SUBJECT OUTLINE

22730 Auditing and Assurance Services

Course area

UTS: Business

Delivery

Autumn 2015; City

Credit points 6cp

Requisite(s)

(22748 Financial Reporting and Analysis AND 22754 Corporate Accounting AND
( 22747 Accounting for Managerial Decisions OR 22784 Accounting: Concepts
and Applications))
These requisites may not apply to students in certain courses.
There are also course requisites for this subject. See access conditions.

Result type

Grade and marks

Subject coordinator
Subject Coordinator : Dr Brett Govendir
Office : CB08.07.91
Phone : +61 2 9514 3582
Email : Brett.Govendir@uts.edu.au
Consultation: Refer to the 'Staff Information' tab on UTSOnline for details
All queries for subject administration (e.g., exams, classes, special considerations, appeals) are to be directed to the
Subject Coordinator. All communication should be from your official UTS student email address. Staff will not respond
to requests from non-UTS email accounts (e.g., Hotmail or Gmail).

Subject description
This subject addresses the provision of auditing and assurance services. It focuses mainly on the attest services
offered by auditors to provide credibility of information in company and other organisation financial statements. It also
considers the expansion of assurance services beyond the traditional financial statement audit into such areas as risk
assessment, information system reliability, asset protection, detection and prevention of fraud and electronic
commerce. It also deals with the methodology necessary to complete a financial statement audit or to provide other
assurance services, and the criteria and professional standards used to measure information quality and integrity. The
subject studies the audit process of understanding client's operations and risk, analytical review and the pivotal
importance of evaluation of the quality of client internal control and evaluates internal control in a COSO framework.
While internal control systems are evaluated assuming a business environment where information systems are an
integral part of control systems and client operations, a variety of information technology environments (including the
use of enterprise resource planning (ERP) systems such as SAP e-commerce applications) are introduced. The
subject provides an understanding of professional, ethical and legal requirements and responsibilities in completing
and reporting on assurance tasks. It is accredited by the accounting professional bodies.

Subject objectives
Upon successful completion of this subject students should be able to:
1. discuss the role of auditors and auditing in providing financial statement audits on the quality of information firms'
annual financial reports
2. demonstrate the methodologies necessary to provide assurance and audit services in conjunction with the criteria
used to measure information quality and authenticity, especially in the areas of risk assessment, audit planning,
audit execution and the formulation of opinions
3. explain the professional legal and ethical requirements and responsibilities in completing and reporting on
assurance and audit tasks

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4. work as a member of an assurance/audit team designing audit tasks and making judgments, and communicating
assurance/auditing findings to appropriate users.
This subject also contributes specifically to the following program learning objectives:
Research and apply forward thinking accounting strategies in complex and unfamiliar workplace situations in order
to facilitate management decision making (1.1)
Satisfy the academic requirements for membership of CPA Australia and the ICAA (5.1)
Execute a substantial research-based or professionally focused project (5.2)

Contribution to the development of graduate attributes

This subject addresses the provision of auditing and assurance services. It sets out the professional and legal
expectations and responsibilities of financial statement audits and assurance services. The subject provides students
with competencies in audit methodology of risk and control evaluation, evidence collection and evaluation in various
accounting information systems environments. To conduct a thorough audit of any set of financial statements, students
must understand the concepts of risk and control, and the relation between the two.
The subject also provides an understanding of relevant legislation and regulations, and professional and ethical
requirements and responsibilities in completing and reporting on assurance tasks. Students who have successfully
completed this subject have elementary practical experience at conducting parts of the audit process as well as a solid
theoretical background. This knowledge is important to students interested in any aspects of business, organisations
and society as a necessary skill and attribute for an adaptive and functioning manager. The subject is accredited by the
accounting professional bodies.

Content
1.
2.
3.
4.
5.
6.
7.
8.

Auditing, assurance and the public accounting profession

Auditing basics
Understanding the auditors environment
Client evaluation and planning the audit
Business and audit risk assessment
Materiality and audit evidence
Tests of controls
Substantive audit testing

Assessment
Class etiquette
Subject Coordinator expects students to behave in a professional manner. This includes the following:
All mobile phones should be turned off during class
Be punctual your lecturer has right to refuse entry to late students
Be respectful of your lecturer do not pack up before the lecture or tutorial has ended this may affect your class
presentation and participation mark.
Subject Coordination and Teaching and Learning
The subject is taught by the Accounting Discipline Group, UTS Business School. Seminars are only available on the
City Campus. The subject requires attendance for three (3) hours per seminar. The three hours will be divided
informally between a lecture and a student presentation/tutorial. The lecture deals with concepts and the seminar with
discussion of prescribed readings, home assignment material, student presentations and ad hoc references to topical
issues that may arise for instance in the financial press over the semester.
An important part of learning in this subject is to participate in class discussion and homework presentations. The
seminars will enable the further development of these concepts through questions and discussion. They will further
include discussion and student presentation of cases studies. Students should use the lecturer as a senior or
manager on the audit job, in supervising and directing their work, but not providing a model answer or solution.
To be successful in this subject involves teaching and learning. Learning is YOUR part. You must work and study. Do
the home study material; do not be afraid to ask questions and read the textbook and auditing standards.
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Assessment task 1: Weekly Presentations

Objective(s): This addresses subject learning objective(s):
1, 2, 3 and 4
Weight:

20%

Task:

Students must demonstrate communication, problem solving and critical thinking skills during
tutorials. Students will be formed into teams, approved of your lecturer is required (min of 2 and max
of 3). You can only form a group with students in the seminar you are officially enrolled in. If you are
part of a group but not officially enrolled you will receive a mark of 0 for this piece of assessment.
Each week students must prepare homework for seminar/class. Lecturers will randomly call upon
one student per group to present a homework question front of the class. You will not be allocated a
week for presentations therefore your group must be ready to present every seminar. You will NOT
be able to select who presents the question therefore EACH group member must be able to
discuss every question. Group members not selected to present may be called upon to answer
additional questions raised by other students in the seminar/class or your lecturer. Group members
who are absent from class when their somone from their group presents may be given a mark of 0 for
that week at the discretion of the lecturer.
Students, when presenting, will be marked on their ability to demonstrate an understanding of the
theoretical and regulatory background to the homework question, provide a solution that is accurate
and ability to present and communicate this information effectively and efficiently to the class.
During each class the lecturer may also select one (1) group to critically analyse and allocate a mark
to each presenting group. This will be reviewed by the lecturer for accuracy. This task will also form
part of the class presentation and participation assessment. Students, when critically analysing, will
be marked on their ability to analyse each presentations quality of content, presentation style, and
ask further questions. No model solutions or answers will be provided to homework questions.
In-class Questions:
Some seminars may also include In-class Questions. Your answers to these questions do not need
to be prepared before coming to the seminar you will work on them in groups.
Downloading questions from UTSOnline:
Sometimes you may see Download from UTSOnline for the homework or class questions. These
questions will be available one (1) seminar prior to your seminar in the Course Documents area.
You will need to print these questions out and bring them with you to seminar. Lecturers will not bring
copies.

Further
Further information on the marking criteria, calculation of marks and expectations of students is
information: available on UTSOnline.
Assessment task 2: Mid-Semester Exam (Individual)
Objective(s): This addresses subject learning objective(s):
2, 3 and 4
This addresses program learning objectives(s):
5.1 and 5.2
Weight:

30%

Task:

The mid-semester exam will be a centrally conducted exam t(he exam will NOT be conducted in

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Task:

The mid-semester exam will be a centrally conducted exam t(he exam will NOT be conducted in
class). Alternative examinations are NOT provided. If you are not able to attend the mid semester
exam and if your reason is accepted by the coordinator, then the marks available may be added to
the final exam (see further information).
The mid-semester exam is CLOSED BOOK and will be a two hour examination. The exam will
contain both multiple choice and written questions from topics 1-6 (including associated tutorial work)
and test both your factual knowledge of auditing, your ability to apply auditing knowledge and more
complex skills such as critical thinking and problem solving.

Further
Students who do not attend the mid-semester exam will have the weighting of that assessment
information: added to the final examination conditional on the students submitting, receiving approval and
complying with the requirements of special examination application in accordance with the UTS
rules. If the composite mark for the final exam is more than 65 percent, the UTS rules on borderline
result (range of 45-49, inclusive) shall apply whereby students will be allowed to undertake a
supplementary final examination. Where a student completes and passes a supplementary
examination, the maximum mark awarded for the subject will be 50 Pass.
Assessment task 3: Final Exam (Individual)
Objective(s): This addresses subject learning objective(s):
1 and 2
This addresses program learning objectives(s):
1.1
Weight:

50%

Due:

Formal examination period - Its time and location will be announced in the official formal examination
timetable.
The final examination is a Formal Examination conducted by the University. Check the Exam
Timetable for details of the exam date, time and location. Please do not book overseas travel until
your exam dates are known. Alternative examinations are not provided for students who have booked
holidays during exam times. The final exam will cover the entire subject, covering all work listed in
the Weekly Study Programme.
The final exam will cover the entire subject covering all work listed in the weekly seminar work
including the case studies and may include questions on topics covered by the mid-semester
examination. More information about the time and location of the final examination will be given in
class and on UTSOnline. The Final Exam will be conducted under University examination conditions,
and hence thoroughly address concerns regarding secure assessment.

Further
The final exam is restricted open book. Specifically,
information:
1. You can only bring ONE handbook and this must be the current 2015 version of the Auditing and
Assurance Handbook only (other versions of the book will not be permitted in the exam).
2. Your handbook can be inderlined and highlighted and may contain your own handwritten notes
throughout. You can use tabs but cannot have any notes or numbers written on tabs used in your
book - but you cannot have any sticky notes or extra pages either handwritten or photocopies
attached or inserted. If these are found - you will be charged with academic misconduct and this will
remain on your university record.
3. The Final Exam will be conducted under University examination conditions and all handbooks will
be inspected to ensure they comply with the above rules, and hence thoroughly address concerns
regarding secure assessment.

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Minimum requirements
Students must achieve at least 50% of the subjects total marks.

Required texts
Moroney, Campbell and Hamilton (2014): A Practical Approach, 2nd Edition, Wiley
Study Guide for Auditing (electronic)
CAANZ (2015) Auditing and Assurance Handbook 2015, Wiley.
All 3 resources are avaialble in discounted packs from the Coop Bookshop - students have the choice of either a
paper or electronic textbook in the 2 available packs. Only 2015 hard copy Handbooks can be taken into the final exam.

Recommended texts
References
Bell TF, Peecher ME and I Solomon The 21st Century Public Company Audit: Conceptual Elements of KPMG's
Global Audit Methodology KPMG LLP
Bell T F Marrs I Solomon H Thomas [1997] Auditing Organisations Through a Strategic-Systems Lens KPMG Peat
Marwick LLP
Committee of Sponsoring Organisations of the Treadway Commission [1992] Internal Control - An Integrated
Framework
CPA Australia Quality Control Management in Accounting Practices: Guidance Manual for Practitioners
Greenstein M and M Vasarhelyi [2002] Electronic Commerce: Security Risk Management,and Control2 McGraw-Hill
Hall J A [2000] Information Systems Auditing and Assurance South-Western College Publishing Cincinnati Ohio
Watts R and Z Zimmerman [1986] Positive Accounting Theory Prentice Hall (Chapter 13)
Weber R [1999] Information Systems Control and Audit Prentice Hall Sydney
Wilkinson J W and M J Cerullo [1997] Accounting Information Systems Wiley 3 edition
Wright M [1999] Auditing in an IT Systems Environment Audit Guide No 5 Australian Accounting Research
Foundation Melbourne
Articles
Getting Technical [1996] Auditing Issues: Auditing Investments under CHESS Charter pp 62 & 63
Fargher N L and A A Gramling [1996] A New Market for Attestation Services: The Performance Presentation
Standards of the Association for Investment Management and Research Auditing: A Journal of Practice and Theory
15 Supplement
Greinke A and G Shailer [1997] Auditing the Auditors - The Esanda Case Australian Accountant (Now Australian
CPA) 67 7 August pp 16 -18
Watts R and Z Zimmerman [1983] Agency Problems Auditing and the Theory of the Firm Journal of Law and
Economics 26 pp 613-634
Reading the Professional and Financial Press
Students should also be aware of new ideas practices and topical issues. Australian professional body journals the
Australian CPA and Charter, business and trade magazines such as The Business Review Weekly and the financial
press such as the Australian Financial Review, Sydney Morning Herald and The Australian are very useful in being
aware of topical issues and in understanding practical aspects of this subject as well as business and professional
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aware of topical issues and in understanding practical aspects of this subject as well as business and professional
views on auditing. Auditing: A Journal of Practice and Theory is another interesting source to gain a broader
understanding of auditing.

Other resources
Legislation
Corporations Act 2001
Competition and Consumer Act 2010 (replacing Trade Practises Act 1974)
Websites
Auditing and Assurance Standards Board (AuASB) www.auasb.gov.au/Home.aspx
Auditing and Assurance Standards Board (AuASB) www.auasb.gov.au/Home.aspx
Accounting Professional Ethical Standards Board (APESB) www.apesb.org.au/
Australian Prudential Regulation Authority (APRA) www.apra.gov.au/
Australian Securities and Investment Commission (ASIC) www.asic.gov.au/
Australian Accounting Research Foundation (AARF) www.aarf.asn.au/
The Commonwealth Treasury www.treasury.gov.au/
Financial Reporting Council www.frc.gov.au
American Institute of Certified Public Accountants (AICPA) www.aicpa.org/
International Federation of Accountants www.ifac.org/
The Institute of Internal Auditors Australia iia.asn.au/
Information Systems Audit and Control Association www.isaca.org/
Public Company Accounting Oversight Board (PCAOB) www.pcaobus.org

Academic liaison officer

Dr Maria Ossimitz, Accounting Discipline Group, telephone 9514 3069
Mr Harry Tse, Economics Discipline Group, telephone 9514 7786 / 9514 5456
Dr Otto Konstandatos, Finance Discipline Group, telephone 9514 7758
Dr Paul Wang, Marketing Discipline Group, telephone 9514 3692
Dr Daryl Adair, Management Discipline Group and BBus (Kuring-gai), telephone 9514 5498
Dr Jonathan Pratt, Management Discipline Group, telephone 9514 8436
Any arrangements should be negotiated within the first six weeks of semester.

Support
Student Services Unit/Counselling: Student Services provides a range of free and confidential professional services
to support different aspects of your life and learning at UTS ( www.ssu.uts.edu.au). These services include counselling
for personal and learning problems or issues. If you are experiencing difficulties with your overall study program, for
whatever reason, phone 9514 1177 (City campus) or 9514 5342 (Kuring-gai campus).
Students with disabilities or ongoing medical conditions: If you are a student who has a disability or ongoing
medical condition that requires support services you are encouraged to contact the disability support officers or
Special Needs Service (phone 9514 1177; www.ssu.uts.edu.au/sneeds/) for a confidential interview. Supporting
documentation regarding your disability or ongoing medical condition is required if you wish to apply for assessment
adjustments, including alternative assessment conditions. Each faculty has appointed academic liaison officers (ALOs)
who are responsible for approving assessment adjustments. Meeting with the disability support officers or Special
Needs Service before seeking assessment adjustments from your ALO is required.
Improve your academic and English language skills: Marks for all assessment tasks such as assignments and
examinations are given not only for what you write but also for how you write. If you would like the opportunity to
improve your academic and English language skills, make an appointment with the HELPS (Higher Education
Language and Presentation Support) service in Student Services.
HELPS (Higher Education Language and Presentation Support): HELPS provides assistance with English
language proficiency and academic language. Students who need to develop their written and/or spoken English
should make use of the free services offered by HELPS, including academic language workshops, vacation intensive
courses, drop-in consultations, individual appointments and Conversations@UTS (www.ssu.uts.edu.au/helps). HELPS
is located in Student Services, on level 3 building 1 at City campus and via the Student Services area at Kuring-gai
(phone 9514 2327 or 9514 2361).
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Study skills / learning support: If you are experiencing difficulty with your studies or need to develop the necessary
study skills you require for your course, there is a host of useful information and websites to help you on the UTS
Business School, Teaching And Learning website. Links on how to write better, study more effectively, available
support services/staff to help, how to complete assignments; as well as tips for successful study and online study skills
resources can all be accessed
( www.uts.edu.au/current-students/current-students-information-uts-business-school-0/study-and-assessment-resources-5).
Careers Service: The UTS Careers Service aims to actively support the career development needs of all UTS
students ( www.ssu.uts.edu.au/careers/).

Statement about assessment procedures and advice

Assessment of coursework subjects
All staff and students involved in the assessment of coursework subjects at UTS are subject to the Policy for the
Assessment of Coursework Subjects. The policy is applicable to the assessment of all coursework subjects. This
policy does not apply to thesis subjects that are taken by students enrolled in research degrees, but does apply to any
coursework subjects undertaken by research degree students. It does not describe policy that relates to academic
progression through a course of study.
The policy should be read in conjunction with the Procedures for the Assessment of Coursework Subjects. Both are
available at: www.gsu.uts.edu.au/policies/assessment-coursework.html

Statement on copyright
Australian copyright law allows you as a student or researcher to copy and use limited amounts of other people's
material in your study or research without their permission and free of charge.
This applies to any sort of published or unpublished work, and includes written material, tables and compilations,
designs, drawings (including maps and plans), paintings, photographs, sculpture, craft work, films (such as feature
films, television programs, commercials and computer video games), software (such as computer programs and
databases), sound recordings, performances and broadcasts (including podcasts and vodcasts of these) and text,
including books, journals, websites, emails and other electronic messages.
It is important to remember that you can only use a limited amount for your study or research purposes and that
you need to correctly acknowledge the author and reference their material when you use it in your work.
Incorrect or improper use of copyright protected material could result in breaking Australian copyright law, for which
significant penalties apply. Incorrect or improper use of copyright protected material at UTS would result in
consideration under the UTS Student Misconduct rules.
UTS Rules and the UTS Student Charter require that students familiarise themselves and comply with UTS student
policies and procedures. The copyright information advising what you can copy and how much you can use can be
seen at: www.uts.edu.au/about/utsweb-statements/copyright-statement

Statement on plagiarism
Plagiarism is a broad term referring to the practice of appropriating someone else's ideas or work and presenting them
as your own without acknowledgment. Plagiarism is literary or intellectual theft. It can take a number of forms,
including:
copying the work of another student, whether that student is in the same class, from an earlier year of the same
course, or from another tertiary institution altogether
copying any section, no matter how brief, from a book, journal, article or other written source, without duly
acknowledging it as a quotation
copying any map, diagram or table of figures without duly acknowledging the source
paraphrasing or otherwise using the ideas of another author without duly acknowledging the source.
Whatever the form, plagiarism is unacceptable both academically and professionally. By plagiarising you are both
stealing the work of another person and cheating by representing it as your own. Any instances of plagiarism can
therefore be expected to draw severe penalties and may be referred to the Faculty Student Conduct
Committee.
Cheating means to defraud or swindle. Students who seek to gain an advantage by unfair means such as copying
another student's work, or in any other way misleading a lecturer about their knowledge or ability or the amount of
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another student's work, or in any other way misleading a lecturer about their knowledge or ability or the amount of
work they have done, are guilty of cheating.
Students who condone plagiarism by allowing their work to be copied will also be subject to severe disciplinary action.
Avoiding plagiarism is one of the main reasons why the UTS Business School is insistent on the thorough and
appropriate referencing of all written work.

Statement on UTS email account

Email from the University to a student will only be sent to the student's UTS email address. Email sent from a student
to the University must be sent from the student's UTS email address. University staff will not respond to email from
any other email accounts for currently enrolled students.

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22730 Assurance Services and Audit Autumn 2015

Study Program
This sets out the homework to be completed in this subject. It schedules the reading,
questions and assignments to be prepared for class presentation and discussion for each
week. The number of questions set each week is in line with the Universitys guidelines on
the amount of homework students should be expected to complete for a standard 6credit point subject (that is, 6 to 9 hours per week of home study per subject).
Note that the questions listed in a week are the questions for discussion in that week and
address the previous weeks topic.
The references are identified as follows:
Ch chapters from the textbook
Students should also read the relevant Auditing Standards from their 2015 Handbook (these
will be identified in the lecture slides)

Instructions for completion of assigned work

Readings
Students should read the relevant Auditing Standards and textbook chapters before
attempting the homework. There are also multiple choice, true/false and short answer
questions on UTSOnline and in your iStudy USB for each week. You should attempt these
questions before starting the homework to solidify your understanding of the relevant
concepts.
Homework
The homework questions build on the factual knowledge you obtained by attending the
lecture and reading the relevant textbook and Handbook chapters. You must apply your
knowledge to answer the questions. Questions from the textbook are marked MCH XX.
Students must attempt the homework questions before they attend the tutorial. Your
tutorial/seminar leader will call upon students randomly to provide their answers to
facilitate discussion on important issues from that chapter. Lecturers will expect every
student in the class to have completed the homework. Any student found in the class
without the homework may be asked to leave failing to present homework to the class
when randomly selected will affect your class presentation and participation mark.

The date in the week column is for the Monday of that week.
Week
starting

LECTURE TOPIC REFERENCES

CLASS WORK
(based on previous weeks
lecture)

Introduction and overview of audit and

assurance

Tutorials begin in
Week 1.

Ch 1

No preparation required for the

first tutorial but attendance is
compulsory. Failure to attend may
affect your assessment for the
remainder of the term.

1
23 Feb

In class questions
Audit bingo
Ethics, legal liability and client acceptance
2
2 Mar

Ch 2
Risk assessment

3
9 Mar

Ch 3 and 4

Audit evidence
4
16 Mar

5
23 Mar

6
30 Mar

Homework
MCH 1.30, 1.31, 1.34, Case Study
Cloud 9
Homework
MCH 2.27 and 2.28 (students
should prepare these 2 questions
together as a bundle), 2.30, 2.37,
2.29

Ch 5

Homework
MCH 3.35, 3.37, 4.25 & 4.26
(bundle), 4.31, 4.34

Gaining an understanding of the clients

system of internal controls

Homework
MCH 5.24, 5.34, 5.35, 5.36

Ch 6
Sampling and overview of the risk response
phase of the audit
Ch 7

Homework
MCH 6.24, 6.30, 6.32, 6.36

Week
starting

7
6 Apr
8
13 Apr

LECTURE TOPIC REFERENCES

CLASS WORK
(based on previous weeks
lecture)

Execution of the audit testing of controls

Homework
MCH 7.28, 7.32 & 7.33 (bundle),
7.35, 7.36

Ch 8
MIDSEMESTER EXAM WEEK
VICE-CHANCELLORS WEEK

20 Apr

9
27 Apr

No teaching

Execution of the audit performing

substantive procedures

Homework
MCH 8.29, 8.32, 8.35, 8.36

Ch 9
10
4 May

Substantive testing and balance sheet

accounts

Homework
MCH 9.28, 9.32, 9.34, 9.36

Ch 10
11
11 May

Substantive testing and income statement

accounts

Homework
MCH 10.25, 10.30, 10.31, 10.37

Ch 11
12
18 May

Completing and reporting on the audit

Ch 12
Summary lecture

13
25 May

14
1 Jun

Homework
MCH 11.25, 11.33, 11.34, 11.36

Study week
See UTSOnline for details of drop-in
consultation days
Formal exam period

Homework
MCH 12.29, 12.30, 12.33, 12.34 &
12.35 (bundle)