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EAC 4412 Advanced Auditing


Course Description

Applies auditing principles to audit situations. Introduces audit practice research and theory issues. Discusses financial auditing issues from the perspectives of management, accountants, internal auditors, audit committees, and external auditors

Course Objectives

After completing this course students will be able to:

  • Explain the current issues in auditing
  • Describe the auditing procedures and practices in general
  • Discuss the development of audit programs
  • Discuss the audit procedures used to obtain audit evidence
  • Explain the auditor responsibilities under securities and exchange requirements
  • Discuss the ethical and other issues encountered by practicing auditors

Week 1


Lecture: Course Welcome
Lecture: Course Introduction

Outcomes

 After completing this lecture students will be able to:

  • Set the tone for the course
  • Describe learning objectives
  • Provide practical tips on how to survive and thrive in the course
Lecture: Interdependent Auditor: A History Lesson

Outcomes

After completing this lecture students will be able to:

  • Discuss the history of the independent auditing profession in the United States
  • Discuss the status of U.S. independent auditing today
Lecture: Audit Planning: General

Outcomes

After completing this lecture students will be able to:

  • Practice and plan an audit
  • Explain engagement acceptance
  • Explain Engagement letters
  • Discuss preliminary planning procedures
  • Prepare a time budget
  • Explain the audit planning documentation
Lecture: Audit Planning: Risk Assessment

Outcomes

After completing this lecture students will be able to:

  • Explain the risk assessment portion of the audit planning process
    • Explain the entity and its environment
    • Assess the risk of material misstatement
    • Assess the risk of fraud

Week 2


Lecture: The Role of the Auditor

Outcomes

After completing this lecture students will be able to:

  • Distinguish between auditor and management responsibilities
  • Explain the importance of auditor independence
  • Review GAAS
Lecture: Workpaper Technique

Outcomes

After completing this lecture students will be able to:

  • Describe basic workpaper technique
    • Describe the file organization
    • Describe the types of workpapers
    • Describe the workpaper formatting
Lecture: Auditing Cash

Outcomes

After completing this lecture students will be able to:

  • Explain the risk assessment procedures related to auditing cash
  • Discuss the financial statement assertions and audit objectives for cash
  • Describe substantive audit procedures in general
  • Describe substantive audit procedures for cash
  • Explain the practical cash audit considerations
Lecture: Auditing Cash

Outcomes

After completing this lecture students will be able to:

  • Explain the risk assessment procedures related to auditing cash
  • Discuss the financial statement assertions and audit objectives for cash
  • Describe substantive audit procedures in general
  • Describe substantive audit procedures for cash
  • Explain the practical cash audit considerations
Lecture: Auditor Independence: Practical Consideration

Outcomes

After completing this lecture students will be able to:

  • Explain the importance of auditor independence and apply it into a practical situation

Week 3


Lecture: Audit Documentation

Outcomes

After completing this lecture students will be able to:

  • Explain the conceptual transition from audit working papers to audit documentation
  • Explain the audit documentation objectives in general
  • Describe audit findings/issues documentation requirements
  • Describe documentation retention requirements
  • Identify other factors impacting audit documentation requirements
Lecture: Audit Programs

Outcomes

After completing this lecture students will be able to:

  • Explain the purposes of audit programs
  • Explain the purposes of planning and control
  • Promote audit efficiency and effectiveness
  • Demonstrate compliance with professional standards
  • Create/edit an audit program
Lecture: Auditing Accounts Receivable 

Outcomes

After completing this lecture students will be able to: 

  • Explain and practice auditing accounts receivable (A/R)
  • Explain risk assessment procedures related to auditing A/R
  • Explain financial statement assertions and audit objectives for A/R
  • Describe substantive A/R audit procedures in general
  • Describe substantive A/R audit procedures for confirmations
  • Identify the practical A/R audit considerations 
Lecture: Audit Confirmations

Outcomes

After completing this lecture students will be able to:

  • Consider audit testing in general
  • Consider audit confirmations specifically
    • Why confirm
    • Types of confirmations
    • Timing
    • Management restrictions
    • Alternative procedures for nonresponders

Week 4


Lecture: Auditing Inventory

Outcomes

After completing this lecture students will be able to:

  • Explain and practice auditing inventory
  • Explain risk assessment procedures related to inventory
  • Explain the financial statement assertions and audit objectives for inventory
  • Describe audit procedures and inventory observation
  • Describe audit procedures and inventory valuation
  • Explain sampling when auditing inventory
  • Identify practical inventory audit considerations
Lecture: Audit Risk and Materiality

Outcomes

After completing this lecture students will be able to:

  • Describe audit-related risk in general
  • Explain financial statement materiality
  • Discuss when to consider risk and materiality
  • Explain audit response to risk
  • Explain risk assessment techniques
  • Explain inherent and control risk
  • Describe how to evaluate audit findings
  • Describe the effect of misstatements on the auditor’s report
Lecture: Auditing Accounting Estimates

Outcomes

After completing this lecture students will be able to:

  • Explain the accounting estimates in general
  • Describe the estimation process
  • Explain how to evaluate accounting estimates
  • Explain how to audit accounting estimates

Week 5


Lecture: Auditing Property, Plant, and Equipment

Outcomes

After completing this lecture students will be able to:

  • Explain and practice auditing property, plant, and equipment (PP&E)
  • Explain risk Assessment procedures for PP&E
  • Discuss the financial statement assertions and audit objectives for PP&E
  • Describe substantive PP&E audit procedures
  • Discuss the practical PP&E audit considerations 
Lecture: Internal Control: General

Outcomes

After completing this lecture students will be able to:

  • Define internal control
  • Explain the components of internal control:
    • Control environment
    • Risk assessment
    • Information and communication system
    • Control activities
    • Monitoring
  • Explain the consideration of internal control
  • Describe techniques used to obtain internal control understanding

Describe the auditor’s internal control communication responsibility

Lecture: Internal Control: Practical Consideration

Outcomes

After completing this lecture students will be able to:

  • Describe the importance of the private accountant ethics
  • Describe the internal control in a practical situation

Week 6


Lecture: Auditing Accounts Payable and Accrued Liabilities

Outcomes

After completing this lecture students will be able to:

  • Explain and practice auditing accounts payable and accrued liabilities
  • Explain risk assessment procedures for accounts payable and accrued liabilities
  • Explain the financial statement assertions and audit objectives for accounts payable and accrued liabilities
  • Describe accounts payable audit procedures, general
  • Describe accounts payable audit procedures, confirmation
  • Explain accrued liability audit procedures
  • Describe practical accounts payable and accrued liability audit considerations
Lecture: Auditing Accounts Payable: CBI Holding Company, Inc.

Outcomes

After completing this lecture students will be able to:

  • Discuss a classic audit failure – CBI Holding Company, Inc.
Lecture: Management's Representations

Outcomes

After completing this lecture students will be able to:

  • Explain the management representations in general
  • Explain the need for written representations
  • Identify typical management representations
  • Discuss the consequences if management refuses to furnish written representations

Week 7


Lecture: Auditing Notes Payable

Outcomes

After completing this lecture students will be able to:

  • Explain and practice auditing notes payable
  • Explain risk assessment in auditing notes payable
  • Discuss the financial statement assertions and audit objectives for notes payable
  • Describe substantive notes payable audit procedures
  • Describe the practical notes payable audit considerations
Lecture: Audit Team Roles and Conflict

Outcomes

After completing this lecture students will be able to:

  • Explain the in-charge accountant's role in the audit team
  • Discuss the conflicts that may arise among audit team members
  • Identify audit team conflict resolution techniques
Lecture: Reporting

Outcomes

After completing this lecture students will be able to:

  • Describe the standard audit report for nonpublic company audits
  • Describe the standard audit report for public company audits
  • Explain the circumstances that result in the addition of  explanatory language to the auditor’s standard report
  • Identify the circumstances that may result in a qualified opinion, adverse, or disclaimer of opinion
  • Explain the auditor’s reporting on comparative financial statements

Week 8


Lecture: Auditing the Income Statement and Completing the Audit 

Outcomes

After completing this lecture students will be able to:

  • Explain auditing the income statement
  • Explain audit completion procedures in general
  • Describe the legal letter
  • Describe the client letter of representations
  • Discuss evaluating commitments, contingencies, and subsequent events
  • Identify the final audit completion steps
Lecture: Enron

Outcomes

After completing this lecture students will be able to:

  • Explain a major recent audit failure that led to the ruin of a major auditing firm
  • Explore the audit risks associated with aggressive accounting practices
  • Identify the factors that contributed to the Enron collapse

The course description, objectives and learning outcomes are subject to change without notice based on enhancements made to the course. November 2013