specific pre-case assignment and any class discussion questions. Any pre-case deliverables are due by 8pm on the day before we discuss the case in class, and you will either complete an assignment on MAL or submit a pre-case assignment on Blackboard. Failure to complete the pre-case questions by 8pm on the due date will result in a zero on that assignment. Be sure to bring a printout of any Blackboard submissions with you to the case discussion. On most case discussion days, you will have time during class to discuss the case assignment with up to three other students from your section, and you will choose your group members early in the semester. PROFESSIONAL CONDUCT I expect you to engage in appropriate professional behavior, and your professional conduct grade will include an assessment of this behavior. I expect you to arrive to class on time, dedicate your attention to this class during class time, be attentive while others are speaking, stay in the classroom until the end of class, be prepared each day, and communicate professionally. Professional preparation includes reading the assigned materials, attempting the assigned online homework problems, engaging in class discussions, checking regularly for periodic announcements/communications, and contributing sufficiently to in-class group assignments. The second component of your professional conduct grade deals with written and verbal communication skills, which are essential in the business world. With this in mind, it is particularly important that you practice professional communication in ACCT 543. Note that this not only includes the discussions that we have in the classroom and any formal written assignments you submit, but it also applies to any conversations and/or communications that we have outside the classroom. I expect an appropriate level of formality in all communications between us (e.g., do not start an with Hey or Hey Professor ). I also expect you to use proper grammar, spelling, punctuation, etc. when communicating through . Finally, you should only use for easily answered questions, and you should send messages so that I have a reasonable period of time to respond to them. Another important component of the professional conduct grade is class participation. The course format will include lectures, class discussions, and some in-class assignments. Your participation is essential for the class discussions and assignments, and it also enhances the lectures. As a result, I expect you to participate throughout the semester. Class participation includes attending class regularly, asking questions, answering questions posed to the class, and contributing to class discussions. Your class participation will be evaluated on whether it indicates that you are prepared for class on a regular basis, whether you demonstrate your preparedness in class, and whether you communicate your thoughts effectively. Answering questions incorrectly will not affect the participation component of your professional conduct grade. The final component of the professional conduct grade is homework, which will be an essential part of your learning in this class. I have selected homework problems to highlight important topics, and I expect you to attempt to complete all homework problems assigned in the syllabus prior to the class meeting for which it is assigned. You should attempt the assigned question(s) on the MAL site. We will also be working through many of the problems during class time, so you should bring a copy of your written answers with you to class. If, for some reason, you cannot access the MAL site, you should complete the assignment on paper and turn it in to me in class.

4 ETHICAL BEHAVIOR Public confidence in auditing and assurance services begins with the ethical conduct of CPAs. Violations of ethical behavior in business have raised concerns about ethical expectations in academia. All students are expected to behave ethically in this class. In this regard, you should be aware of the definition of academic misconduct as defined in the University Senate regulations: Academic misconduct by a student shall include, but not be limited to, disruption of classes; threatening an instructor or fellow student in an academic setting; giving or receiving of unauthorized aid on examinations or in the preparation of notebooks, themes, reports or other assignments; or knowingly misrepresenting the source of any academic work. In addition, the School of Business adopted an Honor System that promotes academic integrity. As a student in a School of Business class, you are protected by and expected to conduct yourself in accordance with the Honor System. Information about the Honor System is available for you to read/review by following this link:

5 TENTATIVE COURSE SCHEDULE ACCT SPRING 2015 Date Topic Reading Homework Case 1 W: 01/21 Demand for Audits M: 01/26 CPA Profession W: 01/28 Audit Reports M: 02/02 Audit Reports W: 02/04 Audit Responsibilities Get a Puppy... 6 M: 02/09 Audit Assertions Audit Evidence ; 31 7 W: 02/11 Audit Evidence W: 02/11 EVENING EXAM #1; 5:50-7:50PM (BUD 110) 8 M: 02/16 Audit Planning W: 02/18 Audit Planning Apple Inc. 10 M: 02/23 Analytical Procedures Laramie Wire Manufacturing 11 W: 02/25 Materiality Anne Aylor, Inc. 12 M: 03/02 Risk ; W: 03/04 COSO Framework M: 03/09 Fraud W: 03/11 NO CLASS (COMP DAY FOR EXAM #1) NO CLASSES, SPRING BREAK 16 M: 03/23 Control Risk a-d; 36b 17 W: 03/25 SOX 404 Opinions M: 03/30 Audit Plan/Program ; 27; W: 04/01 NO CLASS (COMP DAY FOR EXAM #2); EVENING EXAM #2; 5:50-7:50PM (BUD 110) 20 M: 04/06 Tests of Controls/STOT W: 04/08 Tests of Controls/STOT M: 04/13 Sampling for TOC ; W: 04/15 Sampling for TOC 28; 29 Hooplah, Inc. 24 M: 04/20 Tests of Balances ; W: 04/22 Tests of Balances 31 Satyam Computer Services 26 M: 04/27 Guest speaker on recent developments in the audit process 27 W: 04/29 Sampling for Balances Handout EyeMax Corporation 28 M: 05/04 Audit Completion W: 05/06 Audit Completion / Wrap up Surfer Dude Duds, Inc. Th: 05/14 FINAL EXAM; 7:30-10:00PM (Location TBD)

6 MyLab / Mastering Student Registration Instructions Register on the site 1. Go to pearsonmylabandmastering.com. 2. Under Register, click Student. 3. Click the OK! Register now button. 4. Enter your instructor s course ID: bronson41237, and click Continue. 5. Sign in with an existing Pearson account or create an account: If you have used a Pearson website (for example, MyITLab, Mastering, MyMathLab, or MyPsychLab), enter your Pearson username and password. Click Sign In. If you do not have a Pearson account, click Create. Write down your new Pearson username and password to help you remember them. 6. Select an option to access your instructor s online course: Use the access code that came with your textbook or that you purchased separately from the bookstore. Buy access using a credit card or PayPal. If available, get 14 days of temporary access. (Look for a link near the bottom of the page.) 7. Click Go To Your Course on the Confirmation page. Under MyLab / Mastering New Design on the left, click ACCT Spring 2015!to start your work. Retaking or continuing a course? If you are retaking this course or enrolling in another course with the same book, be sure to use your existing Pearson username and password. You will not need to pay again. To sign in later: 1. Go to pearsonmylabandmastering.com. 2. Click Sign In. 3. Enter your Pearson account username and password. Click Sign In. 4. Under MyLab / Mastering New Design on the left, click ACCT Spring 2015!to start your work. Additional Information See Students > Get Started on the website for detailed instructions on registering with an access code, credit card, PayPal, or temporary access.