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22730 Auditing and Assurance Services

Warning: The information on this page is indicative. The subject outline for a particular semester, location and mode of offering is the authoritative source of all information about the subject for that offering. Required texts, recommended texts and references in particular are likely to change. Students will be provided with a subject outline once they enrol in the subject.

UTS: Business: Accounting
Credit points: 6 cp
Result type: Grade and marks

Requisite(s): 22748 Financial Reporting and Analysis AND 22754 Corporate Accounting AND 22747 Accounting for Managerial Decisions
These requisites may not apply to students in certain courses.
There are course requisites for this subject. See access conditions.

Handbook description

This subject addresses the provision of auditing and 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. It also 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. discuss the role of auditors and auditing in providing financial statement audits on the quality of information firms' annual financial reports
  2. demonstrate 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. explain the professional legal and ethical requirements and responsibilities in completing and reporting on assurance and audit tasks
  4. work as a member of an assurance/audit team designing audit tasks and making judgments, and communicating assurance/auditing findings to appropriate users.

This subject also contributes specifically to the following Program Learning Objectives:

  • be able to access and critically analyse relevant information for business decisions (PLO 1.1)
  • apply technical skills necessary for professional practice (PLO 5.1)
  • apply technical skills necessary for professional practice in the financial services industry (PLO 5.2).

Contribution to course aims and graduate attributes

This subject addresses the provision of auditing and assurance services. It sets out the professional and legal expectations and responsibilities of financial statement audits and assurance services. The subject provides students with competencies in audit methodology of risk and control evaluation, evidence collection and evaluation in various accounting information systems environments. To conduct a thorough audit of any set of financial statements, students must understand the concepts of risk and control, and the relation between the two.

The subject also provides an understanding of relevant legislation and regulations, and professional and ethical requirements and responsibilities in completing and reporting on assurance tasks. Students who have successfully completed this subject have elementary practical experience at conducting parts of the audit process as well as a solid theoretical background. This knowledge is important to students interested in any aspects of business, organisations and society as a necessary skill and attribute for an adaptive and functioning manager. The subject is accredited by the accounting professional bodies.

Content

  1. Auditing, assurance and the public accounting profession
  2. Auditing basics
  3. Understanding the auditor’s environment
  4. Client evaluation and planning the audit
  5. Business and audit risk assessment
  6. Materiality and audit evidence
  7. Tests of controls
  8. Substantive audit testing

Assessment

Assessment Item 1: Weekly Presentations

Objective(s):

This addresses Subject Learning Objectives 1, 2, 3 and 4.
Weighting: 20

Assessment Item 2: Mid-Semester Exam (Individual)

Objective(s):

This addresses Subject Learning Objectives 2, 3 and 4.

This addresses Program Learning Objective/s: PLO 5.1, 5.2.
Weighting: 30

Assessment Item 3: Final Exam (Individual)

Objective(s):

This addresses Subject Learning Objectives 1 and 2.

This addresses Program Learning Objective: PLO 1.1.
Weighting: 50

Minimum requirements

Students must achieve at least 50% of the subject’s total marks.

Required texts

  • Leung, Coram, Cooper and Richardson (2011) Modern Audinting and Assurance Services, Wiley, 5th Edition
  • Campbell and White (2011) Cloud 9 Pty Ltd: An audit case study (revised), Wiley.
  • iStudy Guide for Auditing (electronic)
  • ICAA (2013) Auditing and Assurance Handbook 2013, Wiley.

Recommended texts


References

  • Committee of Sponsoring Organisations of the Treadway Commission (COSO) (1992) Internal Control Integrated Framework New York
  • Greenstein M and M Vasarhelyi (2002) Electronic Commerce: Security Risk Management and Control 2nd edition McGraw-Hill
  • Hall J A and T Singleton (2005) Information Technology Auditing and Assurance 2nd ed South Western
  • Kinney W R (2000) Information Quality Assurance and Internal Control for Management Decision Making McGraw-Hill
  • Watts R and Z Zimmerman (1986) Positive Accounting Theory Prentice Hall (Chapter 13)
  • Weber R (1998) Information Systems Control and Audit Prentice Hall Sydney
  • Wright M (1999) Auditing in an IT Systems Environment Audit Guide No 5 Australian Accounting Research Foundation Melbourne.
Articles

  • Fargher N L and A A Gramling (1996) A New Market for Attestation Services: The Performance Presentation Standards of the Association for Investment Management and Research Auditing: A Journal of Practice and Theory 15 Supplement
  • Greinke A and G Shailer (1997) Auditing the Auditors - The Esanda Case Australian Accountant (Now Australian CPA) 67 7 August pp 16 -18
  • Getting Technical Auditing Issues (1996) Auditing Investments under CHESS Charter pp 62 and 63
  • Morris R (1984) Corporate Disclosure in a Substantially Unregulated Environment Abacus 20 pp 52 - 86
  • Watts R and Z Zimmerman (1983) Agency Problems Auditing and the Theory of the Firm Journal of Law and Economics 26 (October 1983) pp 613-634

Other resources

Legislation

  • Corporations Act 2001
  • Competition and Consumer Act 2010 (replacing Trade Practises Act 1974)

Websites