Acctg 439   Auditing

Course Overview
Acctg 439 examines fundamental concepts in auditing related to the examination of financial statements and other assurance services. The course is divided into three study sections as follows:

The Auditing and Assurance Environment: The nature of auditing and auditing firms, audit reports, and generally accepted auditing standards are introduced. The section also examines the code of professional conduct, auditor's legal liability and auditors' and managements' responsibilities.

The Auditing Process: The section begins with obtaining an understanding of the concepts of audit evidence, audit risk and materiality which provides the foundation for our discussion on the auditor's study of the client's internal control structure, assessment of control risk and assessment of fraud.

Application of Process to Cycles: The concepts learned in the second section are applied to the audit of one cycle, revenue and collection. The goal is to be able to evaluate an entity's internal control structure and to design appropriate audit tests. Audit sampling is applied to the accumulation of audit evidence. We conclude with a brief overview of completing the audit.
[M] 3 credits.


Course Objectives
When you successfully complete this course, you will have developed and/or enhanced the following skills:
  1. Demonstrate an understanding of the different types of assurance and non-assurance services performed by CPAs.

  2. Describe the purpose and content of the Generally Accepted Auditing Standards and the Statements on Auditing Standards as our foundation for the study of audit;
    a.  Identify how various actions result in a failure to comply with GAAS.

  3. Demonstrate an understanding of the different parts of an audit report.
    a.  Specify the conditions required to issue a standard unqualified audit report.
    b.  Specify the cirumstances when other types of reporting are required.
    c.  Draft the appropriate report for a given situation.

  4. Describe the purpose and content of the AICPA Code of Professional Conduct.
    a.  Apply AICPA Code rules and interpretations to ethical situations.

  5. Demonstate an understanding of the primary legal concepts and terms related to accountants' liability.
    a.  Identify accountants' liability to various parties in scenarios.

  6. Differentiate managements' and auditors' responsibilities regarding a publicly-traded company.
    a.  Describe how the SAS's have evolved to help auditors assess the risk of fraud.

  7. Demonstrate an understanding of the types of evidence an auditor might gather and the characteristics that determine their persuasiveness.
    a.  Identify and apply the most appropriate type of evidence given a situation.
    b.  Apply analytical review to identify risk areas in a company.

  8. Apply the concepts of risk and materiality to an audit.
    a.  Demonstrate the ability to use the audit risk model.
    b.  Apply understanding of risk and materiality to fraud awareness and response when fraud is suspected.

  9. Demonstrate an understanding of how to assess internal control (control risk) and how this assessment impacts the level of testing of controls and future substantive tests (planned detection risk).

  10. Integrate and identify what is completed in the phases of the audit process.
    a.  Design audit program demonstrating transaction-related, balance-audit objectives and evidence mix.
    b.  Evaluate evidence gathered related to specific audit program.

  11. Apply sampling concepts and methodology to the audit plan for the sales and collection cycle.

Course Prerequisites
Acctg 331, Acctg 433; MIS 250.



Interested in Earning an MBA Degree?