Syllabus for Accounting 4313; Internal Auditing; Spring 2013

INSTRUCTOR: Dr. Genevieve Scalan TEL: 512-245-3305OFFICE: McCoy Hall Room 440 CELL: 210-842-3193 (preferred)OFFICE HOURS: MW 9:00AM-11:00AM

W 5:30PM – 6:30PME-MAIL: gs28@txstate.edu

Or by Appt/Drop inClass/Section Days Times Room

Section 251 M-W 12:30 pm – 1:50pm McCoy 113Section 252 M-W 2:00 pm - 3:20pm McCoy 125

COURSE DESCRIPTION: 4313 Internal Audit and Controls --- A study of the theory and practices relating to internal auditing. The course emphasizes the procedures used to evaluate and improve the effectiveness of risk management and control processes, including prevention and detection of fraud.

COURSE MATERIALS:Required Text:

Internal Auditing: Assurance & Consulting Services, 2nd Edition, by Reding, Sobel, Anderson, Head, Ramamoorti, Salamasick, ISBN 978-0-89413-643-6 (NOTE: If purchasing a used text, make sure that the text includes the “Supplement” CD, which should be on the inside front cover)BRING THE TEXTBOOK TO EACH CLASS

Recommended:Access to Gleim Certified Internal Auditor Review, McCoy 3rd Floor Computer Lab

Slides, homework templates and other course materials at course TRACS Site

LEARNING GOALS:The objectives of this course are to provide students with:

1. An understanding of corporate governance, risk management, and internal control2. An understanding of the roles and practice of internal auditing3. An opportunity to practice the application of internal controls and internal auditing via cases

This course will help the department and college in meeting the goals of preparing graduates to: Conceptualize a complex issue into a coherent, persuasive written statement or oral

presentation; Acquire and use analytical tools and skills for evaluating information, solving problems, and

making sound decisions; Recognize and apply general concepts of internal auditing

SKILLS YOU ARE EXPECTED TO BRING INTO THIS COURSE: Persuasive writing Understanding of financial and managerial accounting Research Logical reasoning

PREREQUISITES: ACC 3314, Intermediate Accounting II, and 3385, Accounting Systems, with a minimum grade of C. Completion of COMM 1310, Fundamentals of Human Communication, before is recommended, although not required.

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COURSE POLICIES:

INSTRUCTIONAL METHODOLOGY: This class will consist of lectures, classroom discussion, quizzes, written in-class exercises, written homework assignments, examinations, and case exercises. The objective is to encourage class participation to clarify and elaborate on items of special relevance, difficulty, or class interest. You are encouraged to ask questions and to request explanation of points in more detail, if you are confused or uncertain about items discussed or if concepts in the reading material are unclear. The instructor will assume that you have read assigned chapters before lectures begin. Reading the chapters before class is essential to your success in this class and to obtaining good grades on quizzes. The ACC4313 Fall2012 Class Schedule (separate document) shows the approximate “discussion/lecture” dates for each chapter, and other assignments.

ATTENDANCE: Attendance at all classes is extremely important to success in this class. Points to be earned during class for quizzes, in-class exercises, exams, and written homework assignments cannot be made up unless the instructor has written documentation, in advance, that another Texas State professor, coach, etc. requires you to be elsewhere for a school-sponsored activity or due to illness documented by a physician or other appropriate medical professional.

If you decide to withdraw from this course, please comply with Texas State withdrawal policies. It is your responsibility to perform this function. The instructor will not withdraw any student from the course. Failure to withdraw and not complete the course will result in a grade of F.

COURSE REQUIREMENTS:

Assignments:Reading and other assignments, and the respective due dates, are listed in the ACC4313 Fall2012 Class Schedule. Reading assignments include reading the text chapter and any appendices to that chapter. Where reading assignments listed in the ACC4313 Fall2012 Class Schedule include non-text material, the instructor has posted these items to the Resources section of the Course TRACS Site. Assignments and due dates are preliminary and are subject to change as the semester progresses. The instructor may chose to notify students of changes either verbally during class or via emails, at the instructor’s option. Each student is responsible to keep up with changes in assignments or due dates, regardless of how the instructor may choose to announce those changes.

Quizzes and In-class Exercises:To encourage reading chapters before lectures, the instructor will give a quiz on each chapter. Each quiz will consist of five multiple-choice and true-false questions, with each quiz worth 5 points. There are also in-class exercises associated with Chapters 14 and 15. There will be no opportunity to make up missed quizzes or in-class exercises except as noted in attendance policy.

Written Homework Assignments:The instructor will use selected Discussion Questions at the end of each chapter and other exercises to provide students with the opportunity to apply concepts discussed in the text and in class. Homework assignment templates are posted as Resources on the course TRACS sight. Students must use the posted documents to complete the assignments using Microsoft Word (handwritten assignments will not be accepted) and bring the assignment with them to the class at which the assignment is due (see ACC4313 Fall2012 Class Schedule). The class will discuss the assignment and submit it at the end of the discussion. The student must be present in class in order to submit written homework assignments except as provided in Attendance and as follows: If you know you are going to miss class for a reason other than school sponsored activity or documented illness, make arrangements to turn in a hard copy of your homework before it is due. Because we review the homework in class, no late homework is accepted for any reason other than documented illness or school sponsored activities. If you plan to turn in homework early, I must be certain it was turned in prior to the class discussion, this means do not slip it under my office door after I have left to teach class because I will not know when you turned it in. Emailed homework is never accepted in any circumstance.

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The instructor will base grading of Written Homework Assignments as follows: Approximately 50% on content of response demonstrating understanding and application of

concepts Approximately 50% on writing skills (grammatical correctness)

Examinations:The ACC4313 Fall2012 Class Schedule includes the dates of exams. These dates will not change. There will be three exams, each consisting of multiple-choice, true-false, and short-answer questions. The final exam will be a comprehensive examination consisting of multiple-choice and true-false questions (no short-answer questions).

During exams, you cannot wear anything on your head that obstructs the professor’s view of your face. You cannot use cell phones, I-pods, or any other electronic equipment. Calculators are not necessary for exams in this course. You cannot leave and re-enter the classroom after the exam begins.

There will be no opportunity to make up missed exams except as noted in attendance policy. For conflicts that result from school related activities (see Attendance) or medical emergencies, the instructor may offer an opportunity to take the examination at another time convenient to the student and instructor.

Case Presentations and Reports:Students will work individually or in teams of two, as assigned by the instructor, to complete one case during the semester. Students will indicate their cases preferences during the first class meeting, with the instructor determining the case and team assignments. See Case Study Options and Assignments, last page of this syllabus, for a list of cases and the respective oral and written presentation due dates for each case. Students should come to the first class prepared to indicate their cases preferences. The instructor will assign cases, if students are not prepared to make their selection at the first class.

Note: Failure to complete an oral case presentation or submit a written case report will result in an “F” or an “incomplete” for the course, at the instructor’s discretion. Note: Where students are to work in a team of two, each student should participate equally in both the classroom presentation and in preparation of the paper. The instructor will penalize failure to work as a team.

Oral presentations --- Each student or two-student team will make a 10 to 15 minute presentation of their case to the class and handle questions from the class. The presentation should include at least five PowerPoint slides. Students should email slides to the instructor by 9:00 a.m. on the day of their presentation. The classroom presentation should be prepared and presented as if it were a presentation to the Audit Committee or Senior Management.

The instructor and the class will grade the presentation based on the students’ presentation skills, slide effectiveness, organization, critical thinking, and ability to respond to questions from the class and instructor (see 4313 Oral Case Feedback posted to TRACS.) The grade for the presentation will be 25 possible points from the instructor and 25 possible points from the class average. The instructor may deduct from the combined instructor/class grade for presentations that are excessively short or long. (NOTE: Students receive up to 10 points and opportunity for additional points for providing “quality” feedback1 to their classmates on their presentations.)

Written papers --- Students must prepare written case papers using Microsoft Word. Although the instructor is more interested in content and case coverage, students should target the case papers at 4 to 6 pages of text, plus any necessary exhibits. Students should format the papers similar to:

Line spacing of double Arial or similar 10 or 12 -point font 1-inch margins (left, right, top, and bottom)

1 Feedback is considered “quality” based on number of feedback forms completed and the statistical variance of the feedback. Hence, attending all presentations and providing feedback with a marked distinction between high and low rated presentations will result in maximum extra credit; X-credit = (# of feedbacks/presentations X 5) + (Student StdDev/Class StdDev X 5).

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All charts, graphs, tables, pictures, etc. should be included in an appendix within the Word document. These attachments do not count as part of the 4 to 6 pages of text.

The 4 to 6 pages of text should be students’ original work; while the appendices may be original product or copies of materials from various sources to support analyses and conclusions provided in the narrative. Students should use standard citing and footnoting methods to reference any sources, other than the textbook, including websites.

The instructor will grade case papers based on the following criteria, as described further in the ACC 4313 Written Case Rubric in TRACS:

Coverage of the case subject matter Quality and thoroughness of analysis and presentation Writing skills Assignment Rules

Students should use the spelling and grammar check capabilities of Microsoft Word. In addition, students should follow the guidelines provided in ACC 4313 Writing Tips in TRACS. Following these guidelines will help students to maximize their writing skills grade.

Students should submit case papers to the instructor electronically via email, as a single email attachment (i.e., embed exhibits and other attachments in the Word document). The paper is due to the instructor by 5:00 p.m. on the due date shown in Case Study Options and Assignments. (Papers submitted late will be penalized as provided in the Written Case Rubric. Papers more than 5 days late will receive additional penalty as determined by the instructor.)

Team Case Audit Project:

Students will work in teams of 4 to 6 students determined by the instructor to perform a simulated audit case. Each team will be responsible for planning and performing the audit, preparing limited working papers, writing observations, and discussing their case in class. In addition to the instructor’s grading of the case, team members will grade and critique the other team members contribution and participation to the project. The team will receive a common grade for the oval project; however, each team member’s grade will be adjusted from the common grade based on the grade/critique of the other team members.

Grade Evaluation:

Your semester grade will be determined using the following factors and points:

  Total PointsQuizzes (15 x 5 points per quiz) 75In-class Exercises 30Written Homework Assignments 185Three exams [(30 MCQ & T/F 1 point each + 20 points short

answer) X 3 exams)] 150Case presentations and reports (individual or in pairs) 150Peer Evals of Case Presentations 10Team Case - Audit Project (teams of 4 – 6 students) 50Comprehensive Final Examination (100 questions at 1

points per question) 100Total Base Points 750

There is a syllabus quiz worth 5 points, 7 additional homework points and there will be more than ten peer evaluations which create some surplus points not in the total above. There will be no extra credit other than where possible from successful completion of all quizzes, all homework, and providing more than 10 “quality” feedback to students’ presentations. Absolutely no course work will be accepted for credit after the last day of class.

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Determination of Letter Grade:

=> 90% (675 points) = A => 80% (600) = B => 70% (525) = C => 60% (450) = D < 60% (450) = F

Depending on the distribution of grade percentages at the end of the semester, the instructor may determine to “curve” the letter grading to cut-off at slightly lower percentages for each letter grade. However, this decision is at the instructor’s discretion. Regardless of any decision to curve, no student will pass the course with less than 60% of the total points possible.

Grades determined at the end of the semester will not be changed for any reason other than a clear-cut mathematical or grading error.

Faculty and students must retain a record of all graded coursework (projects, quizzes, exams, etc.) for at least one semester. These may be necessary as evidence to resolve any disputes in grades assigned.

Appeals for course grades assigned will be considered only for two years beyond one semester after completion of the course.

An “I” is only assigned when a student fails to complete a vital portion of the course due to conditions beyond their control, such as a medical or other emergency.

Other: TRACS will be used primarily for posting documents, announcements, and grades, and

obtaining templates for completing homework assignments. Instructor will post PowerPoint slides to TRACS, as a Resource, 24 hours before each class. A syllabus is an organizational plan, and as such, it may be necessary to make changes.

Each student is responsible for finding out about any changes announced in class. E-mail messages: In order to receive a response, your e-mail messages must include your

first name and last name. Please include a meaningful subject in the subject line. Attachments should be kept under 5 megabytes. Attachments exceeding 5 megabytes should be zipped and attached, or split and sent as attachments to support emails.

CLASSROOM CIVILITY:

Disruptive behavior in the classroom is prohibited in Section 2.02 of Texas State’s Code of Student Conduct and includes behavior that substantially or repeatedly interferes with the conduct, instruction, and education of a class. The complete Conduct of Classes policy is available at http://www.provost.txstate.edu/pps/policy-and-procedure-statements/4-teaching/pps4-02.html.

Any successful learning experience requires mutual respect on behalf of the student and the instructor. Students are full partners in fostering a classroom environment that is conducive to learning. In order to ensure that all students have the opportunity to gain from time spent in class,students are prohibited from engaging in any form of behavior that detracts from the learning experience of other students. Disruptive and inappropriate behavior includes, but is not limited to the following:

Receiving or initiating cell phone, text messages, or pager calls during class (Students should turn off cell phones before class starts. If your cell phone rings during an exam, you will receive a 5-point deduction on your exam score.)

Leaving class to take a cell phone call, except in an extreme emergency (Please let the instructor know in advance if you have reason to expect an emergency call.)

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Coming into class late or leaving class early, especially when such behavior occurs frequently (If you know you will have to leave a class early, inform the instructor before class, sit near the door, and leave at a minimally interruptive time.)

Carrying on personal conversations with other students after the instructor begins class (prolonged chattering)

Doing assignments for other classes, reading newspapers or other text, or sleeping during class

Demanding special treatment, making offensive remarks, dominating discussions, shuffling backpacks or notebooks, and overt inattentiveness

Note: Absolutely no food is allowed in McCoy classrooms. Any drinks brought into the classroom must be in closed containers (e.g., bottles with screw top caps or cups with lids and straws; no cans or open cups).

Since the instructor has primary responsibility for control over classroom behavior and academic integrity, inappropriate behavior in the classroom may result in a request for the offending student to leave class.

UNIVERSITY/COLLEGE POLICIES:A. DROP: Dropping means that the student will remain enrolled in at least one hour in the current

semester. A "W" will be automatically assigned if the drop procedure is completed on or before 5:00 p.m. on October 25, 2012. After this deadline the student will be unable to drop the course and will receive the grade (A, B, C, D, F, or I) earned in the class. It is suggested that students consult the instructor prior to dropping from the class.

WITHDRAWAL: Withdrawal means that the student is going to zero hours for the current semester. A "W" will be automatically assigned if the withdrawal procedure is completed on or before 5:00 p.m. on October 25, 2012. After this deadline, the student may withdraw on or before 5:00 p.m. on November 27, 2012. If the student is passing the class on the official date of withdrawal, a "W" grade will be assigned. If the student is failing the class on the date of withdrawal, an "F" grade will be assigned.

B. ACADEMIC HONESTY: Submission of any work for a grade for which unauthorized help has been received is termed academic dishonesty and will be grounds for a failing grade in the course. "Unauthorized" is a term used here to designate stealing, copying (with or without permission), collaboration with other individuals, or sharing programming code outside of sanctioned group activities. Students are strongly encouraged to refer to the Texas State student handbook for policies related to academic dishonesty. These policies may be found at http://www.dos.txstate.edu/handbook/rules/honorcode.html. This instructor views any such act as a clear violation of ethical standards and will take appropriate disciplinary and punitive action.

C. HONOR CODE: All students are required to abide by the Texas State University Honor Code. The pledge for students states:

Students at our University recognize that, to insure honest conduct, more is needed than an expectation of academic honesty, and we therefore adopt the practice of affixing the following pledge of honesty to the work we submit for evaluation:

I pledge to uphold the principles of honesty and responsibility at our university.

The complete University Honor Code may be found at http://www.txstate.edu/effective/upps/upps-07-10-01.html under attachment I. The McCoy College Student Responsibilities on Learning may be found at http://advising.mccoy.txstate.edu/about/learningpolicy.

Specific examples of dishonesty include, but are not limited to the following: Sharing/comparing answers/files for homework assignments, projects, etc. is considered

academic dishonesty.  Working together or tutoring (explaining to another student how to get the answer) is not dishonesty; however, telling another student the answer is dishonesty.

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Having your cell phone or other recording device out during exams or while reviewing exams is considered academic dishonesty.

Turning in a project or other homework as your work when you did not calculate/enter/type all of the data entries yourself is dishonesty.

Letting another student or students turn in a project(s) or homework as their work, when you did part or all of the calculations, data entries, or information gathering is dishonesty.

You must do all the data entries yourself; watching a friend type/enter the data and printing out two copies is dishonest.  Working together is acceptable.  Printing multiple copies from one file and the only difference being the name of the student is cheating. 

Copying another student’s file, making minor changes, and turning the work in as entirely your own is also cheating. 

Signing the attendance log for another student who is not in the classroom is dishonest.

Penalties for academic dishonesty may include the following: Cheating on homework, quizzes, or other assignments means your overall grade for the course

will be reduced one full letter grade and you will not receive points for that assignment. Cheating on exams means a Zero for the exam and will result in instructor submitting an Honor

Code Violation. Signing another student’s name for attendance means your course grade will be reduced one full

letter grade. 

D. STUDENTS WITH DISABILITIES: A student with a disability may require an accommodation(s) to participate in the course. They must contact the instructor within the first two weeks of the semester. They will be asked to provide documentation from the Office of Disability Services (ODS) at that time. Failure to contact the instructor in a timely manner will delay any accommodations they may be seeking. Ongoing care by a physician does not automatically qualify you as an ODS special needs student. Students are required to file paperwork for accommodations with ODS each semester. Accommodations granted one semester do not automatically carry forward to the next. See UPPS No. 07.11.01 for additional information.

GENERAL INFORMATION

A syllabus is an organizational plan and as such, it may be necessary to make changes relating to it. Each student is responsible for finding out about any announced changes. I therefore suggest getting the telephone number of at least one other student in the class in case you are unable to get in contact with me.

Below is a suggested path to earn an A at the end of the semester, based on prior experience with this course.

Prepare for each class meeting by reading in advance the material to be covered. Attend every class meeting. Take careful notes during class and ask any questions necessary to understand the material

covered. Do the assigned homework when assigned and review for examinations. Create study notes for each exam by summarizing the class notes and text material covered on

the exam. Be aware of weak spots in learning during the semester, and work to strengthen them. Use the instructor to help your understanding throughout the semester.

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Complete all Reading Assignments before coming to class on the date listed. A reading assignment denoted with an "@" indicates readings that are not in the text, but are available to students on the TRACS website, Resources, for this course. Complete all homework assignments using the respective template provided at the course TRACS site using Word (no hand written homework) and bring the assignment with you to the class listed in order to receive credit.Date Class Activities, Chapters, and Topics to be

DiscussedHomework Assignments & Due Dates

Mon, January 14 Review Syllabus & Schedule, Intro to Internal Auditing/ Syllabus Quiz (for extra credit)

Syllabus, Review case assignment list, select & rank desired cases

Wed, January 16 Quiz 1, Chap # 1 Lecture/Discussion (L/D) Chap # 1 & COSO Overview@; H/W # 1Mon, January 21 Martin Luther King Holiday NO CLASSWed, January 23 Quiz 2, Chap # 2 L/D Chap # 2Mon, January 28 Oral Cases, Review H/W # 2, Start Chap # 3 L/D H/W # 2 (WR Grace & Comstock)Wed, January 30 Quiz 3, Continue Chap #3 L/D, Review H/W # 3

(start Chap # 4 L/D)Chap # 3, SOX & Corp Gov@, H/W # 3

Wed, January 30 12th day of classes, last day to DROP with full refund

 

Mon, February 04 Quiz 4, Chap # 4 L/D, Review H/W # 4 Chap # 4 & Mature Risk Mgmt ...@, H/W # 4Wed, February 06 Quiz 5, Chap # 5 L/D Chap # 5Mon, February 11 Oral Cases, Continue Chap 5 L/D, Review H/W # 5 H/W # 5 (Pizza Inc. & IPO Risk Analysis)Wed, February 13

Exam # 1, Chapters 1 – 5  

Mon, February 18 Review Exam Results, Quiz 6, Chap # 6 L/D Chap # 6Wed, February 20 Oral Cases, Continue Chap # 6 L/D, Review H/W #

6H/W # 6 (I/C Pictures x 2)

Mon, February 25 Quiz 7,Chap # 7 L/D Chap # 7Wed, February 27 Oral Cases, Continue Chap # 7 L/D, Review H/W #

7, & Assign Team CaseH/W # 7 (MVF Payroll); Read ABC Insturments Payroll Audit Case in TRACS

Mon, March 04 Quiz 8, Chap # 8 L/D Chap # 8Wed, March 06 Oral Cases, Continue Chap # 8 L/D H/W # 8 (Fannie Mae & Student Selected Fraud)March 11 - March 15

Spring Break Have fun; be safe!

Mon, March 18 Quiz 9, Chap # 9 L/D, Oral Case Chap # 9, Sample IA Department Charter@, CAE & Audit Committees@, & (Pat Goodley)

Wed, March 20 Exam # 2, Chapters 6 - 9  Mon, March 25 Review Exam Results, Quiz 10, Chap # 10 L/D Chap # 10, Benford’s Law@ & Workpapers_Dec08@

Wed, March 27 Oral Cases, Continue Chap # 10 L/D, Review H/W # 10

H/W # 10 (ACL & IDEA), Submit via Email DRAFT of Team Case steps A, B, & C (pages 1 & 2) and D (Process Flow Map/Chart, page 3).

Mon, April 01 Quiz 11, Chap # 11 L/D, Review H/W # 11, Oral Case

Chap # 11 & H/W # 11 (Sampling)

Wed, April 03 Quiz 12, Chap # 12 L/D, Review H/W # 12 Chap # 12 & H/W # 12 Mon, April 08 Quiz 13, Chap # 13 L/D Chap # 13 Wed, April 10 Continue Chap # 13 L/D, Review H/W # 13, (Start

Chap # 14 L/D)H/W # 13

Mon, April 15 Quiz 14, Chap # 14 L/D, Review H/W # 14, Class Exercise

Cases # 1 & # 2 in Chap # 14, H/W # 14

Wed, April 17 Submit and Discuss Team Cases Submit Team Case Solution (email to instructor before class, bring hard copy to class)

Mon, April 22 Exam # 3, Chapters 10 – 14  Wed, April 24 Review Exam Results, Quiz 15, Chap # 15 L/D, Chap # 15Mon, April 29 Review H/W # 15, Class Exercise, Review for Final

ExamCases # 1 & # 2 in Chap # 15, H/W # 15

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Mon, May 06 Final Exam, Chapters 1 – 15 002: 2:00PM - 4:30PM, McCoy 125Wed, May 08 001: 11:00AM -1:30 PM, McCoy 113

    Due Dates

ChapterCase (refer to case descriptions in text at the end of chapters noted) Oral/Class Presentation

Written Case Report (3 to 5 pages + exhibits)

2 Case 1: SEC W. R. Grace Case Monday, January 28, 2013 Wednesday, February 06, 2013

2 Case 2: Comstock Industries, Mark Hobson

Monday, January 28, 2013 Wednesday, February 06, 2013

5 Case 1: Pizza Inc. Monday, February 11, 2013 Wednesday, February 20, 2013

5 Case 2: IPO Risk Analysis (use links below to find lists of IPOs, submit to instructor for approval)

Monday, February 11, 2013 Wednesday, February 20, 2013

http://www.nyse.com/about/listed/IPO_Index.html

   

http://www.nasdaq.com/reference/IPOs.stm

   

http://www.ipomonitor.com/    

6 Internal Controls Pictures Wednesday, February 20, 2013 Monday, March 04, 2013

7 MVF Payroll System Wednesday, February 27, 2013 Monday, March 18, 2013

8 Case 1: Fannie Mae (see instructor for additional information to use in case)

Wednesday, March 06, 2013 Monday, March 25, 2013

8 Case 2: Student Selected Fraud Cases (one fraud case/company per student, students pick company, submit to instructor for approval, not Enron,HealthSouth, Worlcom/MCI)

Wednesday, March 06, 2013 Monday, March 25, 2013

9 Pat Goodly, New CAE Monday, March 18, 2013 Wednesday, March 27, 2013

10 Case 1: ACL Software (see instructor regarding additional BSR software to use in presentation)

Wednesday, March 27, 2013 Monday, April 08, 2013

10 Case 2: IDEA Software (see instructor regarding additional BSR software to use in presentation)

Wednesday, March 27, 2013 Monday, April 08, 2013

11 Case 1: Attribute Sampling Plan Monday, April 01, 2013 Wednesday, April 10, 2013