FACULTY OF LAW AND BUSINESS

PETER FABER BUSINESS SCHOOL

North Sydney and Melbourne

SEMESTER 2, 2016

ACCT601: Australian Auditing & Assurance Services

UNIT OUTLINE
Credit points: 10
Prerequisites / incompatibles:
It is your responsibility as a student to ensure that you have the prerequisites for a
particular unit. You may not enrol in this unit if you have previously passed, or are
currently enrolled in, any unit identified as incompatible with this unit. If you do not
meet these requirements, then you must see your Course Coordinator.

National Lecturer in Charge: Dr Waleed Abdel-Qader

Office location: Level 10, 8-20 Napier Street
Email: waleed.abdel-qader@acu.edu.au
Telephone: (02) 9739 2307
Contact me: by email

Teaching Team:
North Sydney: Dr.Waleed Abdel-Qader (*Campus Lecturer and **NLIC)
Office location: Level 10, 8-20 Napier Street
Email: waleed.abdel-qader @acu.edu.au
Telephone: (02) 9739 2307
Contact me: by email

Melbourne: Dr. Bulend Terzioglu (*Campus Lecturer)

Office location: Room 7.27 (Level 7 (EAST), 250 Victoria Parade)
Email: bulend.terzioglu@acu.edu.au
Telephone: 99653 3829
Contact me: via email for an appointment
Consultation hours: Thursday 12.00-13.00 and 16.00-16.30

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Description: Auditing and assurance services provide credence to published financial
statements, and therefore is one of the major activities of the accounting profession. This unit
introduces students to the concepts and practice of auditing, the way the profession has
developed and the way the profession is meeting current business and social needs
Mode/attendance pattern: The unit will be taught as a three-hour seminar each week
for 12 weeks. Instruction methods may include lectures, videos, and class discussions.
Duration: 12 week-semester.
You should anticipate undertaking 150 hours of study for this unit, including class attendance,
readings and assignment preparation.

LEARNING OUTCOMES
On successful completion of this unit, you should be able to:
1. Explain the objectives of the audit function and describe the professional, ethical, legal
and regulatory aspects of auditing. (GA5)
2. Critically apply theoretical and technical auditing knowledge in collecting audit evidence
and in carrying out risk analysis. (GA 4, GA5)
3. Apply and integrate theoretical and technical auditing knowledge with standards and
relevant sections of the Corporations Act during planning and implementation phases of
the audit.(GA4, GA8)
4. Critically apply ethical reasoning and exercise professional judgment in deciding an
appropriate audit report under various circumstances. (GA4, GA6, GA8)
5. Demonstrate effective team working skills by contributing to the group work, by
collaborating with the syndicate members and by presenting findings in writing and/or
orally. (GA7, GA8, GA9)

GRADUATE ATTRIBUTES
Each unit in your course contributes in some way to the development of the ACU Graduate
Attributes which you should demonstrate by the time you complete your course. You can view the
ACU Graduate Attributes for all courses at http://www.acu.edu.au/204356. All Australian universities
have their expected graduate attributes – ACU’s Graduate Attributes have a greater emphasis on
ethical behaviour and community responsibility than those of many other universities. All of your
units will enable you to develop some attributes.

On successful completion of this unit, you should have developed your ability to:
GA1 demonstrate respect for the dignity of each individual and for human diversity
GA2 recognise your responsibility to the common good, the environment and society
GA3 apply ethical perspectives in informed decision making
GA4 think critically and reflectively
GA5 demonstrate values, knowledge, skills and attitudes appropriate to the discipline
and/or profession
GA6 solve problems in a variety of settings taking local and international perspectives
into account

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GA7 work both autonomously and collaboratively
GA8 locate, organise, analyse, synthesise and evaluate information
GA9 demonstrate effective communication in oral and written English language and
visual media
GA10 utilise information and communication and other relevant technologies effectively

CONTENT

Topics will include:

• The auditing and assurance services profession

• The structure of the profession
• Ethics, independence and corporate governance
• The legal liability of auditors
• Planning and risk
• Overview of elements of the financial report audit process
• Assessing inherent risk, other business risk and materiality
• Understanding the internal control structure and assessing control risk procedures for collecting evidence
• Tests of transactions
• Tests of balances
• Audit sampling
• Completion, review and communication
• The auditor’s reporting obligations

QUALITY ASSURANCE AND STUDENT FEEDBACK

This unit has been evaluated through the ‘Student Evaluation of Learning and Teaching’ (SELT)
online surveys.
This unit has been evaluated through the ‘Student Evaluation of Unit’ (SEU) online surveys.
SEU surveys are usually conducted at the end of the teaching period. Your practical and constructive
feedback is valuable to improve the quality of the unit. Please ensure you complete the SEU survey for
the unit. You can also provide feedback at other times to the unit lecturers, course coordinators and/or
through student representatives.

SCHEDULE

For the most up-to-date information, please check your LEO unit and also note advice from your
lecturing and tutoring staff for changes to this schedule.

Week Starting Lecture topic Readings (Gay & SImnett,

2015)

1 1 Aug 2016 Assurance and auditing Ch1

2 8 Aug 2016 Ethics, independence and corporate governance Ch3

3 15 Aug 2016 Overview of the financial report audit process Ch4

4 22 Aug 2016 Planning, understanding the entity and assessing Ch5

business risk

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 5 29 Aug 2016 Assessing inherent risk, other specific business risks Ch6
and materiality

6 5 Sept 2016 Understanding and assessing internal control Ch7

Individual Assignment due

7 12 Sept 2016 Tests of control Ch8

8 19 Sept 2016 Substantive tests of transactions and balances Ch9

26 Sept 2016 VACATION WEEK

9 3 Oct 2016 Audit sampling Ch10

Group Presentation

10 10 Oct 2016 Completion & review Ch11

Group Presentation
Group Assignment due

11 17 Oct 2016 Auditor’s reporting obligations Ch12

12 24 Oct 2016 Review and wrap-up

ASSESSMENT
In order to pass this unit, you are required to achieve at least 40% in the final exam and obtain an
aggregate mark of at least 50%. Students who fail to achieve the minimum 40% score in the final but
achieve an accumulated score based on all assessment components for the unit of 50 and above will be
awarded a final grade of internal fail (NF).
The assessment tasks for this unit are designed for you to demonstrate your achievement of each
learning outcome.

Learning Graduate
Weighting
Assessment tasks Due date Outcome/s Attributes
(%)
assessed assessed

Individual Assignment Week 7 25% LO1, LO2 GA4, GA5

GA4, GA5, GA6,

Group Assignment Week 10 25% LO1,LO2,LO3,LO5
GA7, GA8, GA9

GA4, GA5, GA6,

Final examination Examination week 50% LO2, LO3, LO4, LO5
GA7, GA8, GA9

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Assessment task 1: INDIVIDUAL ASSIGNMENT
Due date:
Weighting:
Length and/or format:
Purpose:
Learning outcomes assessed:
How to submit:
Return of assignment:
Assessment criteria:
12 September 2016 by 23.50.
25%
1200 ±10% (excluding bibliography)
To test students’ knowledge of the topics covered in weeks 1-4
(both inclusive) and identify struggling students.
LO1, LO2
Via Turnitin
Within two weeks of due date (27 September 2016 by 12.00).
Assessment rubric is provided in Appendix 1.

Assessment task 2: GROUP ASSIGNMENT

Due date:
Weighting:
Length and/or format:
Purpose:
Learning outcomes assessed:
How to submit:
Return of assignment:
Assessment criteria:
10 October 2016 by 23.50.
25%
3000 ±10% words
(1) Give students an understanding of real life auditing issues; (2)
Help students understand the link between theory and practice;
and (3) Foster students’ research, critical analysis and written
and oral communication skills.
LO1, LO2, LO3 and LO5
Students must provide hard and soft copies of their assignment.
Hard copy to be placed in the Assignment box provided with a soft
copy emailed to the lecturer-in-charge.
The turnaround time is two weeks of the due date (25 October 2016
by 12.00)
Instructions (including detailed marking criteria / rubric) relating to
the assignment will be available on LEO by week 3.

Assessment task 3: FINAL EXAMINATION

Due date Examination week (7-27 November 2016)
Weighting 50%

Length and/or format
Purpose
Learning outcomes assessed
Two-hour closed book exam which consists of short-answer
questions and case/essay questions from all topics covered in
this unit.
to assess student’s ability to integrate the course content and
understanding of key issues and theories covered in the course
LO2, LO3, LO4, LO5

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REFERENCING
This unit requires you to use the Harvard or APA referencing system.
See the ‘Academic referencing’ page from the Office of Student Success for more details.

ACU POLICIES AND REGULATIONS

It is your responsibility to read and familiarise yourself with ACU policies and regulations, including
regulations on examinations; review and appeals; acceptable use of IT facilities; and conduct and
responsibilities. These are in the ACU Handbook, available from the website.
The Unit Outline Resources page (http://students.acu.edu.au/241467) contains several important links
as a starting point.

Assessment Policy and Procedures

You must read the Assessment Policy and Assessment Procedures in the University Handbook:
they include rules on deadlines; penalties for late submission; extensions; and special
consideration. If you have any queries on Assessment Policy, please see your Lecturer in Charge.

Academic integrity
You have the responsibility to submit only work which is your own, or which properly acknowledges
the thoughts, ideas, findings and/or work of others. The Framework for Academic Integrity and the
Academic Honesty Policy are available from the website. Please read them, and note in particular
that plagiarism, collusion and recycling of assignments are not acceptable. Penalties for academic
dishonesty can vary in severity, and can include being excluded from the course.

Turnitin
The ‘Turnitin’ application (a text-matching tool) will be used in this unit, in order to enable:
• students to improve their academic writing by identifying possible areas of poor citation and
referencing in their written work; and
• teaching staff to identify areas of possible plagiarism in students’ written work.
While Turnitin can help in identifying problems with plagiarism, avoiding plagiarism is more
important. Information on avoiding plagiarism is available from the Academic Skills Unit.
For any assignment that has been created to allow submission through Turnitin (check the
Assignment submission details for each assessment task), you should submit your draft well in
advance of the due date (ideally, several days before) to ensure that you have time to work on any
issues identified by Turnitin. On the assignment due date, lecturers will have access to your final
submission and the Turnitin Originality Report.

STUDENT SUPPORT
If you are experiencing difficulties with learning, life issues or pastoral/spiritual concerns, or have a
disability/medical condition which may impact on your studies, you are advised to notify your
Lecturer in Charge, Course Coordinator and/or one of the services listed below as soon as possible.
For all aspects of support please contact the Office of Student Success.

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 • Academic Skills offers a variety of services, including workshops (on topics such as
assignment writing, time management, reading strategies, referencing), drop-in sessions,
group appointments and individual consultations. It has a 24-hour online booking system for
individual or group consultations.
• Campus Ministry offers pastoral care, spiritual leadership and opportunities for you to be
involved with community projects.
• The Career Development Service can assist you with finding employment, preparing a
resume and employment application and preparing for interviews.
• The Counselling Service is a free, voluntary, confidential and non-judgmental service open
to all students and staffed by qualified social workers or registered psychologists.
• Disability Services can assist you if you need educational adjustments because of a
disability or chronic medical condition; please contact them as early as possible.
• Indigenous Units on each campus provide information and support for students.
The Unit Outline Resources web page (http://students.acu.edu.au/241467) provides links for each
service.

ONLINE RESOURCES AND TECHNOLOGY REQUIREMENTS

The LEO page for this unit contains further readings/ discussion forums.

TEXTS AND REFERENCES:

Prescribed text
Gay, G. & Simnett, R 2015, Auditing and Assurance Services in Australia, 6th edn, McGraw-Hill
Australia.

Recommended references
Arens, A.A., Best, P., Shailer, G., Fiedler, B., Elder, R. J. & Beasley, M 2013, Auditing,
Assurance Services in Australia: An Integrated Approach, 9th edn, Pearson Education, Sydney,
NSW..
Auditing, Assurance and Ethics Handbook 2016 Australia, CAANZ, Sydney, NSW.

Beasley, MS, Buckless, FA. Glover, SM & Prawitt, DF. 2014, Auditing
Cases: An Interactive Learning Approach, 6th edn, Pearson.

Jubb, C., Rittenberg, L.E., Johnstone, K.M. and Gramling, A 2012, Auditing and Assurance: A
Business Risk Approach, 3rd edn, Cengage Learning, Sydney, NSW.

Leung, P, Coram, P, Cooper, B & Richardson, P 2015, Modern Auditing and

Assurance Services, 6th edn, John Wiley & Sons Australia.

Martinov-Bennie, N, Roebuck, P & Soh, D 2014, Auditing and Assurance – A Case Studies
Approach, 6th edn, Lexis Nexis.

Messier, WF, Glover, SM & Prawitt, DE 2016, Auditing and Assurance

Services: A Systematic Approach, 10th edn, McGraw-Hill, Irwin.

Moroney, R., Campbell, F. & Hamilton, J 2013, Auditing: A Practical Approach, 2nd edn, John Wiley
& Sons Australia, Sydney, NSW.

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Thibodeau, J. & Freier, D 2013, Auditing and Accounting Cases: Investigating Issues of Fraud
and Professional Ethics, McGraw-Hill.

RELEVANT ACADEMIC JOURNALS

Accountancy
Accounting, Auditing and Accountability Journal
Accounting and Finance
Accounting Horizons
Accounting, Organizations and Society
Auditing: A Journal of Practice & Theory
Australian Accounting Review
Internal Auditing
International Journal of Auditing
Journal of Auditing and Finance
Journal of International Accounting, Auditing and Taxation
Managerial Auditing Journal
The Accounting Review
RELEVANT PROFESSIONAL ASSOCIATIONS

Australian Financial Markets Association (AFMA)

The International Auditing and Assurances Standards Board (IAASB)
The Institute of Business and Professional Ethics (IBPE)
The Institute of Internal Auditors Australia (IIAA)

RELATED BUSINESS MAGAZINES AND NEWSPAPERS (AUSTRALASIA)

In the Black (published by CPA Australia)

Charter (published by the Institute of Chartered Accountants Australia and New Zealand)
The Australian Financial Review
Business Review Weekly (BRW)
Financial Times
Asia Times
Far Eastern Economic Review
Hong Kong Business
The Straits Times
The Wall Street Journal Asia

USEFUL WEBSITES

Auditing and Assurance Standards Board (AUASB) http://www.auasb.gov.au/

Australian Accounting Standards Board (AASB) http://www.aasb.com.au/
Australian National Audit Office (ANAO) http://anao.gov.au
Australian Securities and Investment Commission (ASIC) http://asic.gov.au
Australasian Legal Information Institute (ALII) http://austlii.edu.au
CPA Australia http://www.cpaaustralia.com.au
Chartered Accountants Australia and New Zealand http://www.caanz.org.au

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APPENDICES

Appendix 1: Individual Assignment

Assessment weight : 25%

Duration : 15 minutes presentation and 5 minutes Q & A
Aim : To acquaint students with current issues in auditing and enhance oral
communication skills

In consultation with the Lecturer-In-Charge, students are required to select an auditing topic from the list
provided below. You are expected to cite at least five (5) acceptable sources. If you are not clear what
constitutes an acceptable source, please see to your Lecturer-In-Charge.
a. Expectation gap issues
b. Insurance for auditors
c. Similarities and differences between auditors’ reports in Australia and a selected foreign country.
d. Environmental auditing
e. Fraud auditing
f. Forensic accounting and auditing
g. Auditing profession
h. Internal control and auditing
i. Auditors’ role in corporate collapses (choose one corporate failure and examine auditor’s position in
that context)
j. Auditing of corporate governance
k. Issues relating to auditors’ independence
l. The role of audit committees in auditing process
m. Operational audits
n. Ethics in auditing practice
o. Operational audits
p. Misstatement of financial statements
q. How widespread is creative accounting
r. Law suits against auditors
s. Auditing of not-for-profit organisations
You may consider the selected topic in the context of a country other than Australia.

Your assignment should answer the following questions:

1. Provide a brief overview of the nature of the auditing/ethical issue/s involved.
2. How does auditing promote common good?
3. Identify ethical issues, and evaluate those issues from multiple ethical perspectives.

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Grade descriptors that will be used to grade the assignment:

Descriptors HD DI CR PA NN
Development of Demonstrates Demonstrates high Demonstrates good Fair knowledge of the Fails to address the
arguments and use of exceptionally insightful standard of insight understanding of subject matter. question posed. Little
evidence and interesting and originality. Solid major concepts. Arguments with or no support
arguments. A arguments with acceptable support
comprehensive and excellent support . Arguments with
highly-structured reasonable support.
response to the task
Some understanding
High level of and application of Poor or no
Exceptional
understanding and Good understanding relevant ethical understanding and
understanding and
application of relevant and application of theories application of relevant
application of relevant
ethical theories relevant ethical ethical theories.
ethical theories
theories

Critical thinking and Exceptional analytical Highly developed Evidence of analytical Barely sufficient Little or no evidence
analysis and evaluative skills analytical and skills evidence of analytical of analytical skills
evaluative skills skills

Use of evidence Evidence of Evidence of excellent Evidence of good Evidence of Little or no support to
exceptional support support support reasonable support arguments

Research Evidence of extensive Evidence of Evidence of adequate Evidence of some Little or no evidence
reading substantial reading reading background reading of background reading

Expression and Exceptional Highly developed Good presentation Satisfactory Unacceptable

structure of the paper expression and skills in expression with some presentation with an standards of
presentation and presentation presentation errors acceptable level of presentation
(Clarity, citations, presentation errors.
tidiness, grammar, Many mistakes
spelling, spacing,
paragraphing, page Lack of proofreading
formatting)

Following criteria will be used to mark the assignment:

Format and presentation (organisation of the material, pagination, spelling, and overall 15
presentation, referencing)
Introduction 5
Nature of the auditing issue 25
Auditing and common good 25
Ethical issues 25
Conclusion 5
Total marks 100

Turnaround time for results is two weeks of the due date of the assignment.

Submission guidelines
Students should submit their assignment via Turnitin by Monday, 12 September 2016. Other forms of
submission, i.e., faxed, emailed or posted assignments are not acceptable. Submission deadline is
strictly enforced.

Assignments must be submitted with an ACU cover sheet and should:

be typed using one-and-a half (1.5) spacing left justified.

use Ariel or Times New Roman font size 12.
display a one inch margin on all sides.
appropriately cite original work, author(s) etc. Citation and referencing must conform to APA
(American Psychological Association) format both in the body of the paper and its attached reference
section.

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Students should retain both hard and electronic copies of all work submitted for assessment except in
the case of tests and examinations.

Late submission of assignments

Due dates will be strictly adhered to. However, in the case of exceptional circumstances, students may
apply for extensions in the following manner.

Extension for an assignment

Students may apply for consideration of circumstances which significantly hamper their participation or
performance in an assessment. These circumstances include temporary or permanent disability or
exceptional and unforeseen circumstances.

Applications for consideration should be submitted to the lecturer-in-charge before the due date for the
assessment task. Requests for extension must be made on the appropriate form on or before the due
date for submission, and must demonstrate exceptional circumstances which warrant the granting of an
extension.

Assignment Task
Investigate in depth two of the above companies and determine how the irregularities were perpetrated
and the reasons behind them. Also determine, to the extent possible, why these irregularities were not
found by the auditors during their audits of sales revenue and receivables, and other related areas of the
audit.
Presentation
Each team will give a presentation of their topic (15 minutes presentation and 5 minutes of questions
and answers). Each group will be allotted a day and time for presentation.

This assignment aims to improve students’ ability to research, synthesise and present their opinions in a
cohesive manner. This assignment involves only oral presentation which will be graded as follows:

1. What is corporate governance and why is it important? (MEENAKSHI)

2. What is audit committee and how an independent and competent audit committee improves
corporate governance? (MARNIE)

3. Why do related-party transactions represent special risks to the auditor and the conduct of an audit?

4. What is the role of internal audit in assisting management in preparing an evaluation of the
effectiveness of internal control over financial reporting? Is internal audit considered to be
independent of management or an extension of management?(JUAN CA)

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5. The auditor is required to gather appropriate and sufficient reliable evidence to afford a reasonable
basis for an opinion regarding the financial report. What are the characteristics that distinguish
appropriate versus inappropriate and more versus less reliable evidence.

6. What is fraud and what is the auditor’s primary responsibility for reporting a fraud that has been
detected and corrected? To whom should the existence of fraud be communicated? Discuss factors
and the extent to which why auditors cannot ensure that they will discover fraud. (SARWAR)

7. What are the most common approaches that perpetrators use to commit financial reporting fraud?
Describe the auditor’s responsibility in detecting fraud.

8. Which preliminary analytical procedures can help auditors identify areas of potential misstatements
and design appropriate audit procedures?

9. How might management utilise the internal control function to gain assurance about the effectiveness
of its controls over cash and cash management?

10. Are auditors required to evaluate the likelihood of a client remaining a going concern as part of each
audit? What types of conditions and factors should auditors look for to help make this evaluation?
(GAGANDEEP)

Guidelines for presentation

In examining your topic, include real life business cases to support your arguments where
appropriate. Your presentation must be 15 minutes in length and must highlight the significant factors
relative to your chosen topic. All members are expected to take part in the presentation.

Appendix 2

Group Assignment
Weighting : 25%

The assignment will be undertaken by groups of maximum five students allocated by your lecturer
First students should form a group and choose one of the following topics. Second send an email to
lecturer-in charge and advise of the topic title and names of the group members. No topic will be chosen
by more than one group. Therefore, you are recommended to act swiftly to be able to get the topic of
your choosing. In week 3, the lecturer-in-charge will draw up a schedule showing dates/times of
presentations.

Each group will be allocated a company listed on the Australian Stock Exchange.

Requirement

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Identify two major audit risk areas, and explain the potential impact of the audit risk on the company’s
financial statements; and detail the auditing procedures to verify the account balances impacted by the
risk.

Format of the assignment

An assignment coversheet (ensure group members’ full names and student numbers are correctly
written)
A table of contents
An introduction
The body of the assignment
References
12 point Arial or Times New Roma font with 1 inch margins on all sides.
Double-spaced
All pages following the cover page should have a page number.

Case presentations should take 15 minutes with 5 minutes of questions and answers.
All group members should participate in the presentations.

Grading
All group members will be awarded the same assignment grade.

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 GRADING CRITERIA OF PRESENTATIONS

Topic :
Date :

Name Student Number

Max 1 2 3 4 5
mark Very Good Average Poor Very
good poor
Introduction 10
Introduction of presenters and the topic

Explaining the division of the subject matter and order of

presentation
Content 10
Depth in coverage of the subject

Evidence of reading and researching the topic

Key issues clearly identified and summarised

Delivery 80
Use of voice (lively, interesting)

Body language (eye contact, facial expressions, hands and

arms, posture)
Use of visual aids professionally to reading from prepared
script
Cohesiveness (team coordination, inspiring group
performance, disjointed)
Use of allocated time
Engaging, interesting presentation that retains interest

Confidence, enthusiasm and motivation of presenter(s)

Response to questions

Total mark :

Comments

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