Course Title: Audit and report on financial systems and records

Part B: Course Detail

Teaching Period: Term1 2020

Course Code: ACCT5388C

Course Title: Audit and report on financial systems and records

School: 650T Vocational Business Education

Campus: City Campus

Program: C6163 - Advanced Diploma of Accounting

Course Contact: Doug Gourlay

Course Contact Phone: +61 3 9925 5944

Course Contact Email: doug.gourlay@rmit.edu.au


Name and Contact Details of All Other Relevant Staff

Course Coordinator :   

Meetu Aggarwal

E- mail:   meetu.aggarwal@rmit.edu.au

Ph: 9925 1621        

Contact timings:

Monday and Wednesday: 8:30am - 6:00pm

Thursday and Friday: 8:30am - 2:30pm

          

Nominal Hours: 40

Regardless of the mode of delivery, represent a guide to the relative teaching time and student effort required to successfully achieve a particular competency/module. This may include not only scheduled classes or workplace visits but also the amount of effort required to undertake, evaluate and complete all assessment requirements, including any non-classroom activities.

Pre-requisites and Co-requisites

FNSACC516 Implement and maintain internal control procedures

Course Description

This unit describes the skills and knowledge required to supervise an audit of financial systems and prepare the appropriate reports, including assessing options, identifying information sources, determining audit strategies, monitoring progress, reviewing data, verifying financial statements and determining appropriate reporting formats.

 

It applies to experienced individuals who use specialised knowledge and systematic approaches to analyse and evaluate financial information against specified criteria and compliance requirements.

 

Work functions in the occupational areas where this unit may be used are subject to regulatory requirements. Refer to the FNS Implementation Guide Companion Volume or the relevant regulator for specific guidance on requirements.


National Codes, Titles, Elements and Performance Criteria

National Element Code & Title:

FNSACC602 Audit and report on financial systems and records

Element:

1. Assess options

Performance Criteria:

1.1 Identify statutory requirements from assessment of terms of reference, and client objectives and obligations

1.2 Review and analyse client activities and procedures to establish familiarity with systems and guide selection of appropriate audit methodologies

1.3 Develop financial audit methodologies to identify significant features of audit and establish criteria for conducting audit in accordance with professional auditing standards

Element:

2. Identify information sources

Performance Criteria:

2.1 Identify audit financial data sources from evaluation of organisation’s information systems

2.2 Create audit lines of enquiry to support audit objectives and reduce audit risk to acceptable level

Element:

3. Determine audit strategies

Performance Criteria:

3.1 Establish client financial business characteristics from analysis of general economy, industry and client’s provided information

3.2 Assess client’s inherent financial risk through value chain risk analysis

3.3 Identify internal control procedures for financial transactions through discussion with client and established professional standards

3.4 Ensure audit methodologies use established sampling and selection techniques in manner consistent with internal control procedures and substantive testing

Element:

4. Schedule resources and timelines and monitor progress

Performance Criteria:

4.1 Establish timeframes and allocate personnel to functions and tasks based on audit lines of enquiry

4.2 Review resource use regularly, and develop and monitor intermittent reports with resource allocation and timeframes adjusted through discussion and agreement with client and in accordance with professional accounting standards

Element:

5. Review data and verify statements

Performance Criteria:

5.1 Identify significant strengths and weaknesses in controls and rank in accordance to audit objectives

5.2 Obtain and evaluate evidence on financial systems and controls under review using established testing procedures and in accordance with criteria identified in audit methodology

5.3 Test management assertions to achieve audit objectives

5.4 Gather sufficient appropriate audit evidence as basis for expert opinion

5.5 Verify financial statements as materially misstated or correct

Element:

6. Determine reporting formats

Performance Criteria:

6.1 Identify and document financial operational functions, services and systems in accordance with standard formats

6.2 Ensure format is consistent with documentation requirements of auditor and professional auditing standards

6.3 Formulate and provide financial audit opinions, including recommendations, to client in established and acceptable format

Learning Outcomes



Details of Learning Activities

Primarily you will be learning face to face, with an online course site (Canvas) used to disseminate materials, including videos, notes and activities and to provide access to on-line assessments & assessment submission points. Students will be required to read the course text before coming to class. The class is structured so that the reading is completed out of class.

In-class work will account for 32 of the total nominal hours of 40 hours for the course and in-class work will include a range of self-paced and collaborative learning activities such as class discussion, completion and review of set exercises, a team presentation on one chapter of the text book, work on a simulated/real workplace environment assignment based on an organisation with a presentation and audit report to be presented.  

The hours of self-directed/self-paced learning by full-time students (8 of the 40 total nominal hours) will be taken up with reading, research and the completion of the assignment outside scheduled class time. Please note that the format of the class will be a two-hour class per week over 16 weeks.

It is expected that all students participate and contribute in all scheduled learning activities.


Teaching Schedule

The nominal hours associated with this course are a guide only and represent the total teaching time and student effort required to successfully complete the course.  This may include not only scheduled classes but also the amount of effort required to undertake, evaluate and complete all assessment requirements, including any non-classroom activities.  Please refer to Learning Activities with reference to instructions regarding work to be completed outside teaching hours.

Induction Session for all students 

Prior to training commencement a program level induction session will be conducted that comprises the following:

• Program overview and requirements
• MyRMIT/Canvas
• Overview of assessment requirements
• Pre-Training Review including:
o Recognition of Prior Learning and Credit Transfers
o Assessment of current skills and knowledge
• Competency/Grading Criteria
• Plagiarism
• Appeals
• Extensions
• Feedback
• Privacy
• Submission requirements
• Resubmission policy
• Where to get support 
• Student responsibilities.

TEACHING SCHEDULE   

 

Weekly schedule 

Week

Topics

Class Work and Assessments

Elements and Performance Criteria

1

Introduction to the Course including:

  • Course requirements
  • Course support documents
  • Course Canvas access
  • Accuracy of enrolment
  • Assessment requirements
  • Reminder re Plagiarism
  • Reminder re Appeals
  • Extensions/Resubmissions
  • Feedback in this course
  • Reminder re submission requirements
  • Getting help

Chapter 1 - Introduction and overview of Audit and Assurance

Discuss Course and all Assessment requirements

Topics to be discussed in the chapter:

  • describe an assurance engagement
  • discriminate between different types of assurance services
  • discriminate between different levels of assurance
  • categorise different audit opinions
  • discriminate between the different role of the preparer and the auditor, and discuss the different firms that provide assurance services
  • justify the demand for audit and assurance services
  • compare the different regulators and regulations surrounding the assurance process
  • categorise the audit expectation gap.

Review Questions
1.23 to 1.36, Research question

Globalisation - introduction and activity

 

2

Chapter 2 - Ethics, legal liability and client acceptance

Topics to be discussed in the chapter:

  • explain the fundamental principles of professional ethics
  • describe and assess auditor independence
  • describe the relationship between an auditor and key groups they have a professional link with during the audit engagement
  • illustrate the auditor’s legal liability to their client, contributory negligence and the extent to which an auditor is liable to third parties
  • categorise the factors to consider in the client acceptance or continuance decision.

Review Questions
2.23 to 2.34, 2.37, Research question

 

3

 

Chapter 3 - Risk Assessment 1

Topics to be discussed in the chapter:

  • explain the different phases of an audit
  • relate the process used in gaining an understanding of the client
  • evaluate fraud risk
  • explain the going concern assumption
  • appraise corporate governance structures
  • evaluate how a client’s information technology (IT) can affect risk
  • demonstrate how client closing procedures can affect reported results.

Review Questions
3.23 to 3.38, Research question

 

4

Chapter 4 - Risk Assessment 2

Topics to be discussed in the chapter:

  • evaluate audit risk
  • explain the concept of materiality
  • describe how an auditor determines their audit strategy
  • describe how clients measure performance
  • describe how an auditor uses analytical procedures when assessing risk.

Review Questions
4.23 to 4.35, Research question

 

5

Chapter 5 - Audit Evidence

Release of online Quiz 1 (Topics 1, 2, 3 and 4 to be done outside class) 

Topics to be discussed in the chapter:

  • explain the audit assertions
  • explain and appraise different types of audit evidence and assess sufficient appropriate audit evidence
  • describe the persuasiveness of audit evidence
  • explain the issues to consider when using the work of an expert
  • describe the issues to consider when using the work of another auditor
  • explain the evidence gathering procedures most     often used by auditors.

Review Questions
5.23 to 5.37, Research question

 

6

Chapter 6 - Gaining an understanding of the client’s system of internal controls

Topics to be discussed in the chapter:

  • describe internal control
  • explain the seven generally accepted objectives of internal control activities
  • discriminate between the elements of internal control at the entity level
  • describe the elements of internal control at the transaction level
  • explain the different techniques used to document internal controls
  • explain the importance of identifying strengths and weaknesses in a system of internal controls
  • describe how to communicate internal control strengths and weaknesses to those charged with governance.

Review Questions
6.23 to 6.32, Research question

 

7

Chapter 7 - Sampling and overview of the risk response phase of an audit

 

 

Release of Assessment 1 Part A

Topics to be discussed in the chapter:

  • explain how audit sampling is used in an audit
  • recognise the difference between sampling and non-sampling risk
  • discriminate between statistical and non-statistical sampling
  • describe sampling methods
  • describe the factors that influence the sample size when testing controls
  • explain the factors that influence the sample size      when conducting substantive testing
  • explain how to evaluate the results of tests conducted on a sample
  • discriminate the difference between tests of controls and substantive tests
  • explain the factors that affect the nature, timing and extent of audit testing
  • explain how auditors arrive at a conclusion based upon the evidence gathered
  • illustrate how auditors document the details of evidence gathered in working papers.

Review Questions
7.23 to 7.32, Research question

 

8

Case study (Assessment 1 Part B) made available on Canvas - to discuss in detail with class

Release of online Quiz 2 (Topics 5 to 7, to be done outside class)

Students allocated to team for case study audit committee report and presentation

 

9

Chapter 8 - Execution of the audit - testing of controls

Topics to be discussed in the chapter:

  • explain the different types of controls
  • compare the different techniques for testing controls
  • describe how to select and design tests of controls
  • compare and contrast the results of testing of controls
  • describe how to document tests of controls.

Review Questions
8.23 to 8.30, 8.36 and 8.37, Research Question

 

Submission of Assessment 1 Part A

  

10

Discussion of case study - relevance to chapter(s) – Pitstop 1

 

Chapter 9 - Execution of the audit - performing substantive procedures

Topics to be discussed in the chapter:

  • describe substantive audit procedures
  • explain the link between the audit risk model and the nature, timing and extent of substantive procedures
  • produce examples of different substantive audit procedures
  • discriminate between the various levels of audit evidence obtained when performing substantive procedures
  • explain the documentation of the conclusions reached as a result of performing substantive procedures.

Review Questions
9.23 to 9.32

 

11

Chapter 10 - Substantive testing and balance sheet accounts

Discussion of case study - relevance to chapter(s) – Pitstop 2

 

Topics to be discussed in the chapter:

  • explain the relationship between the risk of   material misstatement for a significant account and   the extent and timing of substantive procedures
  • design and explain how to execute substantive   procedures to address audit risk related to cash
  • design and explain how to execute substantive   procedures to address audit risk related to trade   receivables
  • design and explain how to execute substantive   procedures to address audit risk related to   inventory
  • design and explain how to execute substantive   procedures to address audit risk related to   property, plant and equipment
  • design and explain how to execute substantive   procedures to address audit risk related to   payables
  • explain how substantive testing is used for other   balance sheet accounts
  • explain how to assess the results of substantive   procedures to determine whether additional   substantive tests are necessary.

Review Questions
10.24 to 10.29, 10.33 to 10.35

 

12

Chapter 11 - Substantive testing and income statement accounts

Discussion of case study - relevance to chapter(s) - Pitstop 3

Course experience survey

Topics to be covered in the chapter:

  • explain the relationship between the overall risk   assessment for a significant account and the extent   and timing of substantive procedures, and the   differences between auditing income statement   and balance sheet accounts
  • design and explain how to execute substantive   procedures to address audit risk related to revenue
  • design and explain how to execute substantive   procedures to address audit risk related to cost of   sales and other significant expenses
  • explain how to assess the results of the substantive   procedures to determine whether additional   substantive tests are necessary.

Review Questions
11.23 to 11.27 

 

13

Chapter 12 - Completing and reporting on the audit

Discussion of case study - relevance to chapter(s) – Pitstop 4

 

Release of Assessment 1 Part C

Topics to be discussed:

  • explain the procedures performed as part of the   engagement wrap-up, including gathering and   evaluating audit evidence
  • explain the considerations when assessing the going   concern assumption used in the preparation of the   financial report
  • assess the two types of (material) subsequent   events to determine what effect they have on the   financial report (if any)
  • evaluate misstatements and explain the difference   between quantitative and qualitative considerations   when evaluating misstatements
  • evaluate conclusions obtained during the   performance of the audit and explain how these   conclusions link to the overall opinion formed   on the financial report
  • explain the components of an audit report
  • discriminate between the types of modifications   to an audit report
  • explain why Corporations Act breaches are   important to understand
  • explain what reporting is required to   management   and those charged with governance.

Review Questions
12.23 to 12.29 

 

14

 Discussion of case study - relevance to chapter(s) – Pitstop 5

Discussion of case study - relevance to chapter(s) – Pitstop 5

Submission of Assessment 1 Part B of Case study

 

15

Presentation and submission of Audit Report to Committee

Case Study Audit Report Presentation and 10-minute Presentation by teams

Submission of Part C of Case study

All the elements from 1 to 6

16

Re-submissions/Re-submission

Re-submissions for case study

 

 

Please note:

  1. Mid semester break will be from 9 to 15 April 2020. Classes will resume from 16/04/2020.
  2. The teaching schedule is subject to change in exceptional circumstances.  Notification of changes can be made directly in class by the teacher or emailed to each student.


Learning Resources

Prescribed Texts


References

Auditing: A Practical Approach, 3rd Edition Robyn Moroney, Fiona Campbell, Jane Hamilton

9780730326496

Other Resources


Overview of Assessment

Performance Evidence

Evidence of the ability to:

  • assess client risk and determine financial audit strategy and methodology
  • schedule resources and timelines, and monitor progress
  • review data, verify financial statements and determine reporting formats that comply with:
  • organisational financial internal control policy and procedures
  • relevant legislative requirements and professional standards.

 

Note: If a specific volume or frequency is not stated, then evidence must be provided at least once.

Knowledge Evidence

To complete the unit requirements safely and effectively, the individual must:

  • identify and explain the key features of current financial legislation and statutory requirements relating to internal control, taxable transactions and reporting requirements
  • identify and explain the key features of current, relevant professional accounting standards
  • outline the duties and responsibilities of auditors
  • discuss professional standards and ethical considerations for management and handling of files and records
  • identify and explain the key principles of:
  • auditing
  • internal control
  • compare and contrast testing procedures and methods of enquiry.

 

Assessment Conditions

Assessment must be conducted in a safe environment where evidence gathered demonstrates consistent performance of typical activities experienced in the accounting field of work and include access to:

  • common office equipment, technology, software and consumables
  • an integrated financial software system and data.

 

Assessors must satisfy NVR/AQTF assessor requirements.

You are advised that you are likely to be asked to personally demonstrate your assessment work to your teacher to ensure that the relevant competency standards are being met.

Feedback

Feedback will be provided throughout the semester in class and/or online discussions.  You are encouraged to ask and answer questions during class time and online sessions so that you can obtain feedback on your understanding of the concepts and issues being discussed. Finally, you can email or arrange an appointment with your teacher to gain more feedback on your progress.

You should take note of all feedback received and use this information to improve your learning outcomes and final performance in the course. 


Assessment Tasks

Assessment Task/Titles:  

There will be one major assessment task which is divided into three (3) parts:

Case Study – Workplace Audit Simulation (Due date: Week 9, 14 and 15 respectively):

Part A: This assessment will assess materials covered from week 1 to week 9 i.e. overview of audit and assurance, ethics, risk assessment, audit evidence, understanding the client’s system of internal controls, sampling and testing of controls. These will be open ended questions asking students to demonstrate their understanding through defining, discussing or providing examples to key concepts within auditing. Each student will be preparing answers to these specified questions.

Part B:  All students will be divided into teams of 2. You will be given a MYOB file for a company called “Bookkeeping Makes Cents Pty. Ltd.” Each team will be required to conduct a detailed audit of the company. Each team will prepare answers to specified questions regarding the simulated audit and submit this as part of a comprehensive and detailed report to the audit committee of “Bookkeeping Makes Cents Pty. Ltd.” indicating the audit observations.

Part C: Each team will also present a ten-minute presentation in-class based around this report but as a “snap-shot” only.

Please note that with regard to the case study, each group will be required to demonstrate to their teacher their progress throughout the semester, which are referred to as 'pit-stops'. These five pit-stops have been scheduled in weeks 10-14.  In these pit-stops, each student as part of a team is required to attend, demonstrate and evidence what progress and work on the case study has been completed to that point. 

This assessment is competency-based. It must be satisfactorily completed in order for competency to be achieved for this unit.

You can be asked to reproduce any assessment piece in front of your teacher.


Assessment Matrix

The assessment matrix that maps all the assessment is available on CANVAS under Assignments.

All assessments will utilise a competency-based model and will be deemed as either Satisfactory or Not Yet Satisfactory. 

Other Information

Submission Requirements

 

 You should: 

·   Ensure that you submit assessments on or before the due date. 

·   Always retain a copy of your assessment tasks. (hard copy and soft copy)

·   When you submit work for assessment at RMIT University you need to use a cover sheet that includes a declaration and statement of authorship. You must complete, sign and submit a cover sheet with all work you submit for assessment, whether individual or group work.  On the cover sheet you declare that the work you are presenting for assessment is your own work.  An assignment cover sheet for submission of each assessment task is available on blackboard.

·   Each page of your assessment should include footer with your name, student number, the title of the assessment, unit code and title and page numbers.   For example, Julie Macpherson, 324567, Task 2, OHS2345C Ensure safe workplace, Page 1 of 10.

 

Late Submission Procedures

You are required to submit assessment items and/or ensure performance based assessment is completed by the due dates.

If you are prevented from submitting an assessment item on time, by circumstances outside your control, you may apply in advance to your teacher for an extension to the due date of up to seven calendar days.  

More Information:

https://www.rmit.edu.au/students/student-essentials/assessment-and-exams/assessment/extensions-of-time-for-submission-of-assessable-work

 

Where an extension of greater than seven days is needed, you must apply for special consideration.  Applications for special consideration must be submitted no later than two working days after the assessment task deadline or scheduled examination. 

More Information: 

https://www.rmit.edu.au/students/student-essentials/assessment-and-exams/assessment/special-consideration

 

Resubmissions (VET Programs):

If you are found to be unsuccessful in a Course Assessment Task you will be allowed one resubmission only.  Your teacher will provide feedback regarding what you need to do to improve and will set a new deadline for the resubmission.  The highest result you will receive if your resubmission is successful is “CA”.

If you are still not meeting the assessment requirements you must apply to your Program Manager in writing outlining the steps you will take to demonstrate competence in your course. Your submission will be considered by the Program Team and you will be advised of the outcome as soon as possible.

 

Adjustments to Assessment

In certain circumstances students may be eligible for an assessment adjustment. For more information about the circumstances under which the assessment arrangements might be granted please access the following website: 

More Information: 

https://www.rmit.edu.au/students/student-essentials/assessment-and-exams/assessment/adjustments-to-assessment

 

Marking Guide (Competency): 

You must demonstrate that you have all the required skills/knowledge/elements in the unit of competency you are studying. 

You will receive feedback on each assessment task that will inform you about your progress and how well you are performing. You will achieve one of the following results: 

Final results table:

CA    Competency Achieved

NYC  Not Yet Competent

DNS  Did Not Submit Assessment

Course Overview: Access Course Overview