ASSURANCE PRINCIPLES, PROFESSIONAL ETHICS AND GOOD GOVERNANCE

Course Outline for 1st Semester 2015-2016

July 6, 2015
I. GENERAL DESCRIPTION:
Subject : AC311
Descriptive Title : Assurance Principles, Professional Ethics and Good Governance
Credit Unit : Three (3) units
II. COURSE DESCRIPTION:
This is designed to expose students both to the demand for and the supply of the profession's flagship service- financial
statement audits- and to the nature of the value-added services which decision makers demand in the information age.
Topics include: nature of the accounting profession, auditing and assurance fundamentals: relationship among assurance,
attestation and audit services; consulting vs. assurance services; types attestation services (agreed-upon procedures
engagement and review engagement); types of audits (internal, external or financial statement audits, government audit,
and special purpose audits); relationship of accounting and auditing; other services (operational audits, compliance audits,
and non-attest services); professional standards: assurance standards and attestation and auditing standards; public
sector regulation of accounting practice and legal liability; the framework of financial statements auditing: risk-based
approach as audit methodology; audit evaluation and planning, including the concept of risk and materiality; assessing
internal controls, and test of controls including internal controls in computer-based business systems; performance of an
audit; evidence collection, analysis, and substantive tests: reporting: reports on assurance services, attestation services
and financial statement audits; and completing the audit including communications with board of directors and
management concerning internal control weaknesses. Also discussed in detail are the basic professional values and the
Code of Ethics for Professional Accountants and SEC's Code of Corporate Governance.
III. COURSE OBJECTIVES:
At the end of the course, the students are expected to:
1. Fully understand the foundational concepts of auditing and assurance services;
2. Understand the proper implementation and compliance to audit standards, code of professional ethics, good
governance, and legal responsibilities;
3. Understand the concept of a risk-based audit approach;
4. Determine the stages involved in the overall conduct of an audit engagement, which includes but not limited to
planning, internal control evaluation and testing, substantive testing, wrap-up, reporting, and post-audit
responsibilities; and
5. Learn the other fields of auditing and the nature of services that it provides.
IV. LIST OF TOPICS [Based on the CPA Licensure Examination Syllabus for Income Taxation]
1. Fundamentals of Auditing and Assurance Services
1.1. Introduction to assurance engagements
a. Nature, objective and elements
b. Types of assurance engagements (audits, reviews, other assurance engagements)
c. Assurance service vis-à-vis attestation services
1.2. Introduction to auditing
a. Nature, philosophy, and objectives
b. Types of audit
1) According to nature of assertion/data (financial statements audit, operational audit, compliance
audit)
2) According to types of auditor (external independent financial statements audit, internal audit,
government audit)

2. The Professional Practice of Public Accounting

2.1. Public accounting profession
a. Public accounting as a profession
b. Organizations that affect public accounting
 1) Regulatory government agencies (Professional Regulatory Board of Accountancy, Commission on
Audit, Securities and Exchange Commission, Bangko Sentral ng Pilipinas, Insurance Commission,
Bureau of Internal Revenue)
2) Standard-setting bodies (Auditing and Assurance Standards Council, Financial Reporting Standards
Council)
c. Regulation of the public accounting practice
1) Philippine Accountancy Act of 2004/Implementing Rules and Regulations
2) SEC rulings on financial statement presentation
2.2. The CPA’s professional responsibilities
a. Philippine Standards on Auditing
b. Code of Ethics for Professional Accountants in the Philippines
c. Quality Control
d. Responsibilities on fraud, error, and noncompliance

3. The Financial Statements Audit – Client Acceptance, Audit Planning, Supervision and Monitoring
3.1. Overview of the audit process
3.2. Pre-engagement procedures
3.3. Scope and purposes of audit planning
a. Essential planning requirements
1) Knowledge of the business
2) Preliminary analytical procedures
3) Materiality
4) Assessing and managing audit risks
5) Overall audit plan and audit program
6) Considerations of the work of others (experts, internal auditor, other independent auditors)
3.4. Direction, supervision and review
4. Understanding the Entity and its Environment Including its Internal Control and Assessing the Risks of Material
Misstatement
4.1. Industry, regulatory and other external factors, including the applicable financial reporting framework
4.2. Internal Control
4.3. Assessing the risks of material misstatement
4.4. Communicating with those charged with governance and management
5. Audit Objectives, Procedures, Evidences and Documentation
5.1. Nature and significance
5.2. Evidential matters
5.3. Audit procedures/techniques
5.4. Audit working papers
6. Audit Sampling
6.1. Basic audit sampling concepts
6.2. Factors affecting sample design
6.3. Factors affecting sample size
6.4. Sample selection methods
6.5. Evaluation of sample results
7. Completing the Audit/Post-Audit Responsibilities
7.1. Analytical procedures for overall review
1) Related party transactions
2) Subsequent events review
3) Assessment of going concern assumption
4) Obtaining client’s representation letter
5) Evaluating findings, formulating an opinion and drafting the audit report
 8. Reports on Audited Financial Statements
9. Auditing in a Computerized Information Systems (CIS)
10. Other Assurance and Nonassurance Services
V. REFERENCES
Cabrera, Ma. Elenita B. (2011). Assurance Principles, Professional Ethics and Good Goverance. Manila: GIC Enterprises
2010.
Salosagcol, J. et. al. (2011). Auditing Theory: A guide to understanding PSA. 2019 Claro M. Recto, Manila. Conanan
Educational Supply.
VI. COURSE REQUIREMENTS
To take and pass the comprehensive test covering all the topics of the course. To pass, you must obtain at least 60% of
the total and obtain a final grade of 85. Failure to comply the requirements will have a grade of “INC”.
VII. GRADING

Midterm Tentative Final

Components Grade Components Final Grade Components Grade
Quizzes 20.00% Quizzes 20.00% Midterm 33.33%
Assignments 10.00% Assignments 10.00% Tentative Final 33.33%
Attendance 10.00% Attendance 10.00% Comprehensive Test 33.33%
Prelim Exam 30.00% Semi-Final Exam 30.00%
Midterm Exam 30.00% Final Exam 30.00%
Total 100.00% Total 100.00% Total 100.00%

Prepared by

Lowelle Cielo Pacot, CPA

Instructor