Spring 2015 (April 28)

"Ignorance is not a control"

"Hope is not a control"

[Subject to Change]

Watch this spot for announcements: Please let me know immediately if any of the due dates conflict with religious or cultural holidays. Check out http://www.youtube.com/watch?v=xUcxvwAQ_n4 or http://www.youtube.com/watch?v=1efDVBDLDDw Jan. 28: Wiley page number will be updated to reflect the 12th edition in the near future. >>>CHAPTER 3 QUESTIONS UPDATED--BE READY TO BE CALLED ON TO THEM NEXT WEEK<<< --Chapter 4 Questions also updated. --Mapping between Wiley editions linked after Wiley table. Feb. 10: New table added with questions to study from 12th edition of Wiley. Feb. 12: Exam seating charts posted: 3:30 Class and 7:00 Class Feb. 26: Midterm #2 Wiley questions mapped to 12th and 2015 editions. Questions linked for chapter 6. March 9: End of chapter questions added for Chapter 7. March 28: Final Exam Wiley questions mapped to 12th and 2015 editions. March 31: Chapter 11 questions linked. April 19: Team clients clients updated April 21: All flowchart clients posted! April 26: Questions added for Louwers, et al. textbook Modules E, F, and G. April 28: Link to Visio added. The file is 341MB. After you download the software, send me an email and I'll send you a product code so you can install the software.

WARNING: The MINIMUM penalty for plagiarism is an F in the course.

Required:

• [Hardcover, soft-cover, loose-leaf, or e-book style of] Auditing and Assurance Services, 6th Edition, Louwers, Ramsay, Sinason, Strawser, and Thibodeau 2015

• Highly recommended: Wiley CPA Exam Review 2014, Study Guide Auditing and Attestation [Paperback]
  [This book is the source of mid-term and final exam questions. It has the questions and the answers!]

             [There is both an 11th (Dec. 2013) and 12th (June 2014) editions of the 2014 study guide. Should not be any significant differences between the two, but try to get the 12th.
 The ISBN-13: 978-1118917909  ISBN-10: 1118917901  Edition: 12^{th, 768 pages.}

• Software: ACL that is included with textbook.

• Software: Microsoft Visio flowcharting software [Bring blank CD-R disk to my office to get free copy]

  Optional: Beginner's guide to Visio such as--

  • Microsoft Visio 2010 Step by Step or Microsoft Visio 2013 Step by Step depending on version you are using.

Useful Web Sites:

• Companion Web site for textbook: http://highered.mheducation.com/sites/0077862341/information_center_view0/index.html

• PCAOB Web site: http://www.pcaob.org/

  • PCAOB Audit Standards [for public companies]: http://pcaobus.org/Standards/Auditing/Pages/default.aspx
    
    

• AICPA Web site: http://www.aicpa.org/

  • AICPA Clarified Statement on Auditing Standards (for financial statements reporting after December 15, 2012)
    http://www.aicpa.org/Research/Standards/AuditAttest/Pages/clarifiedSAS.aspx
    
    
• IFAC (IAASB) Web site: http://www.ifac.org/ [ISAs: audit standards for the rest of the world]: http://www.ifac.org/publications-resources/2012-handbook-international-quality-control-auditing-review-other-assurance-a
  

• SEC Web site: http://www.sec.gov/

• California CPA Society
  
• The Institute of Internal Auditors [The IIA]
  • Los Angeles Chapter
  • San Fernando Valley Chapter
    
• ISACA for IT internal auditors
  • Los Angeles Chapter
• More web resources

 

XBRL International

XBRL US

ACCT 351 and 351COM are pre-requisites, not co-requisites. If you do not have the prerequisites you must drop the course or the Department office will drop you.

Course Objectives:

Conducting certified financial audits is a monopoly given to CPAs by the federal government. Financial auditing is at the core of what it means to be a CPA. CPAs also do tax work, estate planning, bookkeeping, executive searches, computer consulting, and many, many other accounting and non-accounting activities--but literally anybody who is not a CPA can do those things too. This course is the sole auditing course in the department’s accounting curriculum.  It will deepen your understanding of the accounting profession and help you identify yourself with the profession.  The course will consist of extensive class discussions and presentations among the members of the class and of work on the material in class.  It is designed to help you think and act like a competent accounting professional.  Expect to participate actively in the class.

The objectives of the course are:

>>>>>>>>Tentative Schedule of Assignments<<<<<<<<

Session	Subject	Textbook Chapters	Ancillary Materials/Assignments (SUBJECT TO CHANGE more end-of-chapter questions coming soon)
Week 1 1/19	Martin Luther King Day
1/21	30,000-foot view Introduction, audit and assurance services, and the CPA profession	1, 2, B	KPMG Aided New Century Missteps
Week 2 1/26	Reports on Audited Financial Statements  [SAS 58]	12	Perceptions of the Auditor Report
1/28	ACL Quick Reference Sheet ACL Getting Started Guide ACL_in_Practice [Source of exercises for assignment]		ACL Project Assignment
Week 3 2/2	Engagement planning	3	Questions: 3-53, 3-60, 3-62
2/4
Week 4 2/9	Management fraud & audit risk	4	Questions: 4-59, 4-62, 4-66, 4-67
2/11	Mid-Term Review
Week 5 2/16	Risk assessment: internal control evaluation Sarbanes-Oxley Act 2002	5	[Don't forget that Meet the Firms night is Tuesday 2/17]
2/18		2/18: Mid-Term #1 (Wiley equivalent of textbook Chapters 1, 2, 3, 4, and Module B (see mapping below)) [NOTE: Chapter 12 will be included on the final exam] [7pm class: Midterm will be first half of class, 7 to 8:15pm]
Week 6 2/23
2/25	Information systems auditing	H
Week 7 3/2	Employee fraud and audit of cash	6	6-52, 6-58, 6-59
3/4	Flowcharting Project Flowcharting Guidelines Flowcharting Samples		ACL Project Due
Week 8 3/9	Revenue and collection cycle	7	Fraud Detection
3/11			7.60, 7.64, 7.71
Week 9 3/16	Acquisition & expenditure cycle	8   (Make sure to also read Appendix C: The payroll cycle)	8.41 and 8.49
3/18		Mid-Term #2 (Wiley equivalent of textbook Chapters 5, 6, 7 and Module H (see mapping below)) [7pm class: Midterm will be first half of class, 7 to 8:15pm]
Week 10 3/23	Production Cycle	9	9.46 and 9.60
3/25
Week 11 3/30	Completing the audit	11	Chapter 11 Questions (11.55, 11.58, 11.71)
4/1
Week 12 4/6	SPRING BREAK
4/8
Week 13 4/13	Sampling, Attribute Sampling, Variable sampling	E, F from Louwers, et al. textbook	E.65, E.71, E.72 and F.52, F.63, F.68 from Louwers, et al. textbook
4/15
Week 14 4/20	Special activities to improve business and audit acumen.
4/22			[Thursday 4/23: Awards Banquet]
Week 15 4/27	Project consultation days
4/29	Project consultation days
Week 16 5/4	Variable sampling (Overview of MUS) MUS Example in Excel Other Public Accounting services	G A from Louwers, et al. textbook	Flowcharting Project Due 5/4 Even multiple-choice questions between G.32 and G.52 from Louwers, et al. textbook
5/6	Catch up and review [Last Class]
Week 17 5/11	Final Exam Week
5/13	FINAL EXAM: 3PM Class:   [3pm to 5pm] 7PM Class: [8pm to 10pm]  Wiley equaivalent of textbook Chapters 8, 9, 11, 12 and Modules E, F, G (see mapping below) [NOTE: Chapter 12 from the beginning of the semester is included on the final exam]

Mapping of Wiley CPA Exam Questions and Textbook Chapters and Modules

	Wiley CPA Review 11th ed. Modules/Specific Questions [See table below for 12th edition question numbers]
Louwers, et al. Textbook Chapters & Modules BELOW	Wiley 1 Professional Responsibilities	Wiley 2 Engagement Planning	Wiley 3 Internal Control	Wiley 4 Evidence Accumulation & Evaluation	Wiley 5 Reporting	Wiley 6 Accounting & Review Services	Wiley 7 Sampling	Wiley 8 Auditing w/ Technology
For Mid-Term #1
1, 2, B	All questions (not 1, 22-26)
3		All questions	Questions 152-160	2-31, 33-47, 132-145, 148-152
4	Overlaps w/ questions listed above from the first 4 modules
For Mid-Term #2
5			1-77, 137-151
H								All questions
6				48-60
7			78-93	61-74, 118-119
For Final Exam
8 + Appx. C			94-104, 113-123	75-85, 90-103, 120
9			105-112
11				121-131, 153-167
12					1-84, 100-154
E, F, G							1-58

Mapping between Wiley editions: 11th, 12th, 2015

	Wiley CPA Review 12th ed. Modules/Specific Questions
Louwers, et al. Textbook Chapters & Modules BELOW	Wiley 1 Professional Responsibilities	Wiley 2 Engagement Planning	Wiley 3 Internal Control	Wiley 4 Evidence Accumulation & Evaluation	Wiley 5 Reporting	Wiley 6 Accounting & Review Services	Wiley 7 Sampling	Wiley 8 Auditing w/ Technology
For Mid-Term #1
1, 2, B	2-55
3		1-77, 79-102, 104-109	111-119	1-45, 130-137, 140-144
4	Overlaps w/ questions listed above from the first 4 modules
For Mid-Term #2
5		110-115	1-42, 102-110		151-185
H								All questions
6				46-58
7			43-58	59-72, 112-113
For Final Exam
8 + Appx. C			59-69, 78-88	73-83, 88-101, 118
9			70-77
11				119-129, 145-160 (not 156)
12					1-84, 100-142, 148-150, 186-194
E, F, G							1-58

The final course grade will be based on the following weights:
 

	ACL Projects	12.5%
	Flowchart Project	22.5%
	2 Mid-Term Exams	35.0%
	FINAL EXAM	25.0%
	Class Participation	5.0%
	Total	100.0%

The final course letter grade is assigned competitively (on a curve). Individual exams and projects are not curved. + and - grading will be used. The following chart provides guidance on how letter grades are assigned, however, the course grades are actually assigned based on z-scores calculated from the the course means and standard deviations to create a "normal" distribution, which is usually more "liberal" than the following chart. 

>92%	A
90 to 92%	A-
88 to 90%	B+
82 to 88%	B
80 to 82%	B-
78 to 80%	C+
70 to 78%	C
62 to 70%	D
60 to 62%	D-
<60%	F

EXAMS
 

The exams are closed book. The final exam will be semi-comprehensive. The exams will be CPA Exam multiple choice questions. Bring a Scantron form to the exams. No make-up mid-term exams will be given. If a mid-term is missed for an acceptable reason, then the weight for that mid-term will be added to the NEXT exam's weight. Failure to notify me with documented support for missing the mid-term will result in a zero on the mid-term.

My policy is to not write your notes for you, therefore, I will not respond to open-ended emails such as, "Please explain the qualified opinion to me." You have to send me your answer and ask me to comment on it. You can ask open-ended questions in class and in my office.

ACL is the most popular data analysis software used by external and internal auditors. It is used for analytical procedures, fraud detection, forensic analysis, etc. Employers will be impressed that you have some familiarity with ACL. The educational version of the software is included with the textbook. THE ACL PROJECT MUST INCLUDE COMPLETE SUPPORT MATERIALS.

You can do the ACL project by yourself or in a team of 2 or 3 (BUT NOT MORE 3).

>>>>Each team must turn in their own ACL output. Turning in another team’s ACL output is PLAGIARISM and the minimum penalty is an F IN THE CLASS<<<<<

Writing, presenting, and working with teams are critical success skills. In this class you are going to really exercise those skills. Team size is 5 students (depending on exact enrollment numbers). NO WHINING ABOUT TEAMMATES--at the end of each team project, each team member's relative contribution to the project will be evaluated by their teammates. A team member's grade for the projects could be adjusted downward if the teammates believe that the person did not do his/her fair share.

As teams are formed, email the list of team members to me. I MUST APPROVE THE FLOWCHART PROJECT SUBJECT MATTER. Email tentative flowchart project subject matter to me for approval.

DELIVERABLES: PAPER version of all documents in a folder + ELECTRONIC version of all documents. KEEP COPIES OF EVERYTHING YOU TURN IN.

The Teams

3:30 PM Class

7:00 PM Class

Friendly advice on term project:

• Pick your teammates carefully.
• Don't underestimate how long it takes to complete the project. Start early.
• Make frequent back up copies of your work.
• Consider this important point: the grade you get on your project is totally under your control. You do not have the time anxiety you have taking an exam. Your project grade reflects the priority you give them.

Critical Success Factors

• Before class: read the assigned chapter and take a shot at the assigned questions.
• During class: take good notes. If you're a bad note taker, use a tape recorder. Ask questions in class to clarify any points.
• After class: review your notes. If something is fuzzy, first review how the same topic is covered in the textbook. If it is still fuzzy, stop by and see me. Ask your classmates.
• Prior to exam: Re-read the chapters, review all your notes looking for missing information or fuzzy concepts, and do practice quizzes. A great memory aid is to rewrite your notes in a narrative format. Besides helping your memory, it will more clearly help you find holes in your notes. Like the legal and medical professions, the accounting profession has lots of terms that must be memorized.

2. Regarding team projects:

• Pick your teammates carefully.
• Don't underestimate how long it takes to complete a project. Start early so you can more accurately scope out the project.
• Start showing me your project early. Ask for comments and suggestions.
• Make frequent back up copies of computer files.
• Consider this important point: the grade you get on your projects is totally under your control. You do not have the time anxiety you have taking an exam. Your project grades reflect the priority you give them.

• Form a study group. Review quizzes and compare notes. As you go thought the notes, ask what question could the professor ask here? What did he dwell on in class? Where and what are the trade-offs?
• Make sure you are answering the question asked.
• Make sure you answer all parts of each question. (If a question says to describe something and compare it to alternatives, don't forget the describe part.)