SYLLABUS

AKU 3303 – INTERNAL AUDITING

Prerequisite: AKU3302 – Auditing 2
Credit Hours: 3

Instructor:

Course Description
This subject is one of some elective topics in auditing, stressed on internal auditing in
organization or company. Several topics will be discussed such as: internal auditing concepts,
internal auditor profession and environments, internal audit professional standards and code of
ethics, fundamental of internal control system, internal audit process, internal audit reporting and
documentation.
Main objective of this subject is to enable students to understand and know the internal audit
process as independent function in organization and help management process in attaining
organization goals, especially in reviewing of effective design and operation of internal control
system.
Student must be active in this class and using basic auditing knowledge that acquired in
previous classes would be able to participate and discuss internal auditing issues. Students must
have a group to present and discuss a topic according to class schedule together with the rest of
class. After mid-term the group has a mini project in internal auditing case of certain entity. The
mini project is a step by step of internal auditing process applied for certain case (either
compliance or performance audit) in an entity.

Course Objectives
After completion of this course, students are expected to be able to:
a. Understand the process of internal auditing and other topics, and utilize this knowledge to
analyse cases and other issues.
b. Understand the ethical aspects in the implementation of internal audit.

Course Materials
Main textbook:
Moeller, Robert, 2009, Brink’s Modern Internal Auditing, 7th Ed., John Willey & Sons. (B)

Other Sources:
a. Reding et al., 2013, Internal Auditing: Assurance and Advisory Services, 3rd Ed., The IIA
Research Foundation. (R)
b. http://www.theiia.org/
c. http://www.iia-indonesia.com/
Student’s Responsibilities
 The Department of Accounting FEB UGM does not tolerate academic dishonesty. All
violation will be recorded in the FEB systems. For the first offense, a student who violate the
academic integrity will receive a zero point for the assignment (i.e. homework, quiz or
exam). For the second offense, the student will receive a grade of “E” in the course where
the student commits the second. For the third offense, the Department will recommend that
the student be dismissed from the University.
 Read the materials and do the homework to be discussed in each session before class
meeting. Each class meeting should be used to confirm the students’ understanding of the
material and discussion the homework. The students should submit the individual homework
before the class meeting, submitting after that time will be ignored.
 Students are expected to attend all scheduled class meetings. Absence from class meetings
shall not exceed 25%. Students who exceed the 25% limit without a medical or emergency
excuse acceptable to and approved by the Associate Dean of Academic shall not be allowed
to take the final exam and shall receive a grade of E from this course.
 Operating laptop, mobile phone, and other communication devices are strictly prohibited
during class meetings. Any student found operating these devices should leave the class and
will be considered as an absence for the class meeting.
 Students are expected not to be late not more than 15 minutes.

Academic Integrity
Academic integrity forms a fundamental bond of trust between colleagues, peers, lecturers, and
students, and it underlies all genuine learning. There is no tolerance for plagiarism or academic
dishonesty in any form, including, but not limited to, viewing the exams of others, sharing
answers with others, using books or notes while taking the exam, copying answers or papers, or
passing off someone else’s work as one’s own. A FAILURE OF AN ENTIRE COURSE (a
grade of “E”).

Teaching Methods
The student centre learning method is used in this course. Lectures will be the forum for the
introduction and general discussion of each topical issues. To assimilate the material more
readily and in turn enhance better quality discussions, students have to read the relevance topics
prior to attending the class. The instructor will assume that this has been done.
The class will be the forum for students to clarify the material covered in the lectures. Such
tutorial will consist of multiple choice questions, essays, case discussions and class
presentations. Students must attempt the assigned tutorial; questions prior to attending the
corresponding tutorial. One more, the instructor will assume that this has been done.

Grading
Your grade will be determined based on your total score on the following items:
1. Class Attendance and Participation: 10%
2. Group presentation: 15%
3. Quizzes: 10%
4. Mid-Term Examination: 25%
5. Final Examination: 25%
6. Class Project: 15%
 TOTAL: 100%

Your final score will be mapped to a course grade based on the following scheme:
A 90 or above C+ 65 to 69
A- 85 to 89 C 60 to 64
B+ 80 to 84 D 50 to 59
B 75 to 89 E below 50
B- 70 to 74

Course Outline

Week Topic Ref Homework

1 Syllabus Outline Syllabus
2 Foundation of Internal Audit B-1
- Internal Auditing History and Background R-1
3 Internal Control Fundamentals B-3
- Importance of Effective Internal Controls R-6
- Events Leading to the Treadway Commission
- COSO Internal Control Framework
4 Evaluating Organization and Audit Risk B-6
- Risk Management Fundamentals R-4
- COSO ERM: Enterprise Risk Management
5 Professional Standards B-8
- Code of Ethics (issues and case) B-24
Behavioral Aspect in Internal Auditing B-4
6 Internal Audit and Enterprise Governance B-23
- Role of the Audit Committee R-9
- Audit Committee Responsibilities for Internal
Audit
7 Internal Audit and Enterprise Governance B-25
- Fraud Detection and Prevention R-8
MID EXAM
8 Risk-Based Auditing and CSA B-7
- Organizing and Planning Internal Audits B-11
- Internal Audit Preparatory Activities R-12
- Starting the Internal Audit
- Developing and Preparing Audit Programs
- Performing the Internal Audit
9 Planning and Performing Audits B-15
- Understanding the Environment: Launching an R-13
Internal Audit
- Documenting and Understanding the Internal
Controls Environment
- Performing Appropriate Internal Audit
Procedures
- Wrapping Up the Internal Audit
- Performing Internal Audits
10 Audit Evidence and Working Papers B-9
- Gathering Appropriate Audit Evidence B-16
- Audit Assessment and Evaluation Techniques R-10
- Internal Audit Documentation Requirements
11 Audit Reporting and Communication B-17
 - Purposes and Types of Internal Audit Reports R-14
- Published Audit Reports
- Internal Audit Reporting Cycle
- Effective Internal Audit Communications
Opportunities
12 Performance Audit TBA
13 Compliance Audit TBA
14 Review
FINAL EXAM