ACC 380K.4 Course Syllabus Unique 02485, MW 11-12.30 Fall 2005 Faculty Information Lecturer: Lynn Serre Dikolli Office: GSB 5.124F Voice: 232-9343 Office Hours: MW 9.30-10.30, F 12-1 other times by appointment Email: Lynn.Dikolli@mccombs.utexas.edu Teaching Assistants: To be advised Introduction Auditing is a discipline that is separate and distinct from accounting, yet it is a discipline that requires you to have a thorough knowledge and understanding of accounting rules and principles. A good auditor is first and foremost a good accountant. A good auditor also has strong analytical skills, sound judgment skills, excellent communication skills, is ethical and remains independent at all times. Auditing has developed and evolved over the years to become a subset of a large set of assurance services that an auditor provides. This course, however, will focus on auditing. The primary purpose of this course is to introduce you to the assurance profession, the basic concepts of auditing and how to apply those concepts in a variety of different scenarios. This course also intends to build a foundation for you if your goal is to write the CPA exam, as well as help you prepare for a career in public accounting. S YLLABUS C ONTENTS Introduction and Course Objectives. 1 Prescribed Learning Materials and Reference Sites. Method of Instruction; Frequently Asked Questions; Students with Disabilities. Method of Assessment and Policy on Scholastic Dishonesty Course Calendar 5 2 3 4 Specific Course Objectives By the end of this course I expect that you will be able to: 1) Identify the primary standard setting bodies in the audit profession and understand the role that auditing plays in a market economy. 2) Summarize recent changes in the audit environment, especially the Sarbanes-Oxley Act of 2002. 3) Summarize the audit process, including the key concepts of risk, materiality and evidence. 4) Make informed decisions about testing internal controls, sampling, gathering audit evidence and evaluating audit findings. 5) Understand the importance of documenting and communicating audit findings to stakeholders. 6) Summarize the auditor s responsibility regarding fraud as well as specific fraud detection techniques. 7) Understand the auditor s code of professional conduct, in particular the requirement for ethics and independence. ACC 380K.4 Course Syllabus, Fall 2005 1
Prescribed Learning Materials The prescribed textbook for this course is: Rittenberg and Schwieger. 2005. Auditing: Concepts for a Changing Environment. Fifth Edition. Thomson. ISBN: 0-324- 22310-2. (Note that there is ACL software included with this textbook that is required for the course.) Instructional case assignments will be reviewed in class. However, I generally expect not to review in class the assigned practice problems from the textbook. These practice problems are assigned to help you independently understand some of the fundamental concepts as you prepare for each class. Suggested solutions to all assigned practice problems will be available on the Blackboard course site. (All materials for this course are available at the class website powered by Blackboard, which you can access from http://courses.utexas.edu/. Click the login button. You will then need your UT EID and password to login to the class website.) The class website will contain the following resources that can be accessed at any time throughout the semester: Course syllabus and lecture schedule Calendar of events and course announcements for this course Bulletin Board classroom and project discussions Online Grades Class Handouts and additional course materials Site activities could include exchanging e-mail, engaging in class discussions and chats, and exchanging files. In addition, class e-mail rosters will be a component of the site. If you do not want your name included in these electronic class rosters, you must restrict your directory information in the Office of the Registrar, Main Building, Room 1. For information on restricting directory information, please see: http://www.utexas.edu/student/registrar/catalogs/gi03-04/app/appc09.html. Useful Reference/Resource Sites The following sites may be useful as additional resources throughout the course. Web Site Reference http://rittenberg.swlearning.com http://www.sec.gov http://www.fasb.org http://www.aicpa.org http://www.pcaobus.org http://www.gasb.org http://www.gao.gov www.nyse.com www.nasdaq.com Description Textbook Web Site The Securities and Exchange Commission Financial Accounting Standards Board American Institute of Certified Public Accountants The Public Company Accounting Oversight Board Governmental Accounting Standards Board The U.S. General Accounting Office New York Stock Exchange The NASDAQ Exchange ACC 380K.4 Course Syllabus, Fall 2005 2
Method of Instruction The method of instruction in ACC 380K.4 will be two ninety-minute class sessions per week. In all, there are 28 sessions, comprising 24 instructional case/lecture sessions, 1 course review session, 2 midterm exam sessions and an introductory session. Each instructional case session will comprise a lecture and then discussion of the pre-assigned instructional case assignment that applies issues raised in the assigned chapter reading as well as in the lecture, to a particular context. You will be required to prepare for the instructional case assignment in advance of the class session. Written evidence of your preparation must be submitted to me prior to the start of the class session (see Method of Assessment section). Past experiences and feedback from previous students have clearly shown that the requirement to hand-in prepared responses to each instructional case assignment significantly enhances the learning process. I expect that you will come to class adequately prepared. I recommend you prepare for each session by doing the background reading, preparing solutions to practice problems and preparing your instructional case assignment. You should also note that the instructional case assignments and assigned practice problems are similar in structure and degree of difficulty to questions that will make up the mid-term and final exams. Course & Career Success Factors Integrity Even if all else fails never compromise your ethics, values, & integrity; they are worth more than everything else combined. Effort Always be prepared, yet strive to improve. Give 110% in everything you do. Technical Competence Be knowledgeable in your particular area of expertise; stay abreast of current events. Analytical Creativity Think out of the box; look for an edge or differentiator. Thinking/Judgment Be able to process information, apply critical thinking, and reach effective decisions. Communication Skills Be an effective influencer through strong listening, verbalizing and writing skills. Interpersonal skills Work effectively in teams; develop a flexible engagement and interaction style. Students with Disabilities The University of Texas at Austin provides upon request appropriate academic accommodations for qualified students with disabilities. For more information, contact the Office of the Dean of Students at 471-6259, 471-4641 TTY. FREQUENTLY ASKED QUESTIONS AND ANSWERS Q: Can I submit an assignment if I can t make it to class? A: Yes, you can submit instructional case assignments if you can t make it to class. All case assignments are to be submitted electronically before the start of class. Q: Can I take a makeup exam? A: Makeup exam times will be available for the final exam (dates to be advised later) and for unavoidable conflicts known in advance of the midterm exams (email or see me if you think you need to arrange this). If there are emergency circumstances that prevent you from taking a midterm exam then the assigned weighting on the midterm will be added to the weighting on the final exam. Q: Can I prepare for instructional case assignments working with classmates? A: I have no objection to you working in groups to discuss any or all of the instructional case assignments. However, I expect you to prepare your write-ups of the case assignments independently of anyone else. See the policy on scholastic dishonesty (in this document) for more details. Q: What are the consequences of failing to submit an instructional case assignment? A: You will find that the grading formula for this assessment component requires that you submit only 16 of the 23 cases assigned, if you do desire (you can only achieve a maximum score of 32 for the instructional cases Accordingly, if you get to 32 raw points for instructional case assignments over the semester, you automatically receive the maximum 8% toward your final grade. Further accumulation of points will not count toward your final grade. Q: What should I do if I have a dispute over the grading of my work? A: Please don t hesitate to send/give me a written description of your dispute and I will happily re-grade the work. Please note though that once you submit a request for re-grade, the WHOLE piece of assessment will be re-graded, so that your overall grade could change up or down. ACC 380K.4 Course Syllabus, Fall 2005 3
Method of Assessment Your grade in the course will be determined as follows: Class Preparation & Participation 10% 16 Instructional Case Assignments 8% ACL Case 5% Major Case Group Report 12% Mid-Term Examination (2) 30% Final Examination 35% 100% You are required to perform satisfactorily in all components of the assessment. The content requirement of each assessment component is presented below. Class Preparation & Participation (10%) Your class preparation and participation mark will be based on the following performance signals: attendance in class, responses to questions I may ask in class, offering relevant comments and observations to issues raised in class, and evidence of pre-reading for classes. You need not excel at all of these signals to score highly in this assessment, but consistently failing to prepare work for class will adversely affect your grade. Instructional Case Assignments (8%) The instructional case assignments are due before the start of each instructional case class, and are to be submitted electronically in the Drop-Box on Blackboard. Late or electronic instructional case assignment submissions will not be accepted and will receive a grade of zero. You are expected to submit 16 of the instructional case assignments, for a maximum score of 8% of your final grade. Each instructional class assignment will comprise either a minicase a discussion question or a comprehensive problem. Please carefully check the course calendar for details of the instructional case assignment to be handed in each session. In preparing your responses to the instructional case assignments, you will likely find it useful to first read the assigned chapter, attempt the practice problems assigned from the textbook and then attempt the instructional case assignment. The instructional case assignments will be graded more for effort than for content. The purpose of these submissions is to show evidence of your learning endeavors, (which may not necessarily correspond with perfect answers). Evidence that you have attempted each question in the assignment will score 2 points. Incomplete responses will score 1 point. If you do not submit a response, then you will receive zero points for that instructional class assignment. Assigned cases will be discussed in class each week and a suggested solution made available. ACL Case (5%) You will be assigned a case using ACL software, mid-way through the semester. The ACL software is included with the textbook for the course. Further details regarding the case will be provided during the course. An electronic copy of this report is due to be submitted electronically BEFORE 5pm Friday December 2nd. The report counts for 12% of your final grade. Late submissions will not be accepted. For this report, you will be working in groups, with a maximum of 5 people per group. Your report should not exceed FIVE letter size pages, excluding appendices (if required), and will be graded for both content and report writing skills. Mid-Term Examinations (2-15% each) A mid-term examination of approximately 60 minutes will be held in class on October 3 rd and November 7th. The exam will embrace the course content covered up to and including the preceding class. These exams will comprise multiple choice and short answer questions. Final Examination (35%) The final examination of three hours will be held at a time to be advised later. The exam embraces the whole of the course content, with greater emphasis on topics discussed after the second mid-term exam. Policy on Scholastic Dishonesty Students who violate University rules on scholastic dishonesty are subject to disciplinary penalties, including the possibility of failure in the course and/or dismissal from the University. Since dishonesty harms the individual, and the integrity of the University, policies on scholastic dishonesty will be strictly enforced. You should refer to the Student Judicial Services website at http://deanofstudents.utexas.edu or the General Information Catalog to access the official University policies and procedures on scholastic dishonesty as well as further elaboration on what constitutes scholastic dishonesty. The Department of Accounting has no tolerance for acts of scholastic dishonesty. The responsibilities of both students and faculty with regard to scholastic dishonesty are described in detail in the department s Policy Statement on Scholastic Dishonesty in the MPA Program and the Professional Program in Accounting. By teaching this course, I have agreed to observe all of the faculty responsibilities described in that document. If you are an MPA or PPA student, by enrolling in this class, you have agreed to observe all of the student responsibilities described in that document. If the application of that Policy Statement to this class and its assignments is unclear in any way, it is your responsibility to ask me for clarification. A copy of the Policy Statement is available from me or in CBA 4M.202 and is online. http://www.mccombs.utexas.edu/dept/accounting/honesty. asp. Major Case - Group Report (12%) ACC 380K.4 Course Syllabus, Fall 2005 4
Course Calendar At-A-Glance Date Day # Instructional Topic Read Hand-in Case # Practice Problems* PART 1: THE ASSURANCE ENVIRONMENT 31-Aug W 1 7-Sep W 2 Course Introduction/ The Demand for Assurance Services Overview of the Audit Environment/Audit Process - - - Ch.1/Ch.2 p.52-56 Olson Company 1-46 1-3,1-9,1-27 12-Sep M 3 Professional Standards Ch. 1&2 Holmes,CPA 2-57 2-15,2-33,2-58 14-Sep W 4 Sarbanes-Oxley Act PART 2: THE AUDIT PROCESS 19-Sep M 5 Risk Ch. 4, p. AICPA Website on SOX Sarbanes Implications 2-54 2-12,2-52,2-53 Management Integrity & Risk 4-54 4-4,4-13, 4-28 21-Sep W 6 Materiality Ch. 4, p.107-115 RRP, Inc. 4-60 4-22,4-25,4-58 26-Sep M 7 Evidence Ch. 7 Eagle River 7-44 7-7,7-21,7-37 28-Sep W 8 Audit Programs/Documentation of Evidence Ch. 7 Cendant 7-49 7-42,7-45,7-46 3-Oct M 9 IN-CLASS TEST 1 -- 5-Oct W 10 What is Internal Control? Ch. 5, p.145-160 University of Wisconsin 5-72 5-5,,5-23,-5-24 10-Oct M 11 Evaluating Internal Control Ch. 5, p.160-181 JC Penney 5-75 5-35,5-58,5-66 12-Oct W 12 Sampling Fundamentals Ch. 9, p.334-349 Attribute sample results 9-35 9-1,9-40,9-41 PART 3: APPLICATIONS OF THE AUDIT PROCESS TO BUSINESS CYCLES 17-Oct M 13 Cash Ch. 12 Pembrook Co. 12-41 12-3,12-39,12-43 19-Oct W 14 The Revenue Cycle Ch. 10, p.383-407 Mini-Scribe 10-80 10-1,10-12,10-31 26-Oct M 15 Revenue Cycle (cont d) Ch. 10, p.408-420 Sean Edwards 10-73 10-69,10-70,10-71 28-Oct W 16 ACL Application: Accounts Receivable Ch. 10 Floormart 10-56 -- 31-Oct M 17 ACL cont d Case 2 App. Pg.776 Appendix -- 2-Nov W 18 Acquisition Cycle and Inventory Ch. 11 Bargon Construction 11-53 11-15,11-55,11-65 7-Nov M 19 IN-CLASS TEST 2 - -- 9-Nov W 20 Fixed Assets Ch. 13 An Audit Senior s View 13-3 13-8,13-10,13-21 PART 4: COMPLETING THE AUDIT & PROFESSIONAL RESPONSIBILITIES 14-Nov M 21 Fraud Risk Ch.8 p.286-294 Super Computer Services 8-57 8-4,8-10,8-25 16-Nov W 22 Fraud Detection Ch. 8 p.294-317 Martha Stewart Case 8-26,8-34,8-47 21-Nov M 23 Completing the Audit Ch. 15 Subsequent Events 15-41 15-8,15-14,15-41 23-Nov W 24 The Audit Report Ch..16 p.615-629 Billings Container Co. 16-40 16-3,16-14,16-42 28-Nov M 25 Professional Conduct Ch..3 Hi-Sail Company 3-46 3-4,3-9,3-19 30-Nov W 26 Professional Conduct Ch. 3 Brent Dorsey Case 3-40,3-41.3-42 5-Dec M 27 7-Dec W 28 Course Review MAJOR CASE: ENRON & ANDERSEN (must be submitted by 5pm Friday Dec. 2) Enron /Andersen Case * Students should endeavor to complete all of the multiple choice questions in each chapter as well as the practice problems noted below. ACC 380K.4 Course Syllabus, Fall 2005 5