Course Name: XACRE 3
Course Title: Accounting Review 3 Instructors: Tipay
Required Text: Applied Auditing, Latest Edition, Cabrera, Ma. Elenita, B.
Course Description: This course pertains to auditing theory and practice combined. It integrates audit theory and concepts with auditing methodology and practice. It covers detailed approaches to problems and situations normally encountered in the independent examination of assets, liabilities, owners’ equity, and revenue and expenses. It deals specifically with the application of auditing standards,
techniques, and procedures; internal control evaluation;
preparation of audit working papers; audit adjustments; and audit reports pertaining to a medium-sized manufacturing or trading concern.
Topic Outline: Estimated No of Hours
1. Fundamentals of Auditing and Assurance Services 1.50
Introduction to Assurance Engagements
Assurance Engagements
Elements of an Assurance Engagement
High-Level Assurance Engagement
Ethical Requirements
Accepting the Engagement
Agreeing the Terms of the Engagement
Quality Control
Planning and Conducting the Engagement
Evidence
Documentation
Subsequent Event
Using the Work of an Expert
Reporting
2. Introduction to Auditing 3.50
Overview of Auditing
Philosophy of an Audit
Auditing Defined
Objectives of Auditing
How Information Risk May be Reduced
Philippine Standards on Auditing (PSAs)
Types of Audit
Types of Auditors
Auditing and Accounting Distinguished
General Types of Audit
External Independent
Financial Statements Audit
Internal Audit
Government Auditing
Special Purpose Audit:
Other Audits or Limited Assurance Services
3. The Professional Practice of Accounting 3.50
Public Accounting Profession
Organizations that Affect Public Accounting
Regulation of the Public Accounting Practice – The
Revised Accountancy Law
Elements of Quality Control (PSA 220)
Services of a CPA in Public Practice
Core Competencies Required in the Public
Accounting Profession
Emerging Assurance and
Consultancy Services of CPAs
Management of a Public Accounting Practice
Establishment and Operations of a Public Accounting Firm
Acceptance and Retention of Audit Clients
Management’s Responsibility for Financial Reporting
and the Role of the Audit Committee
Auditing in a Globalized Environment
4. The CPA’s Professional Responsibilities 3.50
Philippine Standards on Auditing (ISAs-Based)
Introduction and Status of Philippine Standards on Auditing (PSAs)
Framework of Philippine Standards on Auditing (PSA 120)
Code of Ethics for Professional Accountants in
the Philippines (effective January 1, 2004)
Auditor’s Legal Liability
5. Evidence Accumulation and Evaluation – Final Audit Phase 6.00
Substantive Tests of Cash
Substantive Tests of Receivables and Sales
Substantive Tests of Inventories and Cost of Goods Sold
Substantive Tests of Inventories and Cost of Goods Sold Balances
Substantive Tests of Investments
Substantive Tests of Property and Equipment
Substantive Tests of Intangible Assets
Substantive Tests of Prepaid Expenses and Deferred Charges
Substantive Audit Procedures
6. The Framework of Financial Statements Audit 3.00
Audit Planning, Supervision and Monitoring
Scope and Purposes of Audit Planning (PSA 300)
Risk-based Audit Approach- Part I
A Risk-based Audit Approach – Part II
Assessing Inherent Risk and Control Risk at the Assertion Level
7. Gathering and Evaluating Audit Evidence (PSA 500) 3.00
Audit Procedures (PSA 505, 510) (PAPS 1001)
Audit Evidence (PSA 500, 501)
General Categories of Evidential Matter
Documentation: Audit Working Papers (PSA 230)
8. Study and Evaluation of Internal Control 3.00
Basic Concepts and Elements of Internal Control (PSA 400)
Illustration of a Typical Internal Control System
Consideration of Internal Control in a Financial Statements Audit (PSA 400)
How Adequacy or Inadequacy of Internal Control affects Audit Procedures
Communication of Performance, Improvements, and
Observations in Internal Control to Management
9. Audit Sampling (PSA 530) 3.00
Basic Audit Sampling Concepts
Audit Sampling for Tests of Controls
Audit Sampling
10. Audit Program Applications 4.00
Test of Controls
Sales and Collections Process
Purchases and Disbursements Process
Payroll Process
Production Process
Inventory Warehousing Process
Substantive Tests of Transactions
Sales Transactions
Cash Receipts Transactions
Purchases Transactions
Cash Disbursements Transactions
Production Transactions
Inventory Warehousing Transactions
Non-routine Transactions
Substantive Tests of Balances
Auditing Fair Value Measurements and Disclosures (PSA 545)
Using the Work of Others
Communication of Audit Matters with
Those Charged with Governance (PSA 260)
Audit Considerations
Relating to Entities Using Service Organizations (PSA 402)
11. Completing the Audit / Post-Audit Responsibilities 4.00
Completing the Audit
Related Party Transactions (PSA 850) (SFAS / IAS 24)
Subsequent Events Review (PSA 560) (SFAS / IAS 10)
Letters of Inquiry / Review for Contingent Liabilities
Evaluation of Going Concern Assumption (PSA 570)
Management Representations (PSA 580
Analytical Procedures (PSA 520)
Evaluating Findings, Formulating an Opinion and
Drafting the Audit Report
Post Audit Responsibilities
Subsequent Discovery of Facts Existing at Report Date
Consideration of Omitted Procedures after the Report Date
12. Reports on Audited Financial Statements 4.00
The Auditor’s Report on Financial Statements (PSA 700)
The Unqualified Auditor’s Report
Basic Elements of the Unqualified Audit Report
Modified Auditor’s Report
Modified Auditor’s Report
Circumstances That May Result in Other Than an
Unqualified Opinion
Comparative Financial Statements in
Audit Reports (PSA 710)
Other Information in Documents Containing
Audited Financial Statements (PSA 720
13. Other Assurance and Non-assurance Services 3.00
Procedures and Reports on Special Purpose Audit
Engagements (PSA 800)
Audit of a Component of Financial Statements
Reports on Compliance of Contractual Agreements
Total Sessions Express As Contact Hours 54
Recap
Identification of CPC Topics Covered in this Course Estimated Contact Hours
Accounting 54
Marketing 1
Finance 3
Management 3
Organizational Behavior 1
Human Resource Management 1
Operations Management 1
Legal Environment of Business 2
Economics 1
Ethics 1
Information System 1
Quantitative Methods/ Statistics 1
International/ Global Dimensions of Business 3
Integrative Experience 6
Total Estimated Contact Hours 79
