BA 120 AUDITING THEORY Course Outline First Semester : AY 2009 to 2010 DEBBIE CHUA-WONG Tuesday/Thursday 10:00 AM to 12 NN THDE / Room

307 Consultation schedule: Wed 9:30 AM to 5:00 PM UPPFI Office Tues / Thurs 1:30 PM to 2:30 PM Room 201-A GAVIN LEE Wednesday / Friday 1:00PM to 3:00PM Section WFIK / Room 307 Consultation schedule: Tues / Wed / Thurs / Fri 4:00PM to 6:30PM Room 213-E

COURSE DESCRIPTION

The course covers the principles and standards that govern the audit process Although the course will focus on financial statement audits, it will also discuss other attestation and assurance services

COURSE OBJECTIVES 1. To introduce the students to the nature and types of attestation and assurance services that are provided by accountants 2. To make the students understand the Generally Accepted Auditing Standards and the audit process 3. To equip the students with the skills necessary in the development of audit procedures in order to achieve specific audit objectives 4. To familiarize the students with the factors that are considered in the assessment of audit risk 5. To acquaint the students with the ethical and legal responsibilities of Certified Public Accountants as professionals / practitioners 6. To familiarize the students with the different types of attestation and assurance reports

BASIC REFERENCES 1. David N. Ricchiute, Auditing and Assurance Services, 8th edition 2. Auditing standards can be downloaded from http://www.aasc.org.ph/ 2.1. Philippine Auditing Practice Statements (PAPS) 2.2. Philippine Standards on Assurance Engagements (PSAE) 2.3. Philippine Standards on Auditing (PSA) 2.4. Philippine Standards on Quality Control (PSQC) 2.5. Philippine Standards on Related Services (PSRS) 2.6. Philippine Standards on Review Engagements (PSRE) 3. Republic Act 9298 (The Philippine Accountancy Act of 2004) 4. Code of Professional Ethics for Professional Accountants

Page 1 of 6

Topic Introduction to the course

Related Reading

Discussion of the course outline

An introduction to Assurance Services Auditing Defined The Public Accounting Profession The Objectives, Scope, and Responsibilities of an Independent Auditor in Undertaking an Audit

Chapter 1, Ricchiute R.A. Num. 9298 PSA 120 Framework of PSA PSA 200 Objectives & General Principles of FS Audit Ricchiute

Standards, Materiality, and Risk

Generally Accepted Auditing Standards Audit Risk and Materiality Control of Quality of Audit Work

Chapter 2 : Standards, Materiality, and Risk Standards:

Professional Ethics

PSA 220 (Rev) Quality Control of Audit of Historical Info PSA 320 Audit Materiality PSQC 1 QC for Firms that Perform Audits & Review Ricchiute

Code of Ethics

Chapter 4 : Professional Ethics Standards:

Legal Liability

Code of Ethics for Professional Accountants Ricchiute

Fraud and Error Detecting Errors and Irregularities

Chapter 5 : Legal Liability Standards:

Reports

PSA 240 (Rev 2005) Fraud PSA 250 Laws & Regulations PSA 260 Communication of Audit Matters Ricchiute

Reports on Audited Financial Statements Considering an Entitys Ability to Continue as a Going Concern

Chapter 3 : Audit Reports Standards:

PSA 700 (Rev) The Auditor's Report PSA 710 Comparatives PSA 720 Other Information PSA 800 The Auditor's Report on Special Purpose Audit Engagements

First Long Examination : July 20, 2009 (Monday) Evidence and the Audit Process Ricchiute:
Page 2 of 6

Topic

Related Reading

Audit Evidence Working Papers Engagement Letters Client Representations Planning and Supervision

Chapter 6 : Evidence Standards:

PSA 230 (Rev) Audit Documentation PSA 500 (Rev) Audit Evidence PSA 520 Analytical Procedures PSA 540 Accounting Estimates PAPS 1000Ph Audit Evidence - Practical Problems PAPS 1013 Electronic Commerce Ricchiute:

Chapter 7 :The Audit Process & Detecting Fraud Standards:

Internal Control and Computer Information Systems

PSA 210 Terms of Audit Engagements PSA 300 (Rev) Planning an Audit PSA 330 Procedures in Response to Assessed Risks PSA 315 Understanding the Entity PSA 510 Initial Engagements - Opening Balance PSA 545 Fair Value Measurements PSA 550 Related Parties PSA 570 Going Concern PSA 600 Using the Work of Another Auditor PSA 610 Considering the Work of Internal Auditing PSA 620 Using the Work of an Expert Ricchiute

Accounting Information Systems Consideration of Internal Control

Chapter 8 : Internal Control

Sampling in Tests of Control

Ricchiute

Chapter 9 : Audit Sampling Standards

PSA 530 Audit Sampling

Second Long Examination : August 17, 2009 (Monday)

Sales and Receipts Transactions Accounts Receivables and Cash Balances

Ricchiute:

Chapters 10 : Sales & Cash Receipt Transactions Chapters 11 : A/R and Cash Balances

Page 3 of 6

Topic Standards:

Related Reading

Purchases and Cash Disbursements Accounts Payable, Prepaids, and Accrued Liabilities

PAPS 1000 Inter Bank Confirmation Procedures PSA 505 External Confirmations Ricchiute

Chapter 12 : Purchases and Cash Disbursement Transactions Chapter 13 : A/P, Prepaids, and Accrued Liabilities Ricchiute

Personnel and Payroll

Inventory and Fixed Assets

Chapter 14 : Personnel and Payroll Ricchiute

Investments, Debt, and Equity

Chapter 15 : Inventory and Fixed Assets Ricchiute

Chapter 16 : Investments, Debt, and Equity Standards:

PAPS 1012 Auditing Financial Derivatives

Third Long Examination : September 7, 2009 (Monday) Completing an Engagement Ricchiute

Chapter 17 : Completing an Audit

Standards:

Other Assurance and Attestation Services

PSA 560 Subsequent Events PSA 580 Management Representations Ricchiute

Chapter 18 : Other Assurance and Attestation Services

Standards:

PSAE 3000 (Rev) Assurance Engagements Other Than Audit PSAE 3400 (previously PSA 810) Prospective Financial Information PSRE 2400 (previously PSA 910) Engagements to Review FS PSRE 2410 Review of Interim Financial Information PSRS 4400 (previously PSA 920) Agreed Upon Procedures PSRS 4410 (previously PSA 930) Compile
Page 4 of 6

Topic

Related Reading Financial Information

PAPS 1004 BSP Auditors & External Auditors PAPS 1005 (Revised) Audit of Small Entities PAPS 1006 Audit of Bank FS PAPS 1010 Environmental Matters PAPS 1014 Reporting on Compliance with IFRS PSA 402 Audit Considerations for Service Organizations

Comprehensive Final Examination : September 21, 2009 (Monday) Cases / Reports

GRADING SCHEME Long Exam #1 Long Exam #2 Long Exam #3 15 % 15 % 15 % Final Exam Quizzes Reports / Cases 20 % 20 % 15 %

GRADING SCALE 1.00 = 1.25 = 1.50 = 1.75 = 2.00 = 97 to 100 93 to less than 97 89 to less than 93 85 to less than 89 81 to less than 85 2.25 = 2.50 = 2.75 = 3.00 = 4.00 = 5.00 = 77 to less than 81 73 to less than 77 69 to less than 73 65 to less than 69 60 to less than 64 Below 60

REMINDERS 1. All exams will be departmental. Quizzes may or may not be departmental. 2. All students are required to submit a 3 x 5 index card with the following information: full name, nickname, student number, contact phone number, email address, home address, and recent photo (upper right corner). 3. All assigned work should be written in legal-size yellow paper. Selected assigned exercises may be required to be submitted during/after class discussion. 4. Students are expected to bring pen, paper, calculator, notebook, and textbook to class. No borrowing of these things will be allowed during quizzes, exams, and other graded class activities. 5. MISSED QUIZZES, HOMEWORK, AND/OR CLASS PARTICIPATION: 5.1. There will be no make-up for missed quizzes, homework, and graded class participation. 5.2. A missed quiz, homework, or graded recitation shall be given a grade of zero if the reason for missing this is not valid. (It is the students responsibility to inform the instructor the reason for his/her absence and to provide the corresponding proof.) 6. MISSED LONG AND/OR FINAL EXAMINATIONS: 6.1. If a student fails to take an exam for health or valid reasons, the student will be given a make-up examination after submitting the valid written excuse duly signed by doctor or any other authorized signatory, as the situation may require
Page 5 of 6

6.2. If a student fails to take an exam and does not have a valid reason, the student will get a grade of zero for the missed examination. 7. BONUS POINTS: 7.1. A student shall be entitled to bonus point/s in the quizzes and/or exams only if his/her grade in the quiz or exam is at least 65% WITHOUT the bonus points. 8. ATTENDANCE: 8.1. University rule on absences shall be enforced (maximum of six absences) 8.2. More than 30 minutes tardiness is equivalent to absence 8.3. Students who drop the course shall only be considered officially dropped upon submission of the duly processed Instructors Copy of the Dropping Slip. Deadline for dropping Deadline for filing leave of absence End of classes Final Examination September 9, 2009 (Wednesday) September 22, 2009 (Tuesday) October 8, 2009 (Thursday) October 12 to 20, 2009

8.4. If a student does not officially drop and fails to attend the remaining class session and fails to take the exams without valid reasons, he/she will be given a grade of 5.00 for the course, in accordance with University rules 9. GRADE SOLICITATION: the University rule on grade solicitation shall be enforced ARTICLE 194: PROHIBITION AGAINST GRADE SOLICITATION No student of the UNIVERSITY shall SOLICIT directly or indirectly (ask any person to recommend him to his/her professor or professors) any grade FROM AN INSTRUCTOR (in his record, examination paper, or final report of grades). Any student violating this rule shall lose credit in the subject or subjects regarding which such (recommendation) SOLICITATION is made (the fact that a student is thus recommended shall be prima facie evidence that the recommendation is made at the request of the student concerned), WITHOUT PREJUDICE TO THE FILING OF A CASE FOR DISCIPLINARY ACTION. 10. Take note of the release of final grades and the period given for any corrections or objections regarding grade recording and/or computations. (These will be announced during the final exam.) Grades submitted after the lapse of the objection period will be final and irrevocable. 11. During class hours, please turn off all mobile phones, PDAs, etc., or put these on silent mode.

Page 6 of 6