ACCY 1321Dr. Corless

ACCY 1321Dr. Corless

Fall 2007 Dr. Corless

CALIFORNIASTATEUNIVERSITY, SACRAMENTO

College of Business Administration

ACCY 262 – Current Topics in Auditing

COURSE OUTLINE

CATALOG DESCRIPTION

ACCY 262. Current Topics in Auditing. Seminar in current issues facing the auditing profession. Topics may include role of auditing in society, professionalism and ethics, auditor judgment and decision making, auditing theory, computer auditing, statistical sampling, fraud auditing, internal and operational auditing, and auditing in a global economy. Prerequisite: ACCY 131 or instructor permission. 3 units.

FACULTY MEMBER:John C. Corless

OFFICE:TAH - 2080

OFFICE HOURS:MWF, 11:00 – 11:45 p.m., and By Appointment

OFFICE PHONE:278 -7124

E-MAIL ADDRESS:

Begin all messages with “ACCY 262 followed by your name” in thesubject line.

USPS ADDRESS:Professor Corless, CSUS, 6000 J Street, Sacramento, CA 95819-6088

REQUIRED TEXTS

1.Fraud Examination, 2nd Edition by Albrecht et al. (Thompson-Southwestern, 2006)

2.A good Auditing Text such as Principles of Auditing, by Whittington and Pany, 16th Edition (Irwin-McGraw-Hill, 2008).

2. A good Intermediate Accounting text

3. Current periodicals covering accounting topics such as Barons, Business Week, Forbes, Fortune, Journal of Accountancy, and Wall Street Journal.

USEFUL WEBSITES

http:///www.gao.gov/

http:///www.sec.gov/

http:///www.bsa.ca.gov/bsa/index.php

COURSE OBJECTIVES

1.Help students to prepare for professional examinations such as CPA, CIA (Certified Internal Auditor), CISA (Certified Information systems Auditor, CFE (Certified Fraud Examiner).

2.Help students understand the responsibility of auditors for fraud prevention, detection, and prosecution (this material is likely to be emphasized on professional examinations).

a.SAS 99 (The AICPA's latest auditing standard with respect to fraud)

b.SOX 404 and PCAOB #2 (Federal laws regarding internal control and reporting of fraud)

c.Utilization of sophisticated audit software such as Computer Assisted Audit Tools and Techniques (CAATTs) in preventing and detecting fraud

GRADING

Class Participation20%

Term Paper on Actual Fraud Experience20%

Written Solutions to Assigned Problems and Cases20%

Midterm Exam20%

Final Exam20%

NATURE OF COURSE

Auditing is a different kind of accounting class. It does NOT consist of crunching a bunch of numbers to get a "correct" answer. Rather, it makes use of professional judgment to decide how to approach different situations. The assigned problems for the most part are really miniature case situations that you must consider and evaluate; there is usually no "right" answer. For example, a problem may describe a minor misstatement in the financial records that is discovered in the course of an audit. You might be asked to decide whether this misstatement is serious and should be investigated further or whether the auditor should not waste any more time on it. For grading purposes, it does not matter whether you suggest investigating the misstatement further or not. What does matter is that you form an opinion and be able to explain how/why you reached that opinion. You should not be surprised to find that sometimes auditors have different opinions. As members of an audit team discuss their different opinions, they are often able to agree on a course of action to take. Hopefully we can do the same as we share our opinions with each other. Realize that if a member of an audit team cannot express an opinion, he/she is not making a contribution to the audit. So it is in our class, if you cannot express an opinion by the time indicated on the schedule, you will not get credit for doing the homework.

DO NOT SPEND HOURS TRYING TO GUESS WHAT THE "CORRECT" OPINION IS! Consider each case carefully and then express your opinion. Most of the time you should be able to express that opinion and how/why you reached it in a half to a full page.

COURSE GOALS

To supplement the objectives, the following goals are stated. (1) learn about GAAS—a very
large body of knowledge in this course, (2) develop your ability to apply GAAS and solve problems requiring the analysis of audit situations (if you cannot apply your knowledge then you
really don't understand the material), (3) develop your ability to critically evaluate the appropriateness of current GAAS (what is the purpose of these standards and do they meet their objectives—can you suggest improvements to these standards), (4) develop your verbal and written communication skills and an awareness of ethical issues in the financial reporting arena, (5) develop your ability to work with others, and (6) develop your ability to apply audit procedures.

TEAM WORK

For team assignments, you will be assigned to teams of up to 4 students to work the homework together, either by meeting or working via email or by phone. You should all do the homework and then decide the best answer. You need to be organized and get an early start to be successful on this. For group assignments, submit only one paper per group.

You should begin your assignment and chapter reading well before the date assigned because these assignments require a significant amount of time. You may find that you have questions about an assignment. If you wait until the due date to start the assignment, there is no time for me to respond to your questions. Don't repeat the question in your answer.

COURSE REQUIREMENTS

1. Be Prepared for and Participate in Class Discussions

a.The assigned material for each topic must be read thoroughly before the date on the schedule.

b.Taking brief notes for your reading assignment will help you to answer questions quickly, and it will provide you with a quick review for the exams.

2.Submit Assigned Problems on Time

a.Problems must be submitted by 3:00 p.m. on the dates indicated on the schedule. Problems will be graded for COMPLETENESS AND NEATNESS (NOT on whether or nota “right” answer is given). Use a wordprocessor or electronic spreadsheet to do

the problems. Quizzes and examinations will begraded for COMPLETENESS and

CORRECTNESS (points may be lost ifhandwriting isnot legible).

b.Partial credit will be given for homework up to one week late.

TENTATIVE SCHEDULE

EC stands for Extended Case from the Albrecht text.

P stands for Problem from the Whittington text.

Date

Topic(s)

Reading Assignment

Problems Submitted as Individuals

Problems Submitted as a Team

Paper on Actual Fraud

Oct. 30

Introduction; Audit Standards Regarding Fraud

Whittington, Ch. 2

PCAOB Standard #5, Paragraphs 14, 15

Nov. 1

The Nature of Fraud

Whittington, Ch. 5

Albrecht, Ch. 1

Case 9, EC2

Tentative Topic Selection

Nov. 6

Who Commits Fraud; Fighting Fraud

Albrecht, Ch. 2

Albrecht, Ch. 3

Whittington, Ch. 6

Case 13

EC2

Final Topic Selection

Nov. 8

Preventing Fraud; Symptoms of Fraud

Albrecht, Ch. 4

Albrecht, Ch. 5

Whittington, Ch. 7

EC3

EC5

First Outline

Nov. 13

Detecting Fraud; Audit Sampling

Albrecht, Ch. 6

Albrecht, Ch. 7

Whittington, Ch. 9

Case 8

P9-42

P9-46

Nov. 15

Investigating Concealment and Conversion

Albrecht, Ch. 8

Albrecht, Ch. 9

Whittington, Ch. 9, Appendix 9A

Cases 2, 6

Case 7

P9-49

P9A-11

Final Outline, Annotated Bibliography

Nov. 20

No Class

Nov. 22

Thanksgiving

Nov. 27

Whittington, Ch. 9

Midterm Exam

P9A-12

P9A-14

First Draft Paper

Nov. 29

Inquiry Methods and Financial Statement Fraud

Albrecht, Ch. 10

Albrecht, Ch. 11

Case 13

EC2

Dec. 4

More Financial Statement Fraud

Albrecht, Ch. 12

Albrecht, Ch. 13

Case 15

EC1

Final Paper

Dec. 6

Consumer Fraud, Fraud Against Organizations

Albrecht, Ch. 14

Albrecht, Ch. 15

EC1

Begin Reports

Dec. 11

Bankruptcy, Divorce, Tax and E-commerce Fraud

Albrecht, Ch. 16

Albrecht, Ch. 17

EC1

Case 3

Continue Reports

Dec. 13

Resolution of Fraud

Albrecht, Ch. 18

Final Exam

Case 6, EC1

Finish Reports

TERM PAPER

This paper will describe an actual fraud that took place; preferably it will be a fraud that was perpetrated on you, a close relative, or your employer. It should be about ten to twenty pages, double spaced. All sources should be appropriately cited. The paper should use good grammar and have no spelling errors. The paper should clearly describe the fraud and answer the following questions:

1.What type of Fraud was it?

2.How was it perpetrated?

3.Who committed it?

4.Who was/were the victim(s)?

5.How much money was taken?

6.How could it have been prevented?

7.What restitution was repaid?

8.How were the perpetrator(s) punished?

9.How has society changed because of it?

a.New Laws

b.New Accounting Standards

c.New Auditing Standards

d.New Business Practices

e.How have the victims changed?

f.How have the perpetrators changed?

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