University of Manitoba Department of Accounting and Finance I. H. Asper School of Business Winter 2010

ACC 4010 AUDITING

A02 Tues & Thurs 5:30 p.m. – 6:45 p.m. Instructor: Carmelle Barnabe Office: 674 Drake Centre Office Hours: By appointment only Telephone: 770-9651 E-mail: barnabe2@cc.umanitoba.ca

COURSE OBJECTIVES: The objectives of the course are to allow the students to:

• Acquire knowledge of the changing professional and legal environment of auditing in Canada; • Identify ethical issues facing professional accountants and to develop judgment in determining

an appropriate response; • Acquire an understanding of basic features of accounting systems and objectives of the related

internal control structure; and • Develop an understanding of auditing concepts and illustrate their application in obtaining and

evaluating audit evidence. The course provides a carefully balanced presentation of auditing theory and practice. The course emphasizes the philosophy and the environment of the auditing profession, with special attention paid to the nature of auditing, auditing standards, professional conduct, legal liability, audit evidence, audit planning, consideration of internal control, audit sampling, audit working papers, and general records. The course also deals with obtaining evidence about various financial statement accounts, selection of appropriate auditing procedures and the auditors reporting responsibilities. The course will also review changes to the audit environment, specifically with respect to the new Canadian Auditing Standards (CAS) which come into effect December 14, 2010 and the addition of Canadian Standards on Quality Control (CSQC – 1) which is effective as of December 15, 2009. ASSIGNED MATERIALS: Smieliauskas & Bewley, Auditing: An International Approach, Fifth Canadian Edition, McGraw-Hill Ryerson ISBN 0-07-096829-2 All handouts, including course notes CICA Handbook (Faculty Lab electronic library series)

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MARK ALLOCATIONS:

Midterm Examination Tentatively March 2, 5:30 pm – 7:30 pm* 40% Covers chapters 1, 2, 3, 6, 7, 8, 9, 10,

16 (626-635) ( Lectures 1 – 13) Class Participation 10% Final Examination TBA 50% The final is a comprehensive exam. 100%

*Please notify the instructor of any legitimate conflicts with the midterm exam time by January 14, 2010. GRADING: Any request for remarking the midterm examination must be made by end of class on MARCH 16, 2010. A completed Midterm Examination Appeal Form (available on the course Angel site) must be attached to the midterm examination in order for it to be remarked. There will be NO EXCEPTIONS to this date unless otherwise stated.

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PRELIMINARY TIMETABLE: Lecture TOPIC CHAPTER HANDBOOK SUGGESTED

PROBLEMS

Lecture 1, 2 & 3 (Jan 7, 12, 14)

Introduction to Auditing, Professional Practice, & Canadian Auditing Standards

1, 2 CAS 200, 300, 315, 700, 705, 706 & CSQC - 1

Ch 1 (EP1, EP3, EP6, EP7) Ch 2 (EP1, EP2, EP6, EP11)

Lecture 4 & 5 (Jan 19, 21)

Audit Reports 3, 16 (626-635)

CAS 560, 705, 706 CICA 5000, 8100, 9200

Ch 3 (EP4, EP6, EP8, EP18, EP21)

Lecture 6 & 7 (Jan 26, 28)

Audit Planning & Audit Procedures

6, 8 CAS 210, 230, 240,300, 315, 320, 450, 500,520,530, 710

Ch 6 (EP1, EP3, DC1, DC5) Ch 8 (EP4, EP8)

Lecture 8 & 9 (Feb 2, 4)

Internal Control Evaluation

9 CAS 200,240,260, 265, 315, 330

Ch 9 (EP2, EP3, EP6, EP7)

Lecture 10 & 11 (Feb 9, 11)

IT & Internal Control Evaluation (Ctd)

7 CAS 500 Ch 7 (EP2, DC1, DC6)

Lecture 12 & 13 (Feb 23, 25)

Audit Sampling 10 CAS 500, 530 Ch 10 (EP1, EP2, DC3)

Midterm Exam March 2, 2009 5:30 pm – 7:30 pm Lecture 14 & 15 (Mar 4, 9)

Professional Ethics 4 CAS 260

Ch 4 (EP1, EP2, EP4, EP5, EP6, DC7, DC12)

Lecture 16 & 17 (Mar 11, 16)

Fraud Awareness 17 CAS 240, 250, 260

Lecture 18 (Mar 18)

Tentative: Guest Lecturer Jeff Gilbert, CA, MPAcc, DIFA

Lecture 19 (Mar 23)

Revenue and Purchasing Cycles

11, 12 CAS 505 Ch 11 (EP2, EP5, DC2, DC6) Ch 12 (EP2, EP6)

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Lecture 20 & 21 (Mar 25 & 30)

Production, Payroll, Investment, Financial Reporting Cycles

13, 14 Ch 13 (EP2, EP4, EP8) Ch 14 (EP5, EP6, EP8)

Lecture 22 (Apr 1)

Completing the Audit

15 CAS 220, 312, 550, 560, 580

Ch 15 (EP1, EP3, EP4, EP7)

Lecture 23 (Apr 6)

Legal Liability 5 Ch 5 (EP2, EP5, EP7, EP15)

Lecture 24 (Apr 8)

Wrap – Up / Catch – Up / Discussion of Final Exam

*There may be one additional guest lecturer during the term. Details to follow.

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PARTICIPATION: Participation is based on the quality and quantity of your contributions to class discussions, preparation for class, and completion of various activities that will be assigned throughout the term. Participation marks will also be awarded to students who provide supplemental material. videos or newspaper articles that are relevant to the auditing profession and the course. Class attendance alone does NOT contribute to your participation grade. Students who regularly miss classes jeopardize their participation grade as they will not be able to participate in class discussions or complete the in-class activities. In addition, students who exhibit behaviors that detract from the quality of the class (e.g., regularly arriving late or leaving early, talking to classmates during class, answering cell phones, obviously reading material unrelated to the class, surfing the internet on their laptop) may have points deducted from their participation marks otherwise earned. Students are expected to behave in a courteous and professional manner in all dealings with both their fellow students and the professor both in and outside of class. If students do not behave in a professional or courteous manner, they will significantly jeopardize participation marks. Regularly missing class to attend sporting, social, networking, or work events are not considered permissible reasons to miss class and participation marks will be deducted accordingly. Class attendance is mandatory when Guest Lecturers are present. Attendance and participation on guest lecturer days will be weighted accordingly as part of your final participation mark. NAME CARDS: In order to allow me to recognize your participation, you must place a name card in front of you during class. Students without a name card run the risk of not receiving the participation marks they deserve. READINGS: Readings are to be completed before discussion of topics in class. It is preferable to start with readings from the text, since topics are presented here at a basic introductory level. Reading of handbook sections or articles should follow. Handbook sections are more technical in nature and often refer to related auditing topics that may be covered at a later point in the course. Rereading of handbook sections after lectures can further enhance your understanding. END OF CHAPTER QUESTIONS: This course outline includes a list of suggested chapter questions to be done at the end of each chapter. These questions are designed to allow students to review lecture material and to practice applying knowledge of each subject area. Students may benefit from working on questions with a study partner or in a small group. This will help ensure completeness of your individual responses. Questions will not be handed in for grading. Solutions will be made available to students for all questions. It is each student's responsibility to check their own responses against solutions in detail and to identify areas where improvement is necessary. Any persistent difficulties should be discussed with the instructor.

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ANGEL:

Follow the instructions below to log on Angel:

1. On the University of Manitoba homepage (http://umanitoba.ca/) click on “current students”. 2. On the “current students” page, click on “Angel Learning & WebCT” link. 3. Log into Angel using your UMnetID (formerly called your ccu account). You must have

previously claimed your UMnetID in order to log into Angel. If you have not done so, claim your UMnetID account by clicking on the “claimid website” link.

4. If you are having problems logging into Angel, visit the Accounts Office in 010 Dafoe Tunnel, contact the support desk by phone at (204) 474-8600, or email support@cc.umanitoba.ca.

5. Once logged into Angel, click on the ACC 4010 link. EXAMINATIONS: Examinations will test students’ understanding of the concepts covered in lectures, readings and assigned homework. Students will also be tested on their ability to apply these concepts to new situations. Typical examinations may include numeric questions, long-answer theory questions and multiple-choice questions (which may be numeric or theoretical in nature). Students may not have in their possession at the time of writing any examination in this course: textbooks, dictionaries, translators, cell phones, PDA’s, additional notes, formula sheets, or other extraneous material (e.g. scrap paper) designed to supplement their own knowledge of course material. Each student will be allowed to bring calculators (without text storage capability), pens and pencils. Pencil cases, back packs, purses and bags are not permitted in the examination room. Students who miss the midterm examination for legitimate reasons (medical, compassionate, academic conflict or university sports team travel) can apply to have the midterm examination marks added to the final examination. Conflicts with employers do not qualify as legitimate reasons to miss examinations. In all cases of absence on the midterm examination date, the instructor must be advised within 5 working days of the examination date and receive suitable documentation. Late submission of supporting documentation will result in a score of zero for the midterm examination. Attached to this course outline is a copy of the Faculty of Management Medical Absenteeism Form, which must be signed and submitted to support absences due to illness. Students who miss the final examination must apply to the Undergraduate Program Office in their faculty for possible deferred examination privileges.

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THE CICA HANDBOOK ON THE UNIVERSITY OF MANITOBA LIBRARIES WEBSITE: The CICA Handbook and the relevant Canadian Auditing Standards are available in electronic format on the University of Manitoba Libraries website. To access the Handbook:

1. From the University of Manitoba homepage (umanitoba.ca), click on THE UNIVERSITY and then LIBRARIES.

2. Click on E-LIBRARY. 3. On the Research Databases line, click on by name. 4. On the Databases A – Z page, scroll down to, and click on, CICA Standards & Guidance

Collection. 5. On the Knotia.ca page, click on CICA Standards & Guidance Collection. 6. The most efficient way to access a particular section in the Handbook is to enter the section

number in the “Fetch” box on the right-hand side of the screen and click on Go. The Handbook is accessible on campus or from off-campus with an internet connection. If you are planning to use an off-campus connection, it will be worthwhile to read about “Remote Access via Proxy System,” available on the Libraries’ SERVICES & POLICIES page on the Libraries’ website. The CICA Handbook subscription is provided by the Institute of Chartered Accountants of Manitoba. GROUP PROJECTS AND GROUP WORK: Many courses in the I.H. Asper School of Business require group projects. Students should be aware that group projects are subject to the same rules regarding academic dishonesty. Because of the unique nature of group projects, all group members should exercise special care to insure that the group project does not violate the policy on Academic Integrity. Should a violation occur, group members are jointly accountable unless the violation can be attributed to a specific individual(s). Some courses, while not requiring group projects, encourage students to work together in groups (or at least do not prohibit it) before submitting individual assignments. Students are encouraged to discuss this issue as it relates to academic integrity with their instructor to avoid violating this policy. In the I.H. Asper School of Business all suspected cases of academic dishonesty are passed to the Dean's office in order to ensure consistency of treatment.

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ACADEMIC INTEGRITY: It is critical to the reputation of the I.H. Asper School of Business and of our degrees that everyone associated with our faculty behaves with the highest academic integrity. As the faculty that helps create business and government leaders, we have a special obligation to ensure that our ethical standards are beyond reproach. Any dishonesty in our academic transactions violates this trust. The University of Manitoba General Calendar addresses the issue of academic dishonesty under the heading "Plagiarism and Cheating". Specifically, acts of academic dishonesty include, but are not limited to:

• duplicating a table, graph or diagram, in whole or in part, without referencing the source • paraphrasing the conceptual framework, research design, interpretation, or any other ideas of

another person, whether written or verbal (e.g., personal communications, ideas from a verbal presentation) without referencing the source

• copying the answers of another student in any test, examination, or take-home assignment

• providing answers to another student in any test, examination, or take-home assignment

• taking any unauthorized materials into an examination or term test (crib notes)

• impersonating another student or allowing another person to impersonate oneself for the

purpose of submitting academic work or writing any test or examination

• stealing or mutilating library materials

• accessing tests prior to the time and date of the sitting

• changing name or answer(s) on a test after that test has been graded and returned

• submitting the same paper or portions thereof for more than one assignment, without discussions with the instructors involved.

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UNIVERSITY OF MANITOBA Faculty of Management

Medical Absenteeism Form

Student Identification: (please print clearly) ______________________________ ___________________ ___________ _______________________________ Last Name First Name Middle Initial U of M Student Identification Number I hereby authorize ________________________________ to verify with the attending physician or his/her (Name of Instructor/Administrator) staff or colleagues that the contents of this form are true. ________________________________________ _______________________________________ Student’s Signature Date

To be completed by the attending physician: (after the above section is completed)

________________________________________ ______________________________ ________________ Physician’s Last Name (please print clearly) Physician’s First Name Middle Initial ___________________________________________ ________________________________ __________________ Street Address City, Province Postal Code ___________________________________________ _________________________________ Telephone Number Fax Number To the attention of the physician: Your evaluation of the student’s condition is being used for the purpose of determining whether or not the student has a valid reason to miss an important exam or assignment. Your professional evaluation is necessary to ensure that only valid cases are excused. I certify that the nature of the student’s condition is severe enough to prevent the student from taking an exam or completing an assignment. If requested, my associates or I will verify for the above-named instructor/administrator that this information is accurate. The student’s condition will likely span the following dates: ____________________________ (indicate start date) until ____________________________ (indicate end date) ___________________________________ _________________________________ Physician’s Signature Date

Notes to physician: • Please make a note in the student/patient’s file indicating that the student has given the above-named instructor/administrator

permission to verify with you, your staff, or your colleagues, that the information contained on this form is correct. Thank you for your professional evaluation of this student’s condition.

• PLEASE ATTACH THIS FORM TO YOUR REGULAR OFFICE STATIONERY THAT INDICATES THE STUDENT VISITED YOUR OFFICE.

Note to student: • The use of this form is at the option of the student. However, in order to obtain an excused absence for an

assignment or exam, the student must obtain a doctor’s certification that the student’s condition is severe enough to prevent the student from taking the exam or completing the assignment.

• It is NOT SUFFICIENT to provide a note that only indicates the student visited the doctor’s office.