ACCT 510 Internal Audit / Forensic Accounting College of Charleston Spring 2017 Instructor: David L. Coss, Ph.D., Office: Tate 314 Office hours: MWF 10:00 12:00 Office phone: 953-9204 E-mail: cossdl@cofc.edu Classes: 12:00 pm 12:50 pm MWF Beatty Center 216 1. COURSE DESCRIPTION: ACCT 510 - Internal Audit / Forensic Accounting This course provides a solid foundation for building skills in internal auditing and forensic accounting techniques, including gathering, interpreting, and documenting evidence. In this course we examine the investigative techniques used by accountants to conduct forensic examinations as well as the common schemes and techniques used to commit fraud. The skills acquired will enable you to assist businesses in detecting, investigating, documenting, and preventing fraud. The course also introduces you to the many professional opportunities available to forensic accountants. Prerequisite Admittance to the graduate accounting program 2. REQUIRED MATERIALS: Textbook: Forensic Accounting and Fraud Examination 2 nd edition, by Hopwood, Leiner & Young. All other case studies and journal articles will be provided via Oaks by the professor. Page 1
3. STUDENT PREPARATION: Students are expected to complete all assigned case and journal article readings prior to the class in which they are covered. To be successful in this course you will need to be fully engaged in the course material and the class discussions. If you are not prepared to treat this course as a serious commitment, you should be prepared for a substandard grade. You paid the tuition; it s up to you to get your money's worth. 4. COURSE OBJECTIVES: The objectives of this course are to develop a working knowledge of: 1. Implement the best practices used by forensic accountants, including investigative techniques, standards of proof, and report format used to support their conclusions. 2. Describe the types of research and the wide array of investigations that forensic accountants are customarily engaged to conduct. 3. Discuss the various roles undertaken by forensic accountants, as well as their requirements and certifications. 4. Differentiate roles and responsibilities of the financial statement auditor and the forensic investigator. 5. Summarize the red flags used by forensic accountants to detect fraud. 6. Assess the objectives of the forensic accountant called in as part of the fraud investigation team. 7. Describe and practice professional skepticism. 8. Evaluate the fraudulent schemes commonly encountered by the forensic accountant. 9. Plan a forensic investigation by gathering and documenting evidence, including cases where there is known or suspected fraud. 10. Discuss the professional ethical responsibilities of the forensic accountant and develop appropriate recommendations or strategies for resolving potential ethical dilemmas. 11. Identify internal controls or other methods that can be used to help prevent fraud. 5. School of Business Learning Goals: At the completion of this course, the student should understand the following: Communication Skills Students will be challenged to effectively present and critique information systems (IS) principles in the accounting context. Students will also be equipped with an understanding of accounting information system audit documentation and IT audit standards. Quantitative Fluency Students will gain an understanding of how accounting information systems are utilized by management to make strategic business decisions. Students will also gain knowledge of systems analysis and design. Global and Civic Responsibility Students will become aware of the current ethical issues associated with corporate use of information and technology, and common corporate policies that address these issues. Students will gain an understanding of computer fraud and abuse, and the necessary controls for mitigating these issues. Additionally, the ethical Page 2
responsibility of the accountant is emphasis through an understanding of the importance of designing an effective audit of an organization s accounting information system. Intellectual Innovation and Creativity After gaining training and exposure to database systems and the major accounting business cycles students will then design and develop an access database to be used to generate and analyze financial information. Synthesis By combining IS and accounting principles, students will be gain experience integrating knowledge from complementary disciplines and applying this knowledge to the analysis, design, implementation, evaluation, and audit of accounting information systems. SCHOOL OF BUSINESS LEARNING GOALS To stimulate Communication Skills, students will prepare written documents that are technically correct and consistent with professional writing practices. Additionally the course requires students to write a research paper on a current topic in realm of forensic accounting. Global and Civic Responsibility is promoted in this course by directly examining ethical situations and requiring that students recognize and be able to appraise the ethical dilemmas involved. Students will be encouraged to engage in discourse aimed at resolution of these dilemmas utilizing relevant discipline specific knowledge. The students Intellectual Innovation and Creativity will be heightened through the examination of complex case studies that involve domestic, international, and multi-national firms. These cases will challenge the students to consider the implications of business decisions while evaluating problems and opportunities in the business environment and there by Synthesis both classroom and non-classroom learning as related to complex and comprehensive tasks. The students will be challenged to apply analytical techniques to formulate creative solutions utilizing both discipline specific knowledge as well as the students own personal experiences. ACCOUNTANCY GRADUATE PROGRAM LEARNING GOALS The course relates to the accountancy graduate program learning objective of Ethical Behavior by specifically addressing the AICPA Code of Professional Conduct and ethical dilemmas, while requiring technically correct, clear, and concise oral and written presentations which address Effective Communication. The course is designed to develop Specialized Technical Skills and Knowledge within the area of forensic accounting. Guest speakers from professional practice will be joining the students in the classroom to provide real world insights and aid in Achieving a Broadened Perspective, while the articles and cases chosen intentionally cover multinational/international firms to address the Global Dimensions of audit. Page 3
6. GRADING DISTRIBUTION: Points Available Weekly Discussions contributions (12 @20 points) 240 2 forensic accounting case study assignments (2 @25 points) 50 Annotated Bibliography paper 100 Research Paper (5-6 pages) 160 Exam 1 150 Exam 2 150 Comprehensive Final Exam 150 1000 GRADING SCALE: 900-1000 points A 870 899 points B+ 800 869 B 770 799 points C+ 700 769 C 600 699 points D Below 600 points F a) Weekly Discussion Board: An effective and productive discussion requires the active participation of all students. Accordingly, the timely reading of assigned case studies and other materials and attendance and active participation in the discussions and analyses comprise a significant part (24%) of your final grade. A lecture will be presented on the weekly topic area each Wednesday to ensure that the key learning objectives are clearly presented and to provide a framework the online discussions. Each students are required to do the weekly readings posted on OAKs, and review the discussion questions for the week. This also requires that you find an article, which supports your views towards the questions. Then post you answer to the questions along with a summary of the article you read with a link to the article. Each Monday the online discussion will be synthesized and broken down to ensure a thorough coverage of the specific topic area. Developing opinions and learning to express those opinions in a group setting is critical to your success as a professional. Accordingly, during our in class and online discussions, you will be expected to express your thoughts and conclusions and to challenge the ideas presented within each assignment during every class. You should also feel free to challenge others (including me) on their points of views and positions taken. Although you may initially be uncomfortable with this level of participation, remember that everyone in the class is interested in your opinion and in most cases there is not just one correct answer. b) Annotated Bibliography paper. Students are required to write an annotated bibliography paper (2-3 pages) using the ten journal articles they used to support their weekly discussions. c) Individual Case study assignments: You will be responsible for completing two written cases during the semester. Each case is worth 25 points towards your final grade. Each case should be Page 4
written as a professional report that should be addressed to your supervisor. I will be grading each case on content primarily, but I will also be assigning part of your grade to spelling, grammar, and professionalism. Each case should be two to four pages in length as appropriate based on the requirements. Written reports are extremely important in forensic accounting. d) Research Paper: Students are required to write a research paper on a current forensic topic. Students must hae their paper s topic approved by the professor by Feb 15th. Appropriate topics for the paper include, but are not limited to: Behavior and judgment in forensic accounting Business valuation Computer forensic analysis Consumer frauds (online, other) Corruption (corporate, governmental, Foreign Corrupt Practices Act) Cross-cultural issues in fraud Data analytics Expert witness activities Ethics (judgment, behavior) Fraudulent financial reporting Governance and fraud Insurance recovery Internal controls/coso/erm Investment scams Litigation support/services Pattern recognition and anomaly detection Professional regulation and policy issues Psychology and social psychology of fraud Tax fraud (individual or corporate) Technology for detecting, investigating or committing fraud Theft of corporate assets (employees, managers, third parties) e) Exams: are designed to challenge your understanding of the course material. This includes the case studies, academic papers and class discussions. The exams will be essay questions or case study questions based on class material and discussions. A scheduled exam can only be taken at an earlier time if it is due to athletic participation or some other extracurricular activity in which the student is an official representative of the College. Appropriate documentation is required to support this claim. If, in advance, I am told that an exam will be missed due to either emergency medical attention for that student merely showing up at student health services is insufficient or a death in the student s immediate family (again, both with appropriate documentation), the exam will be considered an excused absence and arrangements can be made for a makeup exam. 7. General Policies Page 5
1. Attendance Policy: Attendance in this course is mandatory. Examinations and assigned materials will require attendance of all classroom lectures. Make-up examinations are not given. Late assignments are not accepted. If you are to be absent, assignments must be submitted prior to the due date with prior professor approval. I reserve the right to dismiss you from the course permanently if you miss more than four classes without university-approved documentation. 2. You should not walk in late for class. If unavoidable circumstances warrant you being late, please come in quietly and take a seat. If, for some extreme circumstance, you must leave the classroom, please do so silently. Eating in class, talking to classmates during class, and packing a backpack before the class has ended, is rude and disruptive behavior. 3. Please familiarize yourself with the College s Student Code of Conduct as you are bound by those rules in this course. Rude and disruptive behavior, sleeping, texting, and talking during the lecture are prohibited and I reserve the right to dismiss you from the course permanently if I deem your breech of the Code of Conduct severe. 4. HONOR CODE: Lying, cheating, attempted cheating, and plagiarism are violations of our Honor Code that, when identified, are investigated. Each incident will be examined to determine the degree of deception involved. Incidents where the instructor determines the student s actions are related more to a misunderstanding will handled by the instructor. A written intervention designed to help prevent the student from repeating the error will be given to the student. The intervention, submitted by form and signed both by the instructor and the student, will be forwarded to the Dean of Students and placed in the student s file. Cases of suspected academic dishonesty will be reported directly by the instructor and/or others having knowledge of the incident to the Dean of Students. A student found responsible by the Honor Board for academic dishonesty will receive a XF in the course, indicating failure of the course due to academic dishonesty. This grade will appear on the student s transcript for two years after which the student may petition for the X to be expunged. The F is permanent. The student may also be placed on disciplinary probation, suspended (temporary removal) or expelled (permanent removal) from the College by the Honor Board. Students should be aware that unauthorized collaboration--working together without permission-- is a form of cheating. Unless the instructor specifies that students can work together on an assignment, quiz and/or test, no collaboration during the completion of the assignment is permitted. Other forms of cheating include possessing or using an unauthorized study aid (which could include accessing information via a cell phone or computer), copying from others exams, fabricating data, and giving unauthorized assistance. Research conducted and/or papers written for other classes cannot be used in whole or in part for any assignment in this class without obtaining prior permission from the instructor. Students can find the complete Honor Code and all related processes in the Student Handbook at http://studentaffairs.cofc.edu/honor-system/studenthandbook/index.php Page 6
5. CELL PHONES: a. Set your phone to ensure that it makes no noise inside of this classroom. This means, either turn it off, or to silent, but not to vibrate before entering this classroom. b. Keep the cell phone out of sight for the entire class this means do not text and do not take messages during class. c. For all tests and in-class quizzes, a cell phone is not to be used as a calculator. Texting and/or internet usage during exams or quizzes will result in a failing grade for that exam. 6. The College of Charleston complies with the Americans with Disabilities Act (ADA). If you need accommodation for any disability, please let me know at the beginning of the semester so that I can accommodate your needs 7. The professor reserves the right to amend this syllabus as circumstances warrant. Page 7
DETAILED DAILY TEACHING SCHEDULE: Date Jan 11 Day Wednesday Area of lecture or tasks being completed in class. Introduction Discussion Board #1 Chapter 1 & Compare and Contrast Forensic acting and auditing Jan 13 Jan 16 Monday MLK Holiday No Class Jan 18 Wednesday Guest Speaker from DHG Chapter 2 Discussion Board #2 Legal and Regulatory Environment and Jan 20 Ethics Jan 23 Monday In class continuation of discussion #2. Jan 25 Wednesday Fraud Triangle and SOX compliance Chapter 15 Discussion Board #3 Week 3 Discussion Jan 27 Jan 30 Monday In class continuation of discussion #3. Feb 1 Wednesday Employee & Vendor Fraud Chapter 13 Feb 3 Discussion Board #4 Week 4 Discussion Feb 6 Monday In class continuation of discussion #4. Feb 8 Wednesday Financial Statement Fraud Chapter 14 Feb 10 Week 5 Discussion Discussion Board #5 Feb 13 Monday In class continuation of discussion #5. Feb 15 Wednesday Presentation of Research Paper Question Feb 17 Exam 1 questions given Feb 20 Monday Exam 1 Due Feb 22 Wednesday Fraud Prevention and Detection Chapters 5 & 6 Feb 24 Discussion Board #6 Feb 27 Monday In class continuation of discussion #6. Mar 1 Fraud Investigation and Evidence Wednesday collection process Mar 3 Discussion Board #7 Mar 6 Monday No Class Spring Break Mar 8 Wednesday No Class Spring Break Mar 10 No Class Spring Break Mar 13 Monday In class continuation of discussion #7. Mar 15 Mar 17 Wednesday Physical, Documentary, Observational and Interview methods Discussion Board #8 Week 6 Discussion Chapters 7 & 8 Week 7 Discussion Chapters 9 & 10 Week 8 Discussion Mar 20 Monday In class continuation of discussion #8. Mar 22 Wednesday Forensic Science, Computer forensic, fraud Chapters 11 & 12 Page 8
report and litigation Mar 24 Discussion Board #9 Mar 27 Monday In class continuation of discussion #9. Mar 29 Wednesday Review Mar 31 Exam 2 Apr 3 Monday Apr 5 Organized Crime & Anti-money Wednesday Laundering Apr 7 Discussion Board #10 Apr 10 Monday In class continuation of discussion #10. Week 9 Discussion Divorce and Identity Theft Chapter 17 Chapter 18 Week 10 Discussion Apr 12 Wednesday Tax fraud Chapter 16 Apr 14 Discussion Board #11 Week 11 Discussion Apr 17 Monday In class continuation of discussion #11. Research Paper Due Apr 19 Wednesday Business Valuation Chapter 19 Apr 21 Discussion Board #12 Week 12 Discussion Apr 24 Monday In class continuation of discussion #12. Bibliography Paper Due Apr 26 Wednesday Apr 27 Thursday Reading Day May 3, Wednesday 12 pm 3 pm Section 01 Final Exam *** This syllabus is subject to change depending on the class progress and understanding of the class material. It is the responsibility of the student to update their syllabus and assignment schedules accordingly. ** Page 9