You are on page 1of 12

Department of Accountancy and Taxation

College of Arts and Sciences


San Beda College
COURSE SYLLABUS
First Semester, AY 2014-2015
Vision-Mission Statement

Vision
Mission
Core Values

:
:
:

Course Title
Course Code
Prerequisite
Prerequisite to
Credits

:
:
:
:
:

Instructors
Email
Office

San Beda College, a Catholic educational institution, is committed to the Christian formation of the Bedan Community as its
service to the Church, the Philippine society, and the world.
San Beda College envisions a community that is Fully Human, Wholly Christian, Truly Filipino, and Globally Competitive.
San Beda College aims to form its members in Faith, Knowledge, and Virtue
Inculcate in the students the Benedictine core values of prayer and work (ora et labora) that include Study, Community, and
Pursuit of Peace
AUDITING AND ASSURANCE SERVICES, PART I
ACC12
Theory of Accounts Financial Accounting and Reporting (ACC05) and Advanced Accounting Problems, Part II (ACC07)
Auditing and Assurance Services, Part II (ACC13)
6 units

: PROF. LEANDRO BAUZON


: leandroaianmark10@gmail.com
: Department of Accountancy Office, 2nd floor,
St. Anselms Bldg.
Consultation Hours : TTH 10:30AM-1:30PM
Venue
: Department of Accountancy Office, 2nd floor,
St. Anselms Bldg.

PROF. LEOMAR CABARLES


leomarcabarles@yahoo.com
Department of Accountancy Office, 2nd
floor, St. Anselms Bldg.
TTH 12:00PM-1:30PM
Department of Accountancy Office, 2nd
floor, St. Anselms Bldg.

PROF. FRANCISCO VILLAMIN JR.


francisvillamin@yahoo.com
Department of Accountancy Office, 2nd
floor, St. Anselms Bldg.
TH 5:00 6:00 PM
Department of Accountancy Office, 2nd
floor, St. Anselms Bldg.

I.

Course Description: This course initially deals with the basic concepts and methodology of auditing in general. It introduces assurance, attestation and
audit services; professional standards; and reports. The students are expected to get an overview of public accounting profession as distinguished from internal
and compliance audits. The discussion also covers the need for assurance standards, the role of materiality and risk and the standards of quality control in
monitoring the performance of public accounting firms. It also introduces the practitioners responsibilities for ethical behavior and legal liability. The course
also addresses the concepts of evidence, client strategies and the audit and assurance processes and the consideration of internal control in a financial statement
audit covering a risk-based approach. It also highlights the
role of sampling in audit tests. The importance and nature of compliance and substantive tests
are thoroughly covered along with the audit approach by transaction cycle. Intensive and substantive discussions of the audit report and related considerations
are then taken towards the end. It completes the discussion of procedures, addressing the practitioners considerable responsibilities when completing an
engagement like auditing accounting estimates, the review of subsequent events, communicating with the audit committee, inquiries with legal counsel,
management representation letters and forming an opinion on financial statements. Also discussed in detail are the basic professional values and the Revised
Code of Ethics for Professional Accountants in the Philippines and the SECs Code of Corporate Governance.

II. Course Objectives:


At the end of the academic term, the students should be able to:
1.
2.
3.
4.

Define and discuss the different facets of assurance and non-assurance engagements that professional accountants may perform.
Identify and discuss the basic steps necessary to plan and complete a financial statement audit.
Prepare the basic auditing reports on financial statements and internal controls.
Recognize and relate management assertions and audit objectives for financial statements to evidence accumulation (the purpose of audit objectives is to
accumulate evidence to test management assertions about the financial statements.)
5. Explain audit responsibilities and actions with appropriate management assertions and audit objectives (an auditor needs to know what they have to do and
actions to take in order to meet the objectives of an audit.)
6. Evaluate evidence accumulation and determine the appropriate type of reports to issue (in order to issue the correct type of report for audits, auditors need
to understand what the evidence is telling them.)
7. Test transactions and balances (an auditor must understand how to substantively test the transaction cycles and how to test the controls of these same cycles
to provide assurance in both the audit of financial statements and the audit of internal controls over financial reporting.)
8. Relate the traditional financial statement audit with review engagements, other assurance engagements and related services.
9. Define, discuss and apply the basics of the legal and regulatory environment including the code of professional ethics and the professional and technical
standards affecting the accounting and auditing profession.
10. Demonstrate the five (5) Cs of learning accounting, namely: Critical thinking; Communication proficiency; Computer technology efficiency;
Commercial ethical practice and Community involvement.
11. Integrate the Benedictine values and ideals of work, study, prayer, stability and order, obedience, discipline, humility, stewardship, integrity, and
community in learning the basic skills in accounting.
2

III. Course Outline:


Course
Learning Outcomes
Objectives
1, 9, 10, 11 At the end of the lesson, the
student is expected to
Appraise the role of auditing
profession in nation building and
well-functioning
of
capital
markets.
Discover the auditing profession
as the core service offered by a
professional accountant.
Understand
the
increased
globalization of accounting and
auditing
Define assurance and assurance
engagements, its elements and
give examples of assurance
engagements.
Classify assurance engagements
according to level of assurance
and structure
2,3,4,5

At the end of the lesson, the


student is expected to
Understand the concept of
auditing and its objectives and
general principles
Know the philosophy of audit and
the audit engagement process.
Appreciate the importance and

Time
Allotment
1st Week

Course Topic

Teaching Strategies/Activities

COURSE ORIENTATION
FUNDAMENTALS
OF
ASSURANCE Discussion
SERVICES
Group sharing
Concept of Assurance Services
Interaction
Elements of Assurance Engagements
Classification of Assurance Engagements
The Future of Profession

1st Week

Assessment of
Learning

OVERVIEW OF AUDITING
Philosophy of Auditing
Definition of Auditing
Objectives and General Principles Governing
Audit of Historical Financial Information
Audit Engagement Process
Theoretical Framework of Auditing
Rationale of Auditing

Discussion
PowerPoint Presentation
Recitation
Case Study

Homework
Recitation

Homework
Recitation
Case
Analysis
Report

Types of Audits and Auditors


The Objective and Scope of Financial
Statement Audit
Limitations of Audit

necessity of auditing
Understand the different types of
audit and its importance to the
business entities.
Analyze the elements of the
theoretical framework of auditing
Give examples of limitations of
audit
9,10,11

9,10,11

At the end of the lesson, the


student is expected to
Understand the need to adopt the
Philippine Standards on Auditing
based on International Standards
on
Auditing
adopted
by
International
Federation
of
Accountants (IFAC).
Understand the framework of
PSAs.
Be familiar with the PSQC,
Framework, PSAs, and PSREs.
PSAEs. PSRSs.

2nd Week

At the end of the lesson, the


student is expected to
Learn the law governing the
practice of accountancy in the
Philippines
Understand the nature of legal
liability of CPA
Understand the legal concepts
related to auditors liability

3rd Week

PHILIPPINE STANDARDS OF AUDITING Discussion


Introduction
PowerPoint Presentation
Framework of Philippine Standards of Recitation
Auditing
Philippine Standards on Quality Control
System
PSAs, PSREs, PSAEs, and PSRSs

REGULATION OF THE PRACTICE OF


PUBLIC ACCOUNTANCY
Law Governing the Practice of Accountancy
in the Philippines (RA 9298 and Its
Implementing Rules and Regulations
CPAs Legal Liability
Limitations of Auditors Liability
Auditors Responsibilities Relating to Fraud
in an Audit of Financial Statements

Discussion
PowerPoint Presentation
Group sharing
Interaction
Case Study

Homework
Recitation
Case
Analysis
Report
Research
Report
Quiz 1

Homework
Recitation
Case Analysis
Report
Research
Report

9,10,11

At the end of the lesson, the


student is expected to
Appreciate the need for a Code
of Ethics
Know the pertinent provisions of
the Code.

4th Week

Consideration of Laws and Regulations in an


Audit of Financial Statements
CODE OF ETHICS FOR PROFESSIONAL
ACCOUNTANTS IN THE PHILIPPINES
The Need of Ethics in the Profession
The Code of Ethics for Professional
Accountants in the Philippines
Part A General Applications of the Code
Part B Professional Accountants in Public
Practice
Part C Professional Accountants in
Business

Discussion
PowerPoint Presentation
Group sharing
Interaction
Case Study

Homework
Recitation
Case Analysis
Report
Research
Report
Quiz 2

2,3,4,5, 6,
7

At the end of the lesson, the


student is expected to
Understand and define the
framework of risk based audit
process

5th Week

FRAMEWORK
OF
FINANCIAL
STATEMENTS AUDIT
Overview of Risk Based Audit Process
1. Preliminary Engagement Activities
2. Audit Planning
3. Tests of Control
4. Performing Substantive Tests
5. Completing the Audit
6. Issuance of Auditors Report
7. Post Audit Responsibilities

Discussion
PowerPoint Presentation
Group sharing
Interaction
Case Study

Homework
Recitation
Case Analysis
Report

2,3,4,5, 6,
7

At the end of the lesson, the


student is expected to
Describe the standard planning
procedures.
Understand how the auditor
obtains understanding of the

5th 6th
Week

PLANNING A FINANCIAL STATEMENT


AUDIT
Scope and Purposes of Audit Planning
Identifying and Assessing the Risks of
Material
Misstatements
Through
Understanding
the
Entity
and
Its

Discussion
PowerPoint Presentation
Group sharing
Interaction
Case Study

Homework
Recitation
Case Analysis
Report
Quiz 3

client and its environment.


Discuss the contents of the
audit plan and the audit
program.
List and explain other planning
considerations.
2,3,4,5, 6,
7

4, 5,
6,10,11

At the end of the lesson, the


student is expected to
Appreciate the importance of an
internal control system.
Identify
the
different
components of internal control.
Describe the activities in
consideration of internal control
in an audit of financial
statements.
Describe the audit consideration
relating to services using
service organization.

At the end of the lesson, the


student is expected to
Define audit
evidence
Identify attributes of audit
evidence
List down and explain the

Environment
Materiality in Planning and Performing an
Audit
The Auditors Response to Assessed Risks

7th 8th
Week

9th Week
10th 11th
Week

STUDY
AND
EVALUATION
OF
INTERNAL CONTROLS
COSO Framework and Definition of Internal
Control
Objectives and Inherent Limitations of
Internal Control
Types of Internal Control
Elements of Internal Control
Consideration of Internal Control in an Audit
of Financial Statements
Audit Considerations Relating to Services
Using Service Organizations
Communication
of
Internal
Control
Weaknesses Noted During Consideration of
Internal Control in an Audit of Financial
Statements
MIDTERM EXAMINATION
AUDIT EVIDENCE
Types of Audit Evidence
Characteristics of Audit Evidence
Audit Procedures
1. Categories
2. Specific

Discussion
PowerPoint Presentation
Group sharing
Interaction
Case Study

Discussion
PowerPoint Presentation
Group sharing
Interaction
Case Study

Homework
Recitation
Case Analysis
Report
Research
Report

Homework
Recitation
Case Analysis
Report

Audit Documentation
1. Nature and Purpose
2. Contents
3. Types
4. Ownership, Assembly and Custody
5. Confidentiality and Retention

different
types
of
audit
procedures
according
to
purpose and nature.
Discuss
the
auditors
responsibilities
in
audit
documentation (working paper).
2, 4, 5, 6, 7 At the end of the lesson,
student is expected to
Define audit
Sampling.
Differentiate
statistical
non-statistical sampling
Discuss and illustrate the
sampling plans: attribute
variable sampling plans.

the

12th 13th
Week

and
two
and

2,6,7,10,11 At the end of the lesson, the


student is expected to
Identify the different procedures
performed to complete an audit
engagement.
Describe
the
auditors
responsibilities
in
the
completion of the audit
engagement.

13th 14th
Week

AUDIT SAMPLING
Means of Testing
Nature and Purpose of Audit Sampling
Audit Sampling and Its Relationship to Audit
Risk
Approaches to Audit Sampling
Audit Sampling Plans
1. Attribute Sampling
2. Variable Sampling

COMPLETING THE AUDIT AND POSTAUDIT RESPONSIBILITIES


Audit Completion considerations and
procedures
1. Overall Analytical Review Procedures
2. Identification and Disclosure of Related
Parties and Related Party Transactions
3. Subsequent Events Review
4. Assessment of Going-Concern Assumption
5. Litigations, Claims and Assessments
6. Written Representations
7. Evaluating Findings, Formulating an
Opinion and Drafting the Auditors
Report

Discussion
PowerPoint Presentation
Group sharing
Interaction
Case Study

Discussion
PowerPoint Presentation
Group sharing
Interaction
Case Study

Homework
Recitation
Case Analysis
Report
Research
Report
Quiz 4

Homework
Recitation
Case Analysis
Report
Quiz 5

3,6, 10, 11

At the end of the lesson, the


student is expected to
Describe
the
independent
auditors report Understand the
auditors responsibilities and
approach involving review of
financial statements.
Know the requirements relative
to forming an opinion on the
financial statements
Know how to deal with other
information presented with the
financial statements.
Understand and form and
content of the auditors report
when opinion is modified.
Understand
the
auditors
responsibilities
regarding
corresponding
figures
and
comparative
financial
statements
Understand the procedures and
reports on special purpose audit
engagements

14th 16th
Week

Post Audit Responsibilities


1. Subsequent discovery of facts
2. Subsequent discovery of omitted
procedures
REPORTS ON AUDITED FINANCIAL
STATEMENTS AUDIT
The Independent Auditors Report on a
Complete Set of General Purpose Financial
Statements
1. Elements of the Standard Unqualified
Report
2. Modifications to the Independent
Auditors Report
Matters That Do Not Affect the
Auditors Opinion
a. Emphasis of a Matter Paragraph
b. Other Matter Paragraph
Matters That Do Affect the Auditors
Opinion
a. Qualified Opinion
b. Disclaimer of Opinion
c. Adverse Opinion
Reports on Comparatives
1. Corresponding Figures
2. Comparative Financial Statements
Other Information in Documents Containing
Audited Financial Statements
Audits of Financial Statements Prepared in
Accordance
with
Special
Purpose
Framework
Audits of Single Financial Statement and
Specific Elements, Accounts or Items of a

Discussion
PowerPoint Presentation
Group sharing
Interaction
Case Study

Homework
Recitation
Case Analysis
Report
Research
Report

Financial Statement
Summarized Financial Statement
8,10,11

9,10,11

At the end of the lesson, the


student is expected to
Understand
the
auditors
responsibilities and approach
involving review of financial
statements.
Describe the responsibilities
and approach in performing
agreed-upon
procedures
regarding financial information.
Understand
and
perform
engagements
involving
compilation
of
financial
statements.

16th Week

At the end of the lesson, the


student is expected to
Understand the
nature,
responsibilities
and
accountabilities of corporate
governance.
Know the basic principles of
good governance and best
practice recommendations that
business can adopt.

17th Week

18th Week

OTHER
ASSURANCE
AND
NON
ASSURANCE SERVICES
Examination of Prospective Financial
Information
Engagements
to
Review
Financial
Statements
Engagements to Perform Agreed-Upon
Procedures Regarding Financial Information
Engagements
to
Compile
Financial
Statements

SEC CODE OF CORPORATE


GOVERNANCE
Overview
Corporate Governance Responsibilities and
Accountabilities
Audit Committee Oversight Responsibilities
Summary of Principles of Good Governance
and Best Practices Recommendation

Discussion
PowerPoint Presentation
Group sharing
Interaction
Case Study

Discussion
PowerPoint Presentation
Group sharing
Interaction
Case Study

Homework
Recitation
Case Analysis
Report
Research
Report
Quiz 6

Homework
Recitation
Case Analysis
Report
Research
Report

FINAL EXAMINATION

IV. Course Requirements


9

1. Pass the prerequisite subjects which are Theory of Accounts Financial Accounting and Reporting (ACC05) and Advance Accounting Problems Part II
(ACC07).
2. All other policies and procedures contained in the Manual of Regulations for Accounting Students AY 2014-2015.

V. Grading System and Grade Procedure


The following shall be the bases of computing the Midterm and Final Grades:
Students will be graded according to the following criteria:
Class Standing (Quizzes, Recitations, and other course requirements given during the
midterm only)
Departmental Midterm Examination result
TOTAL
100%

MIDTERMS

FINALS
Students will be graded according to the following criteria:
Class Standing (Quizzes, Recitations, and other course requirements given during the
midterm and final term)
Departmental Final Examination result
Departmental Midterm Examination result
TOTAL
100%
GRADE SYSTEM:
Grade
Point
1.00
1.25
1.50
1.75
2.00

Equivalence

Description

97-100
92-96
87-91
82-86
77-81

Excellent
Superior
Very Good
Above Average
Good
10

2.25
2.50
2.75
3.00
5.00

72-76
68-71
64-67
60-63
Below 60

Very Satisfactory
Satisfactory
Fair
Passed
Failed

VI. Attendance Policy


1. Students are considered absent if they arrive in class after the first fifteen (15) minutes of the scheduled class period. They may attend the class but will be
marked absent.
2. Students are considered tardy if they arrive in the class within the first fifteen (15) minutes of the scheduled class period. They are marked late or halfabsent on the professors daily attendance record. Two (2) instances of tardiness or half-absences are equivalent to a full absence.
3. Students are allowed the following maximum number of hours of absences during the regular term:
Status of Student
Not on probation

Course credits/units
1 unit
2 units
3 units
5 units
6 units

Allowable absences
3 hours
7 hours
10 hours
10 hours
10 hours

On probation

1 unit
2 hours
2 units
4 hours
3 units
6 hours
5 units
6 hours
6 units
6 hours
This allowance includes all absences, except approved absences as enumerated in Item no. 6. Students who incur accumulated absences beyond the
allowable number of hours are dropped from the course. They will be given a DF mark in the said course if the official dropping form is not accomplished.
VII. Course References
1. Prescribed Textbook:
Compilation of Engagement Standards issued by Auditing and Assurance Standards Council (AASC) (visit http://www.aasc.org.ph)
11

2. Supplementary readings and reference materials:


Alajar, J. M. (2014). A Practical Application of the Ten Hallmarks of Benedictine Education to the SBC Accountancy Education. Scientia Business Research
Digest, 19-22.
Cabrera, M. B. (2014). Public Accountancy Profession. Manila: GIC Enterprise Co. Inc.
Ireneo, J. M., Ireneo, S. C., & James, G. R. (2012). Auditing and Assurance Principles. Manila.
3. Manual of Regulations For Accountancy Students Ay 2014-2015

Prepared by:

Endorsed by:

Prof. Leandro Bauzon, CPA, MBA


Prof. Leomar Cabarles, CPA
Prof. Francisco H. Villamin, Jr., CPA, MBA
Faculty

Prof. Louisita O. Aristorenas, CPA, MBA, DBA (Candidate)


Chairperson, Department of Accountancy

Noted by:

Approved by:

Dr. Joffre M. Alajar, CPA, MBA


Associate Vice Dean - Accountancy and Business

Dr. Christian Bryan S. Bustamante


Vice Dean College of Arts and Sciences
12