ACCT 4412 Auditing Syllabus Fall 2019 - Prof Hurley PDF

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Download ACCT 4412 Auditing Syllabus Fall 2019 - Prof Hurley PDF

Description

ACCT 4412: Auditing and Other Assurance Services – Fall 20191 Instructor Office E-mail Office Phone

Patrick Hurley 404G Hayden Hall [email protected] (not huskymail!!!) (617) 373-4648

Office Hours

Tuesday 3-4:30pm, Thursday 11am-12:30pm or by appointment

Lectures

Section 01 (11206): T/F, 8:00 – 9:40am, Hayden Hall 221 Section 02 (13139): T/F, 9:50 – 11:30am, Hayden Hall 221 Section 03 (13960): T 11:45am – 1:25pm, Tr 2:50-4:30pm, Hayden Hall 221

Course Materials • •

Textbook: Auditing and Assurance Services, 7th edition, Louwers, Blay, Sinason, Strawser, and Thibodeau (McGraw-Hill) Connect Plus Access: (for Auditing and Assurance Services, 7th edition – often included with textbook purchases. This is required for the course to do homework. However, you do not need a hard copy of the book; having the online book provided with Connect access is sufficient.

If you have not bought a text/package yet and are not sure if you will remain in this course, you can still register with Connect to do your first assignment by selecting the free trial option. Class Connect web page (if these links do not work there are direction sheets posted on Blackboard) Section 1 (T/F 8-9:40am) Section 2 (T/F 9:50-11:30am) Section 3 (T 11:45am-1:25pm; Tr 2:50-4:30pm) If you have any questions regarding Connect please direct these to McGraw-Hill tech support, either by visiting their website at: www.mhhe.com/support for helpful FAQ’s, or by calling 1-800-331-5094. Other materials will be handed out as necessary throughout the semester. Course Description This course is designed to provide you with a foundational understanding of financial statement auditing. We will focus first on the economic importance of auditing to the users of financial statements and to the general public, and discuss auditing’s fundamental role in capital markets (e.g., stock markets). Throughout the course, you will develop an understanding of topics that are relevant to external auditing professionals, such as: audit planning; risk

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Subject to change as we go throughout the semester, but I will discuss changes with the class before they are made.

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analysis and assessment; the role of internal controls within a company and how to test them; and how to conduct substantive testing. Course Learning Objectives •

Students will learn to think critically about auditing and about issues facing the accounting profession. Further, auditing is essentially trying to assess the validity of claims or assertions that someone has made. To this end, students will learn how to “interrogate” a claim/assertion, specifically learning the importance of evidence type and quality in supporting or refuting a claim or assertion’s truth.

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Students will learn the significant “players” and regulations in financial reporting and auditing (e.g., SEC, PCAOB, the Sarbanes-Oxley Act of 2002, etc.).

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Students will learn the importance of appropriate professional judgment throughout the course. Auditing is unlike many courses you’ve taken before in that many of the “correct” answers in auditing depend on various factors. This means you must apply appropriate judgment and be able to defend your answers, as opposed to activities in prior accounting courses like calculating cash flows from operations (e.g., ACCT 1201). This is why active participation is necessary for this course to work.

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Students will learn to identify potential risks and analyze their potential effects on the financial statements of a company. Further, when analyzing these risks, students will be able to determine their impact on the planning and conduct of the audit.

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Students will learn various types of audit evidence that can be used to support audit decisions, and which evidence types are better than others.

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Students will be able to document the rationale for auditors’ professional judgments and be able to effectively communicate those rationales.

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Students will (hopefully!) appreciate auditors’ role in business and society at large, including their ethical and legal responsibilities.

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Students will gain knowledge of different reports that auditors can issue and what they mean about the audited company.

My Approach to Teaching and Learning A few of you have had me as a professor for ACCT 1201, but many of you have not. I like to think I am pretty laid back, but ask that you show respect for the course and be involved in the conduct of each class. Specifically, this course (more so than ACCT 1201) requires active participation throughout the semester. I recommend that you attend all classes and read all required readings to fully appreciate the concepts presented in the course. Ultimately, you are fairly far along in your college experience by this point, and it’s up to you how much you want to put into (and, thus, get out of) this course. Pick whatever approach best suits your learning style and what you want to “take away” from this course. Do not be afraid to ask questions! This is probably a new topic for everyone in the course, and it’s likely that others will have the same questions. I am always happy to elaborate and help to the best of my ability, so please do not hesitate to ask questions or to give an answer even if you’re not sure it’s right. That’s how we learn as a group. If you are uncomfortable asking clarifying questions in class, please don’t hesitate to email me or attend office hours. I want to help out in any way that I possibly can to make this the best learning experience for you. 2

This course would be brutal if all I did was stand in front of you and lecture about auditing and auditing standards, etc. My goal is to have a lively and interactive class. This does not mean the course will be without lectures, but I am going to do my best to mix in other teaching methods to deliver the best product to you as students. Many weeks we will have an auditing case that we will perform in small groups and discuss as a class. These cases will vary in terms of topic, but they are designed to teach and simulate real activities that auditors perform. I will use videos to augment learning when I can. Further, the course will feature student groups giving presentations on notable frauds throughout the semester. This is an opportunity for you to develop a deep understanding of a fraud and to pass that on to your classmates in any way you choose (creativity is encouraged; if you think of a better way rather than just doing a slideshow presentation, go for it!). Ultimately, I want class to be more like an informative, active dialogue than someone talking at you for an hour and forty minutes twice a week. Help me make this as fun as possible for all of us! If you have (constructive) suggestions on how to improve the course, please reach out to me with them. Finally, a large part of my job is doing accounting research. I specifically do experimental auditing research, where I use psychological or economic theories to investigate auditors’ behavior and potential pitfalls they may encounter. Whenever possible, I am going to try to incorporate fun research demonstrations and some findings of prior research into the course. I am doing this for a few reasons. First, I want you to appreciate the fact that auditing, like many other professions, is highly dependent on individuals’ behaviors and judgments. We are all fallible. I want to point out some of these faults that we have in our judgments and decisions so that you are better aware of them when you are on co-op or working after graduation, whether that be in auditing or some other career path. I think that this will serve all of you well, no matter your concentration or intended job after graduation. Second, this will tell you more about yourself in some instances, and I sincerely hope you can learn from these presentations and apply the principles conveyed to not only professional work but to your everyday life. Third, learning about this stuff is fun, and can often bring the material “to life.” I sincerely hope that is the case. Course Evaluation Item Professionalism / Participation Connect Practice Problems Cases (3 graded – see class schedule) Fraud Presentation and Write-Up Midterm Exam Final Exam Total

Percent 10% 10% 25% 10% 20% 25% 100%

Final Course Grades I reserve the right to curve the class grades to achieve a desired distribution for the course. I will not curve your grades down, so any curve implemented will be to your benefit. Also, any curve will affect all students equally (i.e., I do not give special treatment to individual students). I curve at the end of the semester, not on each individual assignment/exam. The overall grade in this class will be determined by the following: Earned Credit

A

A-

B+

B

B-

C+ 3

C

C-

D+

D

D-

F

Grade 94-100

90-93

87-89

84-86

80-83

77-79

74-76

70-73

67-69

64-66

60-63

59 and below

Professionalism / Participation •

Your professionalism score is determined based on your attendance during the semester, the professor’s subjective evaluation of your behavior during the semester, and your contributions during class. You are expected to come prepared to all classes and meaningfully participate in class discussion. These are important aspects of active learning and professionalism. It’s likely that I will use Socrative (https://socrative.com) for at least a portion of participation, so please download the app to your smart phone or tablet and bring it to class. I will likely offer other activities throughout the semester to earn participation points that you can complete and turn in. However, these are not guaranteed, so the best way to improve your participation grade is through class discussion.

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Four or more absences, repeatedly coming late to class, and general unprofessional behavior will lower your professionalism score. If you have concerns about getting to class on time or will be missing a significant portion of classes, please let me know.

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Any behavior that disrupts or interferes with class (e.g., texting, talking with friends, browsing internet) is not appropriate. The main issue here is to please be considerate of your classmates and me and do not cause distractions or disruptions for others’ learning.

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Academic Honesty. Northeastern University is committed to the principles of intellectual honesty and integrity. All members of the Northeastern community are expected to maintain complete honesty in all academic work, presenting only that which is their own work in tests and assignments. If you have any questions regarding proper attribution of the work of others, contact your professor prior to submitting the work for evaluation.

In-Class Cases We will form small groups in which you will complete cases throughout the course. These cases will all have specific deliverables that differ depending on the contents of each case. I will collect deliverables from a subset of cases throughout the semester (i.e., I am not collecting every single case we do, but will collect a few to evaluate the work of your group). Fraud Presentations We will also break into groups (perhaps the same as the case groups) to research and present on prominent historical fraud cases. There will be one presentation per week, starting in Week 3, and presentation material will be fair game for exams. The rest of the class will receive a reading on the fraud of the week, but your group will be tasked with doing a deep dive and explaining what happened with the fraud, the auditors’ role, why the fraud was significant or important, etc. Be creative! I will provide a separate assignment sheet with more details as well as a schedule of presentation dates, group assignments, and group/fraud pairings. You do not need to dress up for these presentations. Exams There will be one interim exam and one final exam (both closed book). The final exam will focus mostly on the information covered after the midterm exam but will technically be cumulative (most likely a 70% new material / 30% earlier material split). Missed exams cannot be made up unless you receive 4

prior permission from the professor (requests made after the exam has started will be rejected). Excuses will be granted only for University recognized reasons. Homework (Connect) and Due Dates You will have homework assignments throughout the semester. The purpose of these assignments is to force you to go back to the material we learned to reinforce your knowledge. This should help to solidify concepts in your mind and provide you with a low-risk assessment of how well you grasp the material. You will receive two attempts for each homework assignment, and the higher of the grades will be the grade I use. Your homework assignments should be completed online through Connect (link provided on the first page of the syllabus). Although some homework assignments show different values they all count equally towards your homework grade (e.g., if you get an 85% on an assignment worth 55 points and a 95% on an assignment worth 40 points the 85% will not count more toward determining your homework grade) All assignments should be submitted by 11:59 pm on the due date specified on the calendar below. Homework assignments that are not submitted by the due date will automatically submit and are graded based upon work already performed. After the deadline has passed, the homework problems will be re-assigned in Connect as practice for students who wish to review them prior to the exam. Should you have any trouble submitting an assignment online, please contact me before the assignment is due for assistance. Pro Tip: once you read the syllabus, put a reminder in your phone for each homework assignment with alerts that come up 2 days and 1 day prior to its due date so you don’t forget. Schedule for Connect Assignments and Due Dates Note: these are subject to change, but will never be moved earlier

Applicable Chapter 1 2 3 4 6 5 Module E 7 11

10 multiple choice (50 points) 10 multiple choice (50 points) 6 multiple choice, 1 problem (55 points) 10 multiple choice (50 points) 10 multiple choice (50 points) 10 multiple choice (50 points) 10 multiple choice (50 points) 10 multiple choice (50 points) 8 multiple choice (40 points)

Due Date 11:59 pm Fri 9/13 Fri 9/20 Fri 9/27 Fri 10/4 Fri 10/11 Fri 10/18 Fri 11/1 Fri 11/8 Fri 11/15

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5 multiple choice, 1 problem (50 points)

Tue 12/3

Homework

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ACCT 4412 Tentative Class Schedule Note: Two sections meet T/F and one meets T/Tr, Tr and F dates are grouped together - DO NOT PRINT!!! This calendar is subject to change (INCLUDING EXAM DATES) Date

Day

Topic

Notes

Sept 5 / 6

Tr/F

Role/History of Auditing, SOX, etc. (Chapter 1)

Markets Activity

Intro to Audit Process and Management’s Assertions (Chapter 2)

Rosie’s East Case – IN CLASS

Sept 10 Sept 12 / 13 Sept 17 Sep 19 / 20 Sep 24 Sep 26 / 27 Oct 1 Oct 3 / 4 Oct 8 Oct 10 / 11 Oct 15 Oct 17 / 18 Oct 22 Oct 24 / 25

T Tr/F T Tr/F T Tr/F T Tr/F T Tr/F

Audit Planning (Chapter 3)

Assign Simply Soups Case

T Tr/F

In-class activity

Assign Bryan’s Amazing Animals Case

T

Fraud Presentations 1-5

Tr/F

MIDTERM EXAM

Oct 31 / Nov 1

Tr/F

Auditing the Revenue Cycle (Chapter 7)

Nov 14 / 15 Nov 19 Nov 21 / 22 Nov 26 Nov 28 / 29 Dec 3* Dec 6 – 13

Tesla Fraud Brainstorming Case – IN CLASS

Internal Control Evaluation (Chapter 5)

Sampling (Module E)

Nov 12

NO CLASS – TEGRITY LECTURE

Misappropriation of Assets Fraud and the Audit of Cash (Chapter 6)

T

Nov 7 / 8

Braun and Stallworth Case Pre-Assignment work for 9/24 class

Braun and Stallworth Case – IN CLASS

Management Fraud and Audit Risk (Chapter 4)

Oct 29

Nov 5

The Wave

T Tr/F T Tr/F

Andiola et al. (2018) – Sprandel, Inc. Case Completing the Audit (Chapter 11)

Fraud Presentations 1-5

Tr/F

Fraud Presentations 6-10

T

Audit Reporting (Chapter 12)

T TBD

Bryan’s Amazing Animals Due

NO CLASS – Designated Sprandel Case Day

T

Tr/F

Simply Soups Case Due

Tegrity Lecture to Finish Chapter 12 – No inperson class. Happy Thanksgiving! ☺

NO CLASS – THANKSGIVING BREAK! Trace Evals, Review for Final, etc.

Sprandel Case Due

FINAL EXAM (date and location to be announced) NOTE: Students are not allowed to take the final exam early.

*DMSB requires faculty members to set aside 15 minutes in class for online teaching evaluation. Please bring your laptop/tablet to class on this date to complete the evaluation. 6...