STUDENT LEARNING OBJECTIVES



STUDENT LEARNING OBJECTIVES

After each chapter, the student should be able to:

Chapter 1 - The Auditing Profession

1. discuss auditing engagements in general and identify the significant elements of the audit function

2. explain the importance of auditing to society and distinguish between accounting and auditing

3. distinguish between the types of auditors and the types of audits

4. discuss the capabilities necessary for the practice of public accounting

5. restate the 10 Generally Accepted Auditing Standards in your own words

Chapter 3 - Professional Ethics

1. summarize the key characteristics of professions and relate each to the CPA profession

2. describe several philosophical methods for ethical decision making

3. discuss what is meant by "virtue ethics" and relate to the practice of public accountancy

4. describe the elements of the AICPA's Code of Professional Conduct

5. compare and contrast independence in fact and independence in appearance

6. discuss important elements of the Rules of Ethical Conduct including independence and confidentiality

Chapter 4 - Legal Liability

1. distinguish between common law and statutory law as a basis for auditor's liability

2. explain the evolution of three approaches to auditor's common law liability to clients and third parties using precedent cases as examples

3. relate important cases such as Fund of Funds v Arthur Andersen, Escott v Barchris, U.S. v Simon, and 1136 Tenants to both professional standards and ethics

4. discuss the concept of "deep pockets" and characteristics of the work of auditing which may increase auditor liability

Chapter 5 - Audit Responsibilities and Objectives

1. summarize the auditor's responsibility for fraud and illegal acts under SAS 82

2. explain what is meant by financial statement cycles and how cycles are used to segment the audit

3. list and describe the 5 financial statement assertions

4. give examples of the relationship between management assertions and transaction-related and balance sheet-related objectives

5. provide an overview of the audit process in four phases

Chapter 6 - Audit Evidence

1. explain what is meant by "persuasiveness" and "sufficiency" of audit evidence and discuss factors which influence each

2. list and discuss the types of audit evidence and relate each to reliability (competence)

3. discuss analytical procedures including what they are, when they are used, and their competence

Chapter 7 - Audit Planning and Documentation

1. list and discuss the steps the auditor would follow in planning the audit

2. describe the purpose and content of audit work papers

3. explain indexing and tick marks as related to audit work papers

Chapter 8 - Materiality and Risk

1. define materiality

2. explain how the auditor uses materiality in the planning and execution of an audit

3. discuss the concept of audit risk and develop and explain the audit risk model

4. explain the components of audit risk and illustrate how they interact

5. explain how the auditor uses materiality and audit risk to make decisions about evidence

Chapter 9 - Internal Control and Control Risk Assessment

1. explain what "internal control" is and list several objectives that a client might have for an internal control system. Describe several important limitations of internal controls

2. describe the components of internal control and give examples of each

3. explain what is meant by "segregation of duties" and provide examples of those duties which are most important to segregate

4. be able to flowchart or describe sequentially the steps that the auditor will follow to determine the degree of control risk

6. describe the audit evidence commonly gathered by the auditor to obtain an understanding of internal controls

Chapter 10 - Overall Audit Plan and Audit Program

1. compare the five types of audit tests that an auditor can use. Distinguish between tests of control and substantive tests. Relate them to the audit risk model

2. describe the relationship between audit tests and evidence and explain what is meant by "evidence mix"

3. explain how an auditor will develop an audit program

Chapter 11 - Sales and Collection Cycle

1. describe the normal functions involved in the processing of credit sales and list at least two internal controls which might be present for each

2. describe the normal functions involved in the processing of cash receipts and list at least two internal controls which might be present for each

Chapter 12 - Audit Sampling for Tests of Control

1. explain what is meant by sampling

2. distinguish between statistical and non-statistical sampling

3. describe the use of non-statistical sampling to estimate an occurrence rate

4. describe the risks associated with attribute sampling

5. describe the steps in an attribute sampling plan and use attribute sampling to test internal controls

Chapter 13 - Accounts Receivable

1. write an audit program to test the detail of balances for accounts receivable

2. distinguish between "positive" and "negative" confirma- tions and explain the conditions which favor each

3. discuss "control" as it relates to confirmations

Chapter 15 - Auditing Complex EDP Systems

1. list several differences between manual and EDP systems

2. distinguish between general controls and applications controls and give several examples of each

3. discuss the terms "auditing around the computer" and "auditing through the computer". Give examples of methods to test controls auditing through the computer

4. describe what is meant by "generalized audit software"

Chapter 17 - Audit of Acquisition and Payment Cycle

1. list the functions in the purchases and cash disburse-ments cycle and list internal controls for each

2. relate transaction-related audit objectives to key controls, tests of control and substantive tests of transactions for acquisitions and cash disbursements

3. describe the audit procedures for the audit of a/p

Chapter 19 - Audit of the Inventory and Warehousing Cycle

1. write an audit program for inventories

2. explain how the use of a perpetual inventory system may affect evidence gathered in the audit of inventories

3. write an audit program for the observation of inventory

4. describe the use of experts in the audit of inventories

Chapter 21 - Audit of Cash Balances

1. write an audit program for cash accounts

2. give examples of how control risk affects the level of work performed on a bank reconciliation

3. describe "lapping" and "kiting and explain audit procedures which could be used to detect them

4. explain the functioning of "imprest" cash accounts

Chapter 22 - Completing the Audit

1. describe the auditor's responsibilities regarding LCA, including examples of audit steps performed

2. Define "subsequent events." Give examples of each type

3. describe several steps that the auditor performs to complete the audit process and form an audit opinion

Chapter 2 - Audit Reports

1. Relate the four reporting standards to the auditor’s report

2. Draft in good form an audit report

3. distinguish between "qualified" and "adverse" opinions explaining when each would be appropriate

4. describe the circumstances which might cause an auditor to "disclaim" an opinion

Chapter 23 - Other Audit, Attestation, and Compilation Services

1. explain "levels of assurance" giving examples of each

2. describe the auditor's reporting responsibilities when associated with OCBA statements, elements of statements, and forecasts and projections

3. explain"prospective financial statements"

4. distinguish between a review and a compilation and describe the work that the CPA would perform for each engagement

Chapter 24 - Internal and Governmental Auditing

1. explain the functions performed by internal auditors

2. distinguish between compliance and operational auditing

3. describe the source of GAGAS

4. explain what is meant by a "single audit" and describe when it is applicable

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