UNIVERSITY OF TEXAS AT DALLAS

SCHOOL OF MANAGEMENT
Course: AIM 6334
Auditing
Spring 2006
Instructor: Liliana Hickman-Riggs, CPA CITP CMA CIA CFE FCPA DABFA MS

Item Phone Location

Campus 972 883-5903 SOM 4.228
Business 214 378-5400 (# to call for a timely answer)
Fax 469 232-0768
Email llh017100@utdallas.edu and
liliana@accounting.net
Office Hours Tuesday 5:30 - 6:45 PM
Friday 5:15 - 6:15 PM or by appointment
Website http://www.utdallas.edu/~llh017100/
Course Credits Time/Day
AIM 6334 501 10081 3 credit hours Tuesday 7:00-9:45 pm SOM 1.117
Textbook Internet Access
Auditing & Assurance Services, Messier, 4th Edition, http://www.mhhe.com/messier4e
McGraw-Hill
Miscellaneous Information
Last day to drop the course with a "W": March 24, 2006

COMMENTS:
AIM 6334 Auditing is a challenging and difficult course that can vastly add to your auditing
knowledge.
• To be successful in this course, you must devote adequate preparation time.
• The course text chapter reading assignments and homework problems are indicated on the
attached schedule.
• Chapter reading assignments should be completed in a timely manner.
• The assignment schedule may be modified during the semester if necessary.
• All efforts will be made to cover each chapter in a detailed manner. Because of the quantity of the
material to be covered, an in depth study of each chapter cannot be realistically achieved. It is
therefore the responsibility of each student to study any portions not covered in class.

COURSE REQUIREMENTS:
Two close book examinations
One research paper
Five case/problems assignments
EXAMINATIONS:
There will be two regular closed book examinations, each covering the chapters as indicated on the
assignment sheet. Exam dates are firm. Each test is a combination of problems and multiple
choices. Assume there will be at least one problem and “about 5 multiple choice questions per
chapter”. Please bring a Scantron form 882-E at each examination. No scratch paper is
allowed in the examination.

Total scores to achieve the following grades: A =270, B=240, C=210

Two closed book examinations @ 100 pts each 200

Research paper @ 50 pts 50
Problems Assignments (5) @ 10 pts each 50
Total available points 300

PROBLEMS ASSIGNMENTS:
Must be submitted via WebCT by midnight of the due day. WebCT will promptly acknowledge the
receipt of your assignments and I will correct your work at a later time. Be careful, strange things tend
to happen in cyberspace. If you have any problem, please contact me.

RESEARCH PAPER REQUIREMENT:

In your textbook, you are given the financial statements of EarthWear for 2004 and 2005 with the
related notes, auditor’s report, and management report (you can also find them included in the annual
report online www.mhhe.com/messier4e). Using analytical procedures and other skills identify
financial statement items that you feel the audit team would have wanted to spend more time
reviewing and testing to ensure that there were no material misstatements in the financial statements.

For each item, include the accounting and auditing reasoning for including the item in your list.
Furthermore, analyze the notes to the financial statements and gain additional insights that you can
use for including any of the items you believe would have been of special interest to the audit team.
Use your common sense, your keen sense of “smell” and reasoning skills a junior auditor must
possess.

You will present for grading the complete work done in paper form on April 11, 2006. In
addition, a copy of the paper must be submitted via WebCT.

GRADING CRITERIA for Research paper

Each case should not exceed 10 pages, including graphs and visuals aid. The analysis will be graded
based on the following criteria:

1. Mastery of Auditing & Accounting Concepts

Thorough understanding of Accounting Principles, GAAS standards, and their applications.

2. Responsiveness to the Assignment

Assignment directly and completely accomplished in an exceptional manner.

3. Appropriateness for the Audience

Effective point of view, tone, attitude toward content.

4. Coherent Organization
Clear transitions and logical progression of ideas, major points, principles and conclusions.
6. Clarity and Conciseness
Clear, efficient well constructed sentences with specific appropriate vocabulary.

7. Correct Use of Mechanics

English is characterized by correct adherence to conventions of grammar, capitalization, spelling
and usage

8. Citation and Documentation

Clearly incorporates material into the paper, documents sources accurately.

9. Visual Presentation
Graphics, charts, and visual aids are effectively used to enhance contexts.

10. Overall Evaluation

The paper accomplishes the purpose of the assignment. The writer keeps a narrow
focus on the topic while providing the reader a broad exposition on the subject.

Other Additional Observations deemed critical by the instructor.

ACADEMIC ETHICS:
All students are expected to behave in accordance with the academic integrity policy of The University
of Texas at Dallas. A student's personal integrity is essential to successfully completing this course.

ASSIGNMENTS:
Text chapter assignments are indicated on the attached schedule. Chapter reading should be
completed in a timely manner. Work as many of the problems, cases and exercises as you can to
better understand the material. Although exercises and problems will be used to illustrate major
points during the class lectures, the ultimate responsibility rests with you.

ATTENDANCE: Required at all classes.

EXPECTATIONS:
My expectations of you are the following:
1. The knowledge you acquire in this class will serve as the basis for future study and work in
whatever aspect of the business world you find yourself, and will add value and quality to the
business or public accounting arena you are currently in.
2. The prevailing criteria for this class involve critical thinking, analysis, and problem solving, as well
as organization.

I will hold you responsible for a thorough understanding of all material presented in class as well as all
text material, any additional handouts that I may provide, and any assigned material. The knowledge
you will need in this class will not accrue only from your textbook. I expect you to perform
research and acquire knowledge or information to supplement the issues presented or discussed in
class. I expect you to participate. Spectators have no place in this class. This is not a passive class; it
is a participative and active class.

Your responsibilities are to prepare diligently and to read the material assigned.
Ø Respond to and comment on your classmates’ discussion.
My responsibilities are
Ø To prepare diligently,
Ø To solicit your contribution,
Ø To provide you with a framework for organizing and presenting the material in a meaningful
way and to foster your learning.

STRATEGIES FOR SUCCESS:

To further ensure your success, I suggest you follow these strategies:
• Participate in Class: ask questions, contribute answers, offer feedback
• Reinforce your understanding with reading the chapters before and after class
• Apply your knowledge to problem solving, the more you solve, the better you learn
• Do, do, do enough exercises to turn the “theoretical information” into “practical skills”
• Re-do homework, to become proficient. Copying solutions ? working problems
• “Read the English!” If you understand the question you will find a correct solution
• Analyze and learn from your mistakes. Failure is a great way to learn. Preparation is success
• Exchange contact data with a classmate; in case you miss a class you must stay informed

RULES OF CONDUCT:
a) I expect you to be present in class.
b) Any time you are not in class, your learning will suffer. I am not addressing those of you who
have the occasional business requirement to travel or to work late. I am referring to multiple
absences. They will have an adverse impact on your grade.
c) You will be required to participate in the solution of the problems. A silent, non-participatory
approach is not acceptable.
d) I expect you to do as you do in the business world; seek help and advice when necessary, and
provide help and advice when asked.

AMERICANS WITH DISABILITIES ACT COMPLIANCE:

It is the policy of The University of Texas at Dallas to provide reasonable accommodations for
qualified individuals who are students with disabilities. This University will adhere to all applicable
Federal, State and local laws, regulations and guidelines with respect to providing reasonable
accommodations as required to afford equal educational opportunity. It is the student's responsibility
to contact the faculty member and/or the Service for Students with Disabilities in a timely manner to
arrange for appropriate accommodations

COURSE OBJECTIVES AND DESCRIPTION:

Basic concepts, philosophy, standards, procedures, and practices of auditing are presented. Topics
include generally accepted auditing standards, the changing role of the independent auditor in society,
professional conduct and ethics, the auditor’s reporting responsibilities, risk assessment, internal
control, fraud, evidential matter, and auditing in the global economy. The course will serve as a base
for the ever interesting opportunities in Forensic Accounting and Fraud Examination area.

The following is an expansion and explanation of the course description.

COURSE OBJECTIVES:
TO USE CRITICAL THINKING
• To achieve a thorough understanding of the basic concepts, philosophy, standards,
procedures and practices of the public accounting profession’s reporting obligations and
responsibilities.
• To understand and appreciate how the basic concepts, philosophy, standards, procedures and
practices of the public accounting profession affect the various stakeholders who rely or may
rely on general purpose financial statements and/or other financial or non-financial information
that has been reported on by professional accountants.
• To understand the meaning of "professional standards” and their history, evolution and
establishment as they relate to professional accountants’ reporting responsibilities.
• To understand and appreciate the difference between professional standards that relate to
professional accountants’ reporting responsibilities and established criteria used by preparers,
e.g., generally accepted accounting principles.
• To understand and appreciate the dynamic and changing public accounting and auditing
profession.

TO UNDERSTAND AND APPRECIATE THE ETHICAL, LEGAL AND BUSINESS ISSUES OF THE
PUBLIC ACCOUNTING PROFESSION.
• Discuss the potential conflicting objectives among users, preparers and auditors of general-
purpose financial statements.
• Discuss the current ethical issues facing the accounting profession.
• Discuss the current legal and regulatory environment facing the profession and its clients and
the current credibility crisis facing the profession.
• Discuss the changing business model and its effect on management, investors, creditors and
the public accounting profession.

TO RECOGNIZE THAT AUDITING AND ACCOUNTING ARE NOT LIMITED BY NATIONAL

BOUNDARIES AND THAT DIFFERENCES DO EXIST.
• The current status of international accounting standards.
• The current status of international auditing standards

TO ENJOY THE COURSE WHILE ACHIEVING KNOWLEDGE OF THE MATERIAL.

 AIM 6334 Auditing Schedule Outline
Spring 2006
(Modifications on timing and assignments will be made if necessary at the discretion of the instructor)
MONTH DATE SUBJECT MATTER HOMEWORK
Jan 10 Introduction of the course

17 Chapter 1: An Introduction to Auditing & Assurance 1 – MC 11-20

Chapter 2: The Public Accounting Profession 2 – MC 14-25

24 Chapter 3: Materiality and Risk Assessment 3 – MC 13-22, 24, 26

Chapter 5: Planning and Types of Audit Test 5 – MC 16-28
Problem 1 due on January 29, 2006
31 Chapter 6: Internal Control in a Financial Statement Audit 6 – MC 12-25
Chapter 7: Auditing Internal Control over Financial Reporting 7 – MC 16-29, 38

Feb 7 Chapter 4: Audit Evidence and Audit Documentation 4 – MC 12-21, 22, 27

Problem 2 due on February 12, 2006
14 Chapter 10: Auditing the Revenue Process 10 – MC 12-23, 28
Chapter 11: Auditing the Purchasing Process 11 – MC 12-22, 27

21 Chapter 12: Auditing the Human Resource Management Process 12 – MC 14-23

Problem 3 due February 26, 2006
28 Examination 1 Chapters 1-7 & 10-12 Please bring a Scantron form 882-E
March 6-11, 2006 SPRING BREAK – NO CLASS
March 14 Chapter 13: Auditing the Inventory Management Process 13 – MC 14-26, 32
Chapter 14: Auditing Financing Process 14 – MC 12-22, 27

21 Chapter 15: Auditing Financing Process 15 – MC 11-20, 25

Chapter 16: Auditing Financing Process 16 – MC 11-21, 24, 27

28 Chapter 8: Audit Sampling 8 – MC 11-20

Chapter 9: Audit Sampling 9 – MC 11-20
Problem 4 due on April 2, 2006
Apr 4 Chapter 17: Completing the Engagement 17 – MC 13-21, 28
Chapter 18: Reports on Audited Financial Statements (Part 1) 18 – MC 14-28, 29-30
Research Paper is due on April 11, 2006 – Paper form & WebCT
11 Chapter 18: Reports on Audited Financial Statements (Part 2) 21 – MC 15-29, 34
Chapter 21: Assurance, Attestation, and Internal Auditing Services

18 Chapter 20: Legal Liability 20 – MC 14-25

Chapter 19: Professional Conduct, Independence, and Quality 19 – MC 15-27, 30-31
Control
Problem 5 is due on April 23, 2006
25 Final Examination Chapters 8-9 & 13-21 Please bring a Scantron form 882-E
Although the final exam is not comprehensive in nature, encompassing all chapters covered, a few
core competency questions related to the general audit process will be in the final exam.