Faculty of Business: Accounting
Credit points: 6 cp

Subject level: Undergraduate

Result Type: Grade and marks

Requisite(s): 22320 Accounting for Business Combinations AND 22420 Accounting Standards and Regulations
These requisites may not apply to students in certain courses.
There are also course requisites for this subject. See access conditions.

Handbook description

This subject addresses the provision of assurance services. It focuses mainly on the attest services offered by auditors to provide credibility of information in company and other organisation financial statements. It also considers the expansion of assurance services beyond the traditional financial statement audit into such areas as risk assessment, information system reliability, asset protection, detection and prevention of fraud and electronic commerce and deals with the methodology necessary to complete a financial statement audit or to provide other assurance services, and the criteria and professional standards used to measure information quality and integrity. The subject studies the audit process of understanding client's operations and risk, analytical review and the pivotal importance of evaluation of the quality of client internal control and evaluates internal control in a COSO framework. While internal control systems are evaluated assuming a business environment where information systems are an integral part of control systems and client operations, a variety of information technology environments (including the use of enterprise resource planning (ERP) systems such as SAP e-commerce applications) are introduced. The subject provides an understanding of professional, ethical and legal requirements and responsibilities in completing and reporting on assurance tasks. It is accredited by the accounting professional bodies.

Subject objectives/outcomes

On successful completion of this subject students should be able to:

1. Understand the role of auditors and auditing in providing financial statement audits on the quality of information in firms' annual financial reports
2. Demonstrate an understanding of the methodologies necessary to provide assurance and audit services in conjunction with the criteria used to measure information quality and authenticity, especially in the areas of risk assessment, audit planning, audit execution and the formulation of opinions
3. Understanding professional legal and ethical requirements and responsibilities in completing and reporting on assurance and audit tasks
4. Working as a member of an assurance/auditing team and in communicating assurance/auditing findings to appropriate users.

Contribution to graduate profile

This subject imparts the analytical and disciplinary skills necessary to provide assurance and auditing services. It gives students an understanding of the essential role that assurance services, such as auditing, play in business in achieving good corporate governance by ensuring the integrity of information and internal control systems.

Teaching and learning strategies

The concepts of assurance and auditing together with the methodology used by auditors in both IT and manual environments will be presented in the lecture. The tutorials will enable the further development of these concepts through questions, discussion and case studies. The workshops will enable students to discuss and debate issues that may arise in the audit simulation that is the basis of the audit team assignment. Students will be expected to present reviews of case studies and key points emerging from assigned hard copy and online readings for rigorous class discussion. Presenting of case studies will develop verbal communication skills. The homework requirements of students are described in more detail in Section 8: Weekly Study Programme.

Students should use the tutorial/workshop leader as an audit 'senior' or 'manager' to supervise and direct their work, when preparing the Audit Team Assignment, but not to providing a solution for the assignment. The structure of the subject conforms to UTS Flexible Learning Guidelines.

UTS Online is used in this subject for the dissemination of subject materials such as lecture notes and general information. The Discussion Board is unmoderated, i.e. teaching staff will not be responding to questions on UTS Online. The Discussion Board exists purely for discussion amongst students enrolled in the subject. If you have any questions for the teaching staff, please raise them in your tutorial.

Content

• Purpose of assurance services
• The framework for conducting assurance services
• The criteria to determine the quality and reliability of financial statement information
• Practical auditing experience
• Formulation of audit opinion on the level of truth and fairness in financial statements
• Legal and ethical responsibilities of auditors to their clients, the general public, and stakeholders of the firm.

Assessment

Midsemester Exam (Individual)	15%
This addresses objectives 1, 2 and 3.
Audit Team Assignment (Group of 4 students)	25%
This addresses objectives 2 and 4.
Final Exam (Individual)	60%
This addresses objectives 1-4.

To pass this subject not only must a total assessment mark of 50/100 or greater be achieved, it is also necessary to gain a mark of 40% (24/60) or greater in the final exam component of the assessment.

To gain a pass in a supplementary examination or other assessment tasks, a student must achieve at least 50% in that supplementary exam or assessment task.

The mid-semester exam will be conducted under strict class supervision with a number of rotating exam papers used. The Audit Team Assignment will be secured through a rotation of various audit practice cases across semesters. The Final Exam will be conducted under University examination conditions, and hence thoroughly address concerns regarding secure assessment.

Recommended text(s)

Schelluch P S Topple C Jubb L E Rittenberg and B J Schwieger [2004] Assurance and Auditing: Concepts for a Changing Environment, Thomson.

Auditing Handbook 2004 [2004] Prentice Hall Sydney (This is volume 2 of The Accounting and Auditing Handbook 2004).

Indicative references

Bell T F Marrs I Solomon H Thomas [1997] Auditing Organisations Through a Strategic-Systems Lens KPMG Peat Marwick LLP.

Hall J A and T Singleton [2005] Information Technology Auditing and Assurance Thomson 2nd Edition.

Kinney W R [2000] Information Quality Assurance and Internal Control for Management Decision Making McGraw-Hill.

The Accounting and Auditing Handbook 2004 [2004] Volume 1 Prentice Hall Sydney.

Wright M [1999] Auditing in an IT Systems Environment Audit Guide No 5 Australian Accounting Research Foundation Melbourne.