Professor William Riggs, CPA, MS, MBA, MSA Term Summer 2010 Meets Thursday 6:00-10:00PM pm in SOM 1.110

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1 Course AIM U1 Auditing Professor William Riggs, CPA, MS, MBA, MSA Term Summer 2010 Meets Thursday 6:00-10:00PM pm in SOM Professor s Contact Information Office Phone (# to call for a timely answer) Office Phone-UT-D Office Location SOM Address riggs@accounting.net Office Hours Thursday 4:30 5:45 PM General Course Information Required Auditing & Assurance Services, Louwers, 4th Edition, McGraw-Hill ISBN # Texts & Materials Resources The textbook for this course provides a wealth of material. However, the universe of auditing Information is much greater than what you will find in the text. Much of it is available in the Online Learning Center ( The Online Learning Center offers chapter by chapter quizzes, flashcards, and other tools valuable to your understanding of auditing. On Elearning I have posted power point presentations for each chapter available for your use. I have also posted solutions for the exercises for each chapter so that you can check the correctness of your work and practice answering questions. Course Description AIM 4334 Auditing is a challenging and difficult course that can vastly add to your knowledge. To be successful in this course, you must devote adequate preparation time. The course text chapter reading assignments and homework problems are indicated on the schedule. AIM 4334 has a value of about 96 points at the CPA exam. If you are having difficulty with the topics presented, please see me at the earliest opportunity. Chapter reading assignments should be completed in a timely manner. The assignment schedule may be modified during the semester if necessary. All efforts will be made to cover each chapter in a detailed manner. Because of the quantity of the material to be covered, an in depth study of each chapter cannot be realistically achieved. It is therefore the responsibility of each student to study any portions not covered in class. 1

2 Learning Outcomes Basic concepts, standards, procedures, and practices of auditing are presented. Topics include generally accepted auditing standards, the changing role of the independent auditor in society, professional conduct and ethics, the auditor s reporting responsibilities, risk assessment, internal control, fraud, evidential matter, and auditing in the global economy. The course will serve as a base for the ever interesting opportunities in Forensic Accounting and Fraud Examination areas. To use critical thinking To understand and appreciate the ethical, legal and business issues of the public accounting and auditing profession To recognize that auditing and accounting are not limited by national boundaries and that differences do exist. The current status of international auditing standards. Class Attendance To enjoy the course. Required at all classes. Written attendance will be taken. Due to the summer travelling schedule, if you must miss a class, please make sure you stay in touch with a classmate to help with what you missed and of course come to the office for personal assistance. 2

3 Assignments & Academic Calendar Summer 2010 Chapters and timelines are subject to change at the discretion of the Professor. Month Day Subject Matter Suggested Homework (not graded) May 27 Introduction of the course Chapter 1: Auditing & Assurance Chapter , 1-47 June 3 Chapter 2: Professional Standards Chapter 3: Management Fraud and Audit Risk Module C due by Module C: CPA Liability (partial) Chapter 4: Engagement Planning Chapter 5: Risk Assessment Internal Control Chapter , 2-56 Chapter , 3-47 Chapter , 4-50, 4-56 Chapter , 5-65, Stop and Review 24 Exam 1: Chapters 1-5 and Module C---Please bring SCANTRON Form 882-E Module H due by 6-30 July 1 Module H: Information Systems Auditing (Partial) Chapter 6: Fraud and Audit of Cash Chapter7: Revenue and Collections Chapter , 6-53 Chapter , 7-60,& 61 8 Chapter 8: Revenue and Collection Cycle Chapter 9: Production Cycle Chapter , 8-40 Chapter , 9-43 & Chapter 10: Investment Cycle Chapter 11: Completing the Audit Module B due by Chapter 12: Reports on Audited Financial Statements Module A: Other Public Services --Assurance, Attestation Module B: Professional Ethics (Partial) Chapter , Chapter , 11-52,55 Chapter Module A Modules F and G due by Modules E, F & G: Audit Sampling (Partial) Module C Module E August 5 Exam 2: Chapters 6-12 and Modules A-B & F-H --Please bring SCANTRON Form 882-E 3

4 Course Policies Summer 2010 Grading A = 540, B = 480, C = 420, F < 419 Criteria Exam Exam Module Summary B, C, F, G, and H (40 points each) 200 Total points from requirements 600 Examinations Chapter Summary Make-up Exams ELearning There will be two examinations in this course. The format is a combination of multiple choices, matching questions. You will have the entire class time to complete each examination. To receive credit, the module summary (two pages are ideal for each module 12 font) must be submitted through elearning by midnight of the due date. The summary should highlight the major learning objectives of each module. Due dates: Listed on the schedule. Late submission will be accepted but no points will be given. No make-up examinations No matter what your experience with ELearning is, UTD s Information Resources department has a wonderful site. This course will use a web course tool called elearning. Students will use their UTD NetID account to login to the course at: UTD Galaxy: or at UTD provides elearning technical support 24 hours a day and 7 days a week. The improved services include a toll free telephone number for immediate assistance ( ), request service, and an online chat service. The UTD user community can also access the support resources such as self-help resources and a Knowledge Base. Please use this link to access the UTD elearning Support Center: Server Unavailability or Other Technical Difficulties Withdrawal from Class The site includes short video tutorials for nearly all functions in ELearning, as well as solutions to many issues. The website can be found at Certain features such as the discussion boards have been disabled in this course. Only is available. The university is committed to providing a reliable online course system to all users. However, in the event of any unexpected server outage or any unusual technical difficulty which prevents students from completing a time sensitive assessment activity, the instructor will extend the time windows and provide an appropriate accommodation based on the situation. Students should report any problems to the instructor and also somelearning@utdallas.edu. The instructor and the SOM elearning Team will respond to student s request at the earliest possible time during the next working day. The administration of this institution has set deadlines for withdrawal of any collegelevel courses. These dates and times are published in that semester's course catalog. Administration procedures must be followed. It is the student's responsibility to handle withdrawal requirements from any class. In other words, I cannot drop or withdraw any student. You must do the proper paperwork to ensure that you will not receive a final grade of "F" in a course if you choose not to attend the class once you are enrolled. 4

5 Last day to drop the course with a "W": Monday July 19, 2010 Student Conduct and Discipline The University of Texas System and The University of Texas at Dallas have rules and regulations for the orderly and efficient conduct of their business. It is the responsibility of each student and each student organization to be knowledgeable about the rules and regulations which govern student conduct and activities. General information on student conduct and discipline is contained in the UTD publication, A to Z Guide, which is provided to all registered students each academic year. The University of Texas at Dallas administers student discipline within the procedures of recognized and established due process. Procedures are defined and described in the Rules and Regulations, Board of Regents, The University of Texas System, Part 1, Chapter VI, Section 3, and in Title V, Rules on Student Services and Activities of the University s Handbook of Operating Procedures. Copies of these rules and regulations are available to students in the Office of the Dean of Students, where staff members are available to assist students in interpreting the rules and regulations (SU 1.602, 972/ ). A student at the university neither loses the rights nor escapes the responsibilities of citizenship. He or she is expected to obey federal, state, and local laws as well as the Regents Rules, university regulations, and administrative rules. Students are subject to discipline for violating the standards of conduct whether such conduct takes place on or off campus, or whether civil or criminal penalties are also imposed for such conduct. Academic Integrity The faculty expects from its students a high level of responsibility and academic honesty. Because the value of an academic degree depends upon the absolute integrity of the work done by the student for that degree, it is imperative that a student demonstrate a high standard of individual honor in his or her scholastic work. Scholastic dishonesty includes, but is not limited to, statements, acts or omissions related to applications for enrollment or the award of a degree, and/or the submission as one s own work or material that is not one s own. As a general rule, scholastic dishonesty involves one of the following acts: cheating, plagiarism, collusion and/or falsifying academic records. Students suspected of academic dishonesty are subject to disciplinary proceedings. Plagiarism, especially from the web, from portions of papers for other classes, and from any other source is unacceptable and will be dealt with under the university s policy on plagiarism (see general catalog for details). This course will use the resources of turnitin.com, which searches the web for possible plagiarism and is over 90% effective. Use The University of Texas at Dallas recognizes the value and efficiency of communication between faculty/staff and students through electronic mail. At the same time, raises some issues concerning security and the identity of each individual in an exchange. The university encourages all official student correspondence be sent only to a student s U.T. Dallas address and that faculty and staff consider from students official only if it originates from a UTD student account. This allows the university to maintain a high degree of confidence in the identity of all individual corresponding and the security of the transmitted information. UTD furnishes each student with a free account that is to be used in all communication with university personnel. The Department of Information Resources at U.T. Dallas provides a method for students to have their U.T. Dallas mail forwarded to other accounts. 5

6 Student Grievance Procedures Incomplete Grades Disability Services Procedures for student grievances are found in Title V, Rules on Student Services and Activities, of the university s Handbook of Operating Procedures. In attempting to resolve any student grievance regarding grades, evaluations, or other fulfillments of academic responsibility, it is the obligation of the student first to make a serious effort to resolve the matter with the instructor, supervisor, administrator, or committee with whom the grievance originates (hereafter called the respondent ). Individual faculty members retain primary responsibility for assigning grades and evaluations. If the matter cannot be resolved at that level, the grievance must be submitted in writing to the respondent with a copy of the respondent s School Dean. If the matter is not resolved by the written response provided by the respondent, the student may submit a written appeal to the School Dean. If the grievance is not resolved by the School Dean s decision, the student may make a written appeal to the Dean of Graduate or Undergraduate Education, and the deal will appoint and convene an Academic Appeals Panel. The decision of the Academic Appeals Panel is final. The results of the academic appeals process will be distributed to all involved parties. Copies of these rules and regulations are available to students in the Office of the Dean of Students, where staff members are available to assist students in interpreting the rules and regulations. As per university policy, incomplete grades will be granted only for work unavoidably missed at the semester s end and only if 70% of the course work has been completed. An incomplete grade must be resolved within eight (8) weeks from the first day of the subsequent long semester. If the required work to complete the course and to remove the incomplete grade is not submitted by the specified deadline, the incomplete grade is changed automatically to a grade of F. You must do the proper paperwork to ensure that you will not receive a final grade of "F" in the course. The goal of Disability Services is to provide students with disabilities educational opportunities equal to those of their non-disabled peers. Disability Services is located in room in the Student Union. Office hours are Monday and Thursday, 8:30 a.m. to 6:30 p.m.; Tuesday and Wednesday, 8:30 a.m. to 7:30 p.m.; Friday, 8:30 a.m. to 5:30 p.m. The contact information for the Office of Disability Services is: The University of Texas at Dallas, SU 22 PO Box Richardson, Texas (972) (voice or TTY) Religious Holy Days The University of Texas at Dallas will excuse a student from class or other required activities for the travel to and observation of a religious holy day for a religion whose places of worship are exempt from property tax under Section 11.20, Tax Code, Texas Code Annotated. The student is encouraged to notify the instructor or activity sponsor as soon as possible regarding the absence, preferably in advance of the assignment. The student, so excused, will be allowed to take the exam or complete the assignment within a reasonable time after the absence: a period equal to the length of the absence, up to a maximum of one week. A student who notifies the instructor and completes any missed exam or assignment may not be penalized for the absence. A student who fails to complete the exam or assignment within the prescribed period may receive a failing grade for that exam or assignment. 6

7 If a student or an instructor disagrees about the nature of the absence [i.e., for the purpose of observing a religious holy day] or if there is similar disagreement about whether the student has been given a reasonable time to complete any missed assignments or examinations, either the student or the instructor may request a ruling from the chief executive officer of the institution, or his or her designee. The chief executive officer or designee must take into account the legislative intent of TEC (b), and the student and instructor will abide by the decision of the chief executive officer or designee. Off-Campus Instruction and Course Activities Strategies For Success: Method of Presentation: Off-campus, out-of-state, and foreign instruction and activities are subject to state law and University policies and procedures regarding travel and risk-related activities. Information regarding these rules and regulations may be found at Additional information is available from the office of the school dean. To further ensure your success, I suggest you follow these strategies: There is no special secret to succeeding in this course. Most students who are committed to the 5 Ps have little trouble: Preparation. Do the assigned readings so that the class explanation will mean more. Apply your knowledge to problem solving, the more you solve, the better you learn. Preparation is success. Presence. If you are not present, then you cannot learn and you cannot add your expertise to the group explanation. Exchange contact data with a classmate so that if you miss a class you stay informed. Promptness. Participation. Each student s learning is best facilitated by regular participation. Each student is responsible for sharing his or her understanding and judgment with the class to advance the group s collective skills and knowledge. Practice. Do enough exercises to turn the theory into practical skills" Re-do homework, to become proficient. Copying solutions working problems. Analyze and learn from your mistakes. Failure is a great way to learn. Read the English! If you understand the question you will solve the problem. The theory and philosophy of accounting for Auditing will be presented through lectures, handouts and overhead transparencies as needed. The student s participation is essential. Each class will have assigned topics and chapters readings. Begin each class with a lecture designed to provide structure to the material and to clarify the learning Objectives surrounding the topic. It is assumed that you have thoroughly read and worked through the examples prior to the class sessions. The knowledge and skills gained are cumulative. The student is expected to utilize all previously learned material in any particular analysis. Course Objectives: Learning Goals/Objectives What is it that you want your students to get from this class? 1) Distinguish ethical and unethical behavior in personal and professional contexts as it relates to audit. Resolve ethical dilemmas using an ethical framework, and explain the importance of ethical conduct for the accounting profession as a whole solely charged with the public Learning Outcome/Assessment How will I assess the stated learning objective? 1) Test questions that require the students to compare and contrast ethical and unethical behaviors. 2) Test their understanding through world problems so that they can master the purpose and content of the AICPA Code of Professional Conduct. 3) Test their understanding, interpretation, requirements 7

8 interest. 2) Students will understand compare and contrast the objectives, differences and similarities between internal auditing (CIA objectivity and competence) and external auditing (CPA independence, integrity). Furthermore, they will learn the goals, responsibilities, and reporting levels applicable to public companies (Public Company Accounting Oversight Board PCAOB-SOX) and private companies (Auditing Standard Board ASBAICPA). 3) Clearly understand that the reason for the audit is to add credibility to management assertions. Often there is an adversarial relationship between the auditor and management. The Professional Skepticism concept plays a vital role throughout the field work, the accumulation of evidence and the rendering of an opinion. 4) Students will display understanding the auditor responsibilities as applicable to Audit Attestation and Assurance Services. and enforcement mechanisms as relate to the Code of Professional Conduct through Multiple Choices and word problems 1) Test questions that require the students to recognize, compare and contrast the two broad differences basic skills. 2) Required them to identify and negotiating conflict resolutions between internal and external auditors by interpreting and analyzing dilemmas in hypothetical cases using exercises and word problems thinking skills. 3) Present information through cases and problems to showcase the decision-making skills in identifying the entities and the standard setting authorities. 1) Test questions about details relationship between objectives and accumulations of audit evidence. 2) Test questions about statistical sampling techniques to determine When is enough evidence-enough? Working papers represent the conventions of evidence, format, usage, and documentation in the accounting field. 3) Test questions about the procedures available to the auditor to achieve desired objectives about assertions and reasonably assure the stockholders 1) Test questions of real-world situations where the students can demonstrate appropriate thinking skills, reasoning skills, and recognition skills to identify which services are being performed. 2) Ask the students to write short papers comparing the role of the auditor rendering an opinion and the auditor at the Oscar ceremony, or at the state lottery, at e-commerce functions, or compliance of financial provisions for a loan. 3) Through case discussions and term paper on real world company under audit. Writing in the field of auditing must be succinct. It is easy to write too much. Students writing must reflect that understanding and they will have a chance to enhance appropriate techniques and writing skills by doing. 8