Stan Ross Department of Accountancy

Accountancy 5400 - Principles of Auditing

Spring 2015
Professor Douglas R. Carmichael
Office hours by appointment
Saturday 11 am to 1 pm and 5pm to 6pm

Box #B-12-225
Office # 13-252
Telephone 646-312-3197
douglas.carmichael@baruch.cuny.edu

Course Objectives
The objectives of this course are to help students:
Understand the fundamental role of auditing and auditors in a free-market economy and the
relation of that role to corporate governance.
Develop an appreciation of the importance of personal and professional ethics in fulfilling
that role and the regulatory requirements of the Sarbanes-Oxley Act, SEC, PCAOB, FASB, and
state boards of accountancy.
Develop, use and apply audit skills and evidence gathering tools and techniques, including
risk assessment and development of responses to that assessment.
Develop the ability to communicate audit results in written and oral form.
Mission of the Department of Accountancy
The departments mission is to provide accounting knowledge to students with majors in accounting
and beyond. Consistent with the Zicklin Schools mission, the department seeks to provide high
quality, high value, education to enhance the professional aims of its students.
The departments undergraduate program is designed to help students obtain the technical tools,
general background, and high ethical standards necessary for successful careers in accounting. The
program focuses on the development, measurement, analysis, validation, and communication of
financial and other information. Emphasis is placed on enhancing the students ability to understand
the environment and the broad implications of the use of accounting information in decision-making.
An important goal of the department is that Baruchs accounting graduates will continue to become
leaders in business, not-for-profit organizations, and government.
Overview of Course Content and Description
The course uses a lecture-discussion approach with reading and exercise assignments in a current
auditing textbook. Students are also expected to identify current events relevant to the course and
bring that information to bear on the classroom discussions.
Professional ethics is covered early in the course to emphasize the importance of an ethical
framework for the exercise of an auditors professional judgment throughout the audit process.
The course explains the audit process of planning, performance, and communication with an emphasis
on real world aspects of auditing. Both an audit of financial statements alone and an integrated audit
of financial statements and internal control over financial reporting are covered, but the emphasis is
on the integrated audit of a public company. The topics are detailed in a separate list of reading and
homework assignments.
Course Materials and Resources
Required: Auditing & Assurance Services (6e), Louwers, et al., McGraw Hill, 2015.
Recommended: Auditing & Systems Exam Questions, Gleim, (1-800-874-5346)
https://www.gleim.com/products/productdetails.php?proSell=EQE+AUD
Access to Contemporary Developments
New York Times: www.nytimes.com
www.collegejournal.com

Wall Street Journal:

Rita Ormsby, the Accounting Librarian, is available to assist students and faculty in accessing Newman
Library resources:
Rita.Ormsby@baruch.cuny.edu

Grading Policy:
Final Exam
Midterm Exam
Class Participation

50%
35
15
100%

The exams consist of objective questions, e.g., multiple-choice. Exams are reviewed only in the class
period immediately after the exam. Makeup exams are given only at the discretion of the instructor,
and, if given, are essay exams. A makeup final exam must be arranged through Baruch College and is
an essay exam. The exams are based on material in the textbook and on material covered in the class
lecture and discussion.
The class participation grade is based on the quality of your contribution to the class. You should read
all assigned material and prepare all homework assignments before the assigned class. You will be
called on in class to explain your answers to homework assignments. There may also be in-class
writing assignments. Your class behavior is an important aspect of this grade. Disruptive behavior,
e.g., talking to fellow students during class, repeated lateness, etc., can result in zero credit and lower
your grade by at least one letter, e.g., from a B- to a C-.
Academic Integrity
Academic integrity is particularly important for students of auditing. An auditor is expected to act with
integrity and objectivity in providing all professional services and adhere to the Professional Code of
Conduct. A student of auditing is expected to act with integrity and objectivity, and must also adhere
to the principles of academic honesty. Baruch Colleges policy on academic honesty states:
Academic dishonesty is unacceptable and will not be tolerated. Cheating, forgery, plagiarism, and
collusion in dishonest acts undermine the colleges educational mission and the students personal
and intellectual growth. Baruch students are expected to bear individual responsibility for their
work, to learn the rules and definitions that underlie the practice of academic integrity, and to
uphold its ideals. Ignorance of the rules is not an acceptable excuse for disobeying them. Any
student who attempts to compromise or devalue the academic process will be sanctioned.

Baruch Colleges academic honesty website provides further information on the requirements:
www.baruch.cuny.edu/academic/academic_honesty.html
You should review the information on the website and adhere to the principles presented.
1
2

1-31
2-7

Auditing and Assurance Services (Ch. 1)

Professional Standards (Ch. 2)

3
4
5

2-14
2-21
2-28

Professional Ethics (Module B)

Legal Liability of CPAs (Module C)
Engagement Planning (Ch. 3)

6
7

3-7
3-14

8
9

3-21
3-28

1
0
1
1

4-18

Management Fraud and Audit Risk (Ch. 4); App.4B

Midterm Exam/Risk Assessment and Internal
Control Evaluation(Ch.5)
Audit Sampling (Modules E and F)
Employee Fraud and Audit of Cash (Ch. 6); App. 6A
and B
Revenue and Collection Cycle (Ch. 7); App. 7A and
B
Acquisition and Expenditure Cycle (Ch. 8)
Production Cycle (Ch. 9)

1
2
1

5-2

Finance and Investment Cycle (Ch. 10)

5-9

Completing the Audit (Ch. 11)

4-25

1.23 to 1.51; 1.55

2.26 to 2.51; 2.52; 2.59;
2.60
B.18 to B.44; B.58; B.59
C.29 to C.60; C.74
3.27 to 3.52; 3.53 (PCAOB
only); 3.59
4.20 to 4.50; 4.61
5.33 to 5.60; 5.63
E.25 to E.50; F.27 to F.50
6.24 to 6.47; 6.52
7.29 to 7.59; 7.72 (7.65
extra credit)
8.23 to 8.40; 8.42; 8.43;
8.52;
9.20 to 9.44; 9.50; 9.55
10.22 to 10.46; 10.51;
10.53
11.31 to 11.51; 11.64;

3
1
4

5-16

Reports on Audited Financial Statements (Ch. 12)

Final Exam
2

5-

11.70
12.30 to 12.44; 12.53