SUNWAY UNIVERSITY BUSINESS SCHOOL

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SUBJECT OVERVIEW

ACC3044 - ADVANCED AUDIT & ASSURANCE/ BAB3202 – AUDIT AND ASSURANCE

Course : Bachelor of Science (Hons) in Accounting and Finance

Subject Code / Title : ACC3044 - Advanced Audit and Assurance/ BAB3202 - Audit and Assurance Semester : March – July 2014 Weekly Contact Hours : 2-hrs lecture, 1-hr workshop, 1-hr tutorial Lecturer : Tan Seng Lee (sengleet@sunway.edu.my) Room : Room 248, 2nd Floor, North Building Telephone No. : 603-7491-8622 Ext 3698 Consultation Hours : Monday and Tuesday (10.30am to 12.30pm) Tutor : Wong Wing Tien (wingtienw@sunway.edu.my) ___________________________________________________________________ Subject Description The subject is an extension of “ACC2034 Principles of Auditing”. It is designed to progressively broaden and deepen the knowledge, skills and professional values demonstrated by students in the area of audit and assurance. The subject examines the critical aspects of managing audit and assurance engagements as well as the statutory, regulatory, ethical and current issues. Subject Objectives The objectives of this subject are to:

Enhance students’ knowledge and understanding of audit and assurance, and its strategic role in business;

Enable students to apply their technical knowledge in the conduct of audit and assurance engagements; and

Develop students’ ability to discuss current issues and developments affecting audit and assurance

Subject Learning Outcomes

Upon completion of the course, students will be able to:

SLO 1 Identify and discuss the tools, theories and principles of auditing and assurance in business.

SLO 2 Assess, plan, conduct, conclude and report on audit and assurance engagements in accordance with regulatory and auditing standards.

SLO 3 Discuss and express opinions supported by reasoned arguments on current issues and developments relating to audit and assurance engagements

Sunway University Business School ACC3044/BAB3202 Subject Overview

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Programme Learning Outcomes

Upon completion of this programme, students will be able to:

PLO 1 Apply fundamental business knowledge with a focus on accounting and finance.

PLO 2 Apply relevant tools and techniques used by industry to interpret data and undertake business analysis.

PLO 3 Take into consideration social, cultural and environmental factors in making business decisions.

PLO 4 Embed empathy, responsibility, integrity and professionalism in making business decisions.

PLO 5 Function effectively as an individual and within a group as well as demonstrate the responsibility and qualities of an effective leader.

PLO 6 Communicate and interact effectively with all levels of an organisation and the wider community.

PLO 7 Systematically identify problems and provide efficient and effective solutions.

PLO 8 Manage information and engage in life-long learning.

PLO 9 Apply managerial and entrepreneurial skills.

Mapping of Subject Learning Outcomes to Programme Learning Outcomes

Subject

Learning

Outcomes

Programme Learning Outcomes

PLO1 PLO2 PLO3 PLO4 PLO5 PLO6 PLO7 PLO8 PLO9

SLO 1

SLO 2

SLO 3

Programme Objectives

This programme aims to:

PO1 produce employable business graduates or professionals with a sound

knowledge and understanding of accounting and finance;

PO2 produce business graduates who are ethical and responsible leaders or

managers;

PO3 produce business graduates with the skills and competencies in critical

thinking and problem solving;

PO4 produce business graduates with managerial and entrepreneurial skills;

and

PO5 produce graduates who recognise the need to engage in life-long learning

for personal and professional growth and development.

Sunway University Business School ACC3044/BAB3202 Subject Overview

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Mapping of Subject Learning Outcomes to Programme Objectives

Subject Learning Outcomes

Programme Objectives

PO1 PO2 PO3 PO4 PO5

SLO1

SLO2

SLO3

Delivery Methods

Topics will be introduced by way of lectures and developed through tutorials and workshops. Salient concepts learnt in the topics will be applied in the coursework. Lectures are delivered with MS Powerpoint as a visual aid. Each lecture covers a major topic. Students should note that while a lecture is self-contained in terms of presentation, topics are closely interrelated and this interconnectedness is essential to their understanding of the contents of this subject. Tutorials and Workshops are designed to supplement lectures and to enhance students’ understanding of topics. Students are encouraged to participate actively in discussing significant issues or problems on pre-assigned topics. Assessment

Students are assessed by way of a Coursework and a Final Examination. The allocation of marks for each assessment mode is as tabulated below:

No. Method of Assessment Marks

1. Coursework 30%

2. Final Examination: 70%

Total 100%

Coursework (30%): The Coursework requires students (in groups of up to 4) to conduct literature research and apply relevant concepts and tools to develop an Audit Plan for a selected public Company listed on the Bursa Malaysia. Students will be evaluated based on their ability to articulate arguments in support of their opinions, findings and recommendations in a Written Group Report and a brief Individual Presentation. The breakdown of Coursework marks is as follows:

Areas of Assessment: Marks

a) Overall qualitative and quantitative effort in the written group report. 20%

b) Overall quality and effectiveness of the individual presentation. 10%

Total : 30%

Sunway University Business School ACC3044/BAB3202 Subject Overview

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Final Examination (70%): The final examination of three hours in duration will comprise two questions in Section A and three questions in Section B. Students are required to answer all questions in Section A and any two questions in Section B. The final examination will cover topics that are taught throughout the whole of the semester. The examination is ‘closed-book’ where no unauthorised materials are allowed in the examination venue - including notes, textbooks, programmable calculators, and dictionaries. NOTE: Marks awarded are provisional and subject to change, and are only deemed

final once approved by the Board of Examiners. Late Submission Penalty Clause The deadline for submission of the Coursework is to be strictly adhered to. No extension of time will be allowed except in extenuating circumstances, e.g. medical or compassionate reasons. Students who wish to apply for an extension of time shall put in writing as soon as possible the request, together with validated documentary evidence to support the application. If the Coursework is submitted after its due date (and without approval for extension), the following penalty will be imposed:

Coursework submitted after the deadline but within one week will be accepted for a maximum mark of 40% of the original marks allocated;

Coursework submitted more than one week after the deadline will be regarded as a non-submission and shall be marked at zero (ie. all marks allocated for the Coursework shall be lost).

Academic Malpractice

Plagiarism, whether inadvertent or deliberate, shall include the following:

Word-for-word copying of sentences or whole paragraphs from one or more sources, or presenting substantial extracts from books, articles, theses, other unpublished works such as working papers, seminar and conference papers, internal reports, computer software, lecture notes or tapes, without clearly indicating their origin;

Using very close paraphrasing of sentences or whole paragraphs without due acknowledgement in the form of reference to the original;

Submitting another student’s work in whole or in part; or

Use of other person’s ideas, work or research data without acknowledgement.

Collusion, whether inadvertent or deliberate, shall include the following:

Submitting an ‘individual assignment’ that was jointly prepared by the candidate and any other third party, e.g. other students, family members, professionals, or other tutors/lecturers;

Submitting a ‘group assignment’ that was jointly prepared by the group and other third party, e.g. other students, family members, professionals, or other tutors/lecturers; or

Copying each other’s work and passing it off as an individual effort.

Please refer to the Student Handbook for Diploma and Undergraduate Programmes or Blackboard for details about academic malpractice penalties.

Sunway University Business School ACC3044/BAB3202 Subject Overview

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Subject Outline The following is the subject outline by topics with recommended readings indicated against each of them. Readings may be added during the course as and when appropriate.

Week Topics Readings

1

Current issues in Audit & Assurance Auditors’ independence revisited, challenges to quality control and review, the Malaysian regulatory framework, Audit oversight and auditing standards,

ISA 200 & 700 Arens

Ch 1,2 & 6

2

Key considerations in developing the Audit Plan Preliminary Engagement Activities, Assessing client business risks, Developing the Audit Strategy, Analytical procedures. The lessons from Enron.

ISA 210, 300 Arens Ch 8 &

13

3

Audit Evidence, Materiality and Audit Risk Nature and types of Audit Evidence, Audit Documentation, Materiality for financial statements, Audit Risk Model, Role of Internal Audit in WorldCom

ISA 230, 320, 500

Arens Ch 7 & 9,

4

Internal Control and the impact of Information Technology Assessing control risks, Internal control and audit strategy, Impact of Information Technology on the Audit Process. Case of Satyam’s internal control.

ISA 315, 330, 610

Arens Ch 10,12

5

Audit of the Sales and Collection Cycle Business functions of the cycle, Designing tests of control and substantive tests of transactions, Application of Audit Sampling, Key audit issues

Arens Ch 14,15,16 & 17

6

Audit of the Acquisition and Payment cycle Business functions of the cycle, Designing tests of controls and substantive tests of transactions, Designing tests of details of balances, key audit issues

Arens Ch 18 & 19

7

Audit of the payroll and personnel cycle Business functions of the cycle, Designing tests of controls and substantive tests of transactions, Designing tests of details of balances, key audit issues

Arens Ch 20

8

Audit of the Inventory and warehousing cycle Business functions of the cycle, Designing tests of controls and substantive tests of transactions, Designing tests of details of balances, key audit issues

Arens Ch 21

,

9

Audit of the Capital acquisition and repayment cycle Business functions of the cycle, Designing tests of controls and substantive tests of transactions, Designing tests of details of balances, key audit issues

Arens Ch 22

Sunway University Business School ACC3044/BAB3202 Subject Overview

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Week Topics Readings

10

Audit of cash and financial instruments Types of cash and financial instruments, Cash in the bank and transaction cycles, Designing tests of details of balances, key audit issues

Arens Ch 23

11

Considering the risk of fraud An overview of Fraud and the Auditor’s Fraud Related Responsibilities, Auditing Standards that Reflect a Responsibility to Detect Fraud, Specific fraud risk areas

ISA 240 Arens Ch 11

12

Completing the Audit Performing Additional Tests, Review for Contingent Liabilities and Commitments, Review for Subsequent Events, Subsequent Discovery of Facts

ISA 560,570 Arens Ch 24

13

Audit Reports Unqualified audit reports, Departures from unqualified audit reports, Discussion of conditions requiring a departure

ISA 700, 705,706

Arens Ch 3

14

Professional Conduct and Ethics The IFAC Code of Ethics, MIA By-Laws on Professional Ethics, Conduct and Ethics, Duties to Report Breaches of Laws, Statutory and Criminal Liability,

Arens Ch 4 & 5

Reading List Arens, et al (2013), Auditing and Assurance Services in Malaysia - An Integrated Approach, 3rd ed., Pearson: Malaysia (‘Arens’)

Arens, et al (2014), Auditing and Assurance Services - An Integrated Approach, 15th ed., Global edition, Pearson: England

Beasley et al (2012), Auditing Cases - an interactive learning approach, 5th ed., International edition, Pearson: New Jersey

References Gramling, Rittenberg and Johnstone (2012), Auditing – International Edition, 8th ed., South-Western, Cengage Learning

Gul, F.A. and Nurmazilah, M. (2013), Auditing in Malaysia – Theory and Practice, CCH

Whittington and Pany (2014), Principles of Auditing and Other Assurance Services, 19th ed., McGraw-Hill Irwin International Edition

Messier, Glover, Prawitt and Margaret Boh (2007), Auditing and Assurance Services in Malaysia, 3rd ed., McGraw Hill

Bursa Malaysia, Guidance on Internal Controls for Directors of Public-Listed Companies

The Companies Act 1965

The Malaysian Institute of Accountants, International Standards on Auditing

Securities Commission of Malaysia, Malaysian Code on Corporate Governance (revised 2007)