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School of Business and Economics

Department of Accountancy
Downtown Campus


Course Details

Course No. : AC 516 Professor: Janssen Jay P. Tongco

Course Title : Assurance Principles, Professional Ethics Office : Department of Accountancy
and Good Governance
Credit Units : 6
Pre-requisites : AC 510 Financial Accounting & Reporting Part III Contacts: Email: Phone: 253-1000 loc. 210
AC508 Accounting Information Systems
Term : 2nd Semester, SY 2013-2014
Schedule :

Course Description

The course provides 3rd year undergraduate Accountancy students with the conceptual knowledge and understanding of the fundamental theory of auditing and assurance
services, and the philosophy underlying audits with emphasis on external auditing as performed by independent Certified Public Accountants and the management of public
accounting practice. The course covers Philippine Standards on Auditing; the Philippine Accountancy Law; internal controls; audit objectives; audit techniques; audit
programs and procedures; and audit reports. Ethical standards affecting the accountancy profession are also taken up.

The course emphasizes the use of relevant knowledge, skills, and professional judgment in analyzing, evaluating, concluding and reporting on the assurance engagement and
other issues in the context of the professional regulatory framework. It is intended to adequately prepare students for analytical activities in subsequent major courses in the
Accountancy curriculum.

Program Level Student Learning Outcomes

Each course has specific Course Level Student Learning Outcomes (SLOs) that will be achieved through the curriculum designed for the course. The cumulative achievement
of all Course level SLOs will result in the achievement of Eleven (11) Program Level Student Learning Outcomes as listed below.

Upon completing the BS Accountancy program, graduates will demonstrate the following:
PO1: Business Knowledge: The ability to acquire and apply basic knowledge of science, mathematics, business and economics and to understand key terms, facts and
processes related to Finance and Accounting.
PO2: Communication/Reporting: The ability to verbalize and articulate business information needed by various stakeholders in making economic decisions.
PO3: Leadership/Teamwork: The ability to influence or work with others towards a common goal.
PO4: Multi-disciplinary Teams: The ability to function in collaboration with other disciplines.
PO5: Witness to the Word: The ability to be professionally competent, noble in character and sensitive to the Gospels mission and adhere to the Code of Professional
Ethics for the accounting profession.
PO6: Life-long Learning: The ability to demonstrate personal and intellectual autonomy and information literacy
PO7: Research: The ability to undertake an in-depth study of accounting, tax, business law and auditing issues.
PO8a: Technical Competency Risk Analysis: The ability to analyze, interpret and manage financial, business and audit risks.
PO8b: Technical Competency Problem Solving: The ability to identify and analyze problems related to accounting, tax, business law and auditing issues as basis for
solutions and recommendations.
PO8c: Technical Competency Decision Making: The ability to render professional judgment on the preparation of external and internal reports based on applicable
standards and practices.
PO9: Broad Business Perspective: The ability to analyze and interpret business information from various business industries or sectors, either local or international.
PO10: System Design: The ability to evaluate and design an accounting information system.
PO11: Contemporary Issues: The ability to present options in resolving emerging and relevant issues related to accounting, tax, business law and auditing.

Course Level Student Learning Outcomes

These SLOs are designed to support the Program Level Student Learning Outcomes.
Targeted Program Level Outcomes (PO)
Upon completion of the course students should be able to: PO1 PO2 PO3 PO4 PO5 PO6 PO7 PO8a PO8b PO8c PO9 PO10 PO11
CO1: Explain the purpose, nature, scope and ethical principles
and rules governing the conduct of auditing and assurance in the
Philippines including the role, duties and responsibilities of an

CO2: Apply audit concepts, skills, tests and techniques in

obtaining audit evidence.
CO3: Develop an audit plan, implement audit procedures and
prepare an appropriate audit report based on the audit evidence X X X X X X X
CO4: Apply auditing skills in non-assurance services and
assurance on non-financial information.
CO5: Analyze typical and contemporary audit and assurance
situations by applying conceptual framework on auditing
standards, corporate governance, professional ethics and
financial reporting.
CO6: Work productively as part of a team and, in particular,
communicate and present information effectively in written and X X
electronic formats in a collaborative environment.

Course Structure

Topics Student Learning Outcomes

(Expected Course Competencies)
I. Fundamentals of Auditing and Assurance Services CO1 and CO5
A. Nature, objective, framework and elements 1. Relate review of current publications and materials from various media with the
B. Types of assurance engagements general principles of audit and assurance engagements.
C. Assurance service vis--vis attestation service and audit service 2. Argue from a range of contesting theories relating to auditing.
D. Types of audit and auditors 3. Differentiate audit from other types of engagement provided by a CPA.
4. Compare and contrast the different types of audit and auditors.
II. The Professional Practice of Public Accounting 5. Research on the regulatory environment within which external audits take place.
A. Public accounting as a profession 6. Resolve ethical dilemmas faced by accountants in different sectors of the
B. Regulatory government agencies and standard-setting bodies that affect public accountancy profession.
C. Regulation of the public accounting practice
D. The CPAs professional responsibilities

III. The Financial Statements Audit Client Acceptance, Audit Planning, CO2, CO3 and CO6
Supervision and Monitoring 1. Illustrate in a diagram the audit process.
A. Overview of the audit process 2. Analyze the relationship of the components of audit risk with materiality and the
B. Materiality and audit risk auditors response to each risk.

C. Pre-engagement procedures 3. Link individual experience of understanding an entity with the wider structural
D. Scope, purpose and requirements of audit planning elements relevant to understanding the entity and environment of a client.
E. Direction, supervision and review 4. Apply the steps in audit planning to real-life situations and explain the rationale
for doing so.
IV. Understanding the Entity and its Environment including its Internal Control 5. Assess the risk of material misstatements in the financial statements through
and Assessing the Risks of Material Misstatement analytical and critical thinking.
A. Industry, regulatory and other external factors, including the applicable 6. Explain in depth how auditors identify deficiencies in internal control systems
financial reporting framework affecting the entity and how those deficiencies limit the extent of auditors reliance on those
B. Elements of internal control and consideration of accounting and internal systems.
control systems
C. Assessing the risks of material misstatement
D. Communicating with those charged with governance and management

V. Audit Objectives, Procedures, Evidences and Documentation CO2, CO3 and CO6
A. Nature and significance 1. Illustrate the use of assertions in obtaining audit evidence and discuss the
B. Audit evidence procedures for obtaining audit evidence.
C. Audit procedures/techniques including tests of control and substantive 2. Document the evidence gathered to form logical working papers.
procedures 3. Design and perform test of control and substantive procedures.
D. Audit working papers 4. Recommend improvements on internal control by preparing a management
VI. Audit Sampling 5. Choose and apply the appropriate statistical sampling and other selective testing
A. Basic audit sampling concepts procedures.
B. Factors affecting sample design
C. Factors affecting sample size
D. Sample selection methods
E. Evaluation of sample results

VII. Completing the Audit / Post-Audit Responsibilities CO2, CO3 and CO6
A. Scope, purpose and requirements in completing the audit 1. Apply the steps in the wrap-up process to real-life situations and explain the
B. Post-audit responsibilities of auditors rationale for doing so.
2. Enumerate and explain the elements of an audit report.
VIII. Reports on Audited Financial Statements 3. Prepare an appropriate audit report based on the information provided.
A. The unmodified auditors report and its elements 4. Compare and contrast an unmodified opinion with the different types of
B. The different types of modified auditors report modified opinion.
5. Evaluate an audit situation that has gone wrong and apply a solution.

IX. Other Assurance and Nonassurance Services CO4, CO5 and CO6
A. Procedures and reports on special purpose audit engagements 1. Differentiate the different types of special purpose report with the standard audit
B. Procedures and reports on nonaudit engagements report.
C. Procedures and reports on nonassurance engagements 2. Identify examples of special purpose audit engagements and nonaudit
3. Apply the steps in performing nonassurance engagements.
4. Synthesize coherent standards pertaining to related services provided by a CPA.
5. Reflect on the application of auditing to day-to-day activities


Educational Resources

A. Books

Textbook: Rasalan-Racaza, C. and Datu-Evangelista, R., Auditing Theory for Students & Practice Guide for Auditors, 4th ed., GIC Enterprises & Co., Inc. (2011)

Workbook: Racaza, C., Restificar, N., Tongco, J., and Cortes, M., Compilation of Exercises and Cases in Auditing, 2nd ed., (2012)

References: Boynton, W. and Johnson, R., Modern Auditing Assurance Services and the Integrity of Financial Statements, 8th ed., John Wiley and Sons, Inc., (2006)

B. Websites

Auditing and Assurance Standards Council:

Philippine Stock Exchange:

Philippine Institute of Certified Public Accountants:


Course Requirements

As a students in this course, you must comply with the following requirements:
1. Attendance and Class Participation
You are expected to attend all classes. Attendance in the lectures is very important because the lectures present new information and provide background for the
assignments. You are responsible for all of the material presented in lectures.

The USC Student Manual (2006 Edition) specifies that a student who incurs absences of more than 20% of the prescribed number of class hours or laboratory periods
during the term should be given NC or 5.0. A 3-unit course has 48 class hours. Students with three absences are required to get a readmission permit from the college

Class participation is evidenced by individual or group outputs from in-class exercises. These outputs shall be collected at the end of a class meeting. In-class exercises
could include short quizzes, seatworks, and group discussions.

2. Out-of-Class Learning Tasks and Assignments

To ensure learning engagement and constant timely practice, you are required to do out-of-class tasks in the form of small projects and recommended problems relevant to
a particular unit. To this end, you are required to have a notebook intended only for focus notes and exercises. From time to time, your notebook will be checked in order
to assess the timeliness of your learning efforts.

3. Tests and Examinations

A minimum of four (4) exams are given during the semester and are scheduled following the schedules set by the university. The midterm exam and the final exam are
three-hour examinations and require students to present valid examination permits for participation in the examination.

4. Portfolio
A portfolio of the students work will be submitted at the end of the term. Such portfolio will contain the activities that the student had undergone throughout the semester.
The portfolio will contain the students completed concept maps, collected sample audit evidence and audit reports, finished mini-case analyses and reflections thereof.
The student will also write summaries of each activity and a brief reflection of their learning.

Evaluation/Grading System

This course will follow the standard grading system of the university as follows:
For the Midterm Grade:
Tests/Quizzes 1/3
Other Assignments/requirements 1/3
Midterm Exam 1/3
For the Final Grade:
Midterm Grade 1/3
Class Standing after Midterm 1/3
Final Exam 1/3

GPA Scoring

For purposes of transmutation, the Department of Accountancy standard equivalents will be used as follows:
100-95 1.0 82-81 1.7 68-67 2.4 49 & below 5.0
94-93 1.1 80-79 1.8 66-65 2.5
92-91 1.2 78-77 1.9 64-62 2.6 Note: Below 3.0 is equivalent to a failing grade of 5.0
90-89 1.3 76-75 2.0 61-59 2.7
88-87 1.4 74-73 2.1 58-56 2.8
86-85 1.5 72-71 2.2 55-53 2.9
84-83 1.6 70-69 2.3 52-50 3.0

Course Policies

Attendance will be checked 5 minutes after the scheduled start of the class. If you are not around during the roll call, you are automatically marked late. Although occasional
tardiness may be tolerated, habitual tardiness is not. Students who are habitually late may be required to do extra learning tasks.

Special Assignments
Students are encouraged to work together on assignments and when studying. However, the product that you shall turn in must be your own work, not a direct copy of
someone elses work. Cases of copying shall be dealt with following the universitys procedures for disciplinary actions. Note that the university considers dishonesty or any

fraudulent act as a major offense. Thus, make sure that you do your own work and that you protect them from plagiarism by others.
Special assignments that are submitted late may not be accepted.

Missed Tests and Exams

If you miss to take a scheduled examination, you can make a formal written request to take a special examination if missing the examination was due to a serious medical
condition or due to an emergency. "EMERGENCY shall be understood as an unforeseen combination of circumstances which calls for an immediate response to an urgent
need for assistance or relief. Pertinent supporting documents must be attached to your letter of request. The schedule of the special examination shall be set by the teacher.

Classroom Behavior
In class, students are expected to behave in a manner that would not unnecessarily disrupt classroom activities. The instructor reserves the right to expel misbehaving students
from the classroom. For one, use of cell phones during class hours is strictly prohibited; cell phones used in class will be confiscated and surrendered to the Student Affairs
Office. (Students are assumed to have read Section 2.5.4 to 2.5.12 of the USC Student Manual, 2006 edition.)

Classroom Management

1. Attendance is a MUST. Students may incur only ten (10) absences for MWF schedules or seven (7) absences for TTH schedules. Otherwise, they will automatically
be dropped from class and receive a grade of either NC (No Credit) or a failing grade of 5.0 whichever is applicable.
2. Students who incur three (3) absences will be asked by the instructor to see the Department Chair to secure permission to be re-admitted to class. A re-admission slip
should be properly accomplished for this.
3. Tardiness is discouraged. It is a source of irritation and class disruption when students arrive late. Students who arrive 15 minutes after the start of class are
considered tardy. Please note that a total of three (3) tardiness is equivalent to one (1) absence.
4. A permanent seat plan will be made at the start of the semester. Students are advised to keep to their assigned seating arrangement; otherwise, they will be marked
absent for that day.
5. Classes should always start and end with a short prayer. The instructor can opt to lead the prayer or assign students to do this alternately.
6. Students should assist in maintaining the orderliness and cleanliness of the classrooms. Graffiti writing is strictly prohibited. Any student found violating this rule
will be punished with the appropriate sanction. Before leaving the classroom, the instructor with the help of the students, should ensure that no litter/garbage is left
behind and that chairs are in their proper order. Should the class be the last schedule for the day, the instructor should arrange that the lights and air conditioning units
are switched off.
7. Going out of the classroom at any time is strictly discouraged. Students should make it a habit to go to the restroom during their vacant period or before the start of
their classes. If they must visit the restroom, permission should be sought from the instructor.
8. Use of mobile phones inside the classroom is strictly prohibited. They should be switched off or placed in silent mode before entering classes. The instructor has the
right to confiscate mobile phones that ring and/or are used during class hours. The confiscated unit can only be claimed from the Deans Office at the end of the

9. The teacher reserves the right to ask the student to leave the room if his behavior is disruptive in class.
10. It is the responsibility of the students to properly schedule their classes so that meals and snacks will be taken at the proper time.
11. Students are encouraged to see the instructor during consultation hours for any concerns, questions and assistance with regards to the course.

Written Exam Essay

Criteria Weig Exemplary (10-9 pts) Admirable (8-7 pts) Acceptable (6-4 pts) Attempted (3-1 pts)
Answer is appropriate to the question. Answer is appropriate to the Content relates peripherally Content unrelated to question.
Content is factually correct. question. to the question.
Content 25%
Content may have one or Contains significant factual
two factual errors. errors.
Clear sense of order. May lack a topic sentence, Logic of argument is Lacks clear organizational plan.
Begins with a topic sentence. but points are presented in a minimally perceivable. Reader is confused.
Supporting points are presented in a logical progression. Points presented in a
Organization 25%
logical progression. seemingly random fashion,
but all support the
Develops each point with many specific Each point supported with Sparse details or evidence. Statements are unsupported by
details. some details and evidence. Question only partially any detail or explanation.
Development 25%
Answers question completely. All important points answered. Repetitious, incoherent,
included. illogical development.
Uses audit terminology appropriately Accurate word choice. Ordinary word choice; use Limited vocabulary.
and correctly. No more than 2 major of audit terminology Errors impair communication.
Use of No major grammatical or spelling errors and a few minor avoided.
Language errors. errors. Some serious errors (but
they dont impair

Oral Presentation of Synthesized Sharing

Criteria Weig Exemplary (10-9 pts) Admirable (8-7 pts) Acceptable (6-4 pts) Attempted (3-1 pts)
Work load is divided and shared Some members contribute Few members contribute Only one or two people do the
Collaboration/ equally. work
Teamwork Everyone was able to contribute and
Demonstrate full knowledge by Is at ease with expected Is uncomfortable with Does not have grasp of
answering all class questions with answers to all questions, information and is able to information and cannot answer
explanations and elaboration. without elaboration. answer only rudimentary questions about subject.
Properly synthesize the report in a Properly synthesize the questions. No summary made; the report
simplified, orderly manner and report in a simplified and The report was haphazardly was coming from one person
encapsulate every information shared orderly manner but some summarized without only.
Organization/ 25%
in the group. information was left out. cohesion. Does not clearly define subject
Provides clear purpose and subject; Has some clear purpose and Attempts to define purpose and purpose; provides weak or
pertinent examples, facts and/or subject; some examples and and subject; provides weak no support of subject; gives
statistics that supports conclusion. facts and/or statistics that examples and which do not insufficient support for ideas
supports conclusion. adequately support the and conclusion.
Holds attention of entire audience with Consistent eye contact with Displays minimal eye Holds no eye contact with
the use of direct eye contact and seldom audience but still returns to contact with audience, audience, as entire report is read
looks at notes. the notes. while reading mostly from from notes.
Delivery 25%
Speaks with fluctuation in volume and Speaks with satisfactory the notes. Speaks in low volume and/or
inflection of interest among audience variation in volume and Speaks in uneven volume monotonous tone, which causes
and emphasize key points. inflection. with little or no inflection. audience to disengage.
Demonstrate strong enthusiasm about Shows some enthusiastic Shows little or mixed Fails to increase audience
topic during presentation. felling about the topic. feelings about the topic understanding of knowledge of
Significantly increases audience Raises audience presented. topic.
Audience 25%
understanding and knowledge of topic; understanding and Raises audience Shows no interest in a topic
convinces an audience to recognize the awareness of most points understanding and presented.
validity and importance of the subject knowledge of some points.

Concept Map
Criteria Weight Exemplary (10-9 pts) Admirable (8-7 pts) Acceptable (6-4 pts) Attempted (3-1 pts)
Shows an understanding of the topics Makes some mistakes in Makes many mistakes in Shows no understanding of the
concepts and principles and uses terminology or shows a few terminology and shows a topics concepts and principles.
appropriate terminologies misunderstandings of lack of understanding of Many misconceptions are
Concept/ 30%
No misconceptions/errors evident. concepts many concepts. evident.
Few misconceptions are Some misconceptions are
evident. evident.
Well organized Thoughtfully organized Somewhat organized Choppy and confusing
Logical format Easy to follow most of the Somewhat incoherent Contains a limited number of
Contains main concepts time Contains only few of the concepts.
All key words and concepts necessary Contains most of the main main concepts. Many key words and concepts
to promote an overview of the unit are concepts Many key words and from the units are missing.
Organization 30%
used and well organized to give added Most key words and concepts from the unit are
meaning. concepts from the units are covered and are somewhat
covered in a meaningful organized.
way and are thoughtfully
All words are accurately connected. Most words are accurately Some words are accurately Words are inaccurately
Connections indicate superior connected. connected. connected.
Connections organization/ understanding and Connections are clear and Connections are somewhat Connections arent clear; they
and 30% enhance meaning. logical. clear and convey some convey little meaning and do
Relationships Arrows easily connect concepts in an Identifies important meanings. not promote clarity.
informative manner. concepts but make some Makes some incorrect Fails to use any appropriate
incorrect connections. connections. concepts or connections.
Originality The design is highly original and The design provides a look The design is very basic but The document is cluttered and
and Overall 10% displays mastery of the topic covered and feel that improves the works for the intended designed in a way that is
design overall experience. purpose. difficult to read.

Mini-Case Analysis
Criteria Weight Exemplary (10-9 pts) Admirable (8-7 pts) Acceptable (6-4 pts) Attempted (3-1 pts)
Provides a thorough, clear and Provides a clear and concise Provides a clear but less Provides unclear and somewhat
10% concise summary of the case context summary of the case context concise summary with rumbling summary of case facts
and content. and content some insignificant info. or no summary at all.
Identifies and thoroughly describes Identifies and clearly Provides superficial Attempts to discuss issues, but
multiple problems in the case; describes most of the major discussion of the problems fails to recognize any of the key
indicates relevant importance among problems in the case with a with no discussion of problems of the case.
of Major 10%
the issues and explains why. simplistic discussion of the relevant importance.
relevant importance of the
Thorough analysis which includes Analysis includes only two Analysis includes only two: Analysis only includes one of
all: of the following: 1. Problems are the mentioned items.
1. Problems are properly identified 1. Problems are identified simplistically analyzed. Incorrect method used
Proper and thoughtfully analyzed. and analyzed. 2. Method is correct but Fails to provide any meaningful
Analysis 2. Proper methods used with 2. Proper methods used erroneous interpretation analysis.
supporting computation, if any. 3. Some of the relevant 3. One relevant legal,
3. Most relevant legal, ethical or legal, ethical or policy ethical or policy issues
policy issues are analyzed. issues are analyzed. are analyzed
Thorough discussion of the action Strong discussion of the Adequate discussion of the Limited or fails to provide
plan to resolve the case problem action plan to resolve the action plan to resolve the meaningful resolution of the
Decision and There is direct connection of the case problem. case problem. major problem.
Action Plan decision making and the analysis of There is clear connection of Superficial analysis of the Weak evidence analysis that
evidence the decision making and the evidence vis--vis with the guided the decision making.
analysis of evidence decision making.
Consistently contains accurate and Most of the time an accurate Frequent errors on Numerous errors on grammar,
proper grammatical conventions, and proper grammar, spelling grammar, spelling and spelling and punctuations.
spelling and punctuation. and punctuations. punctuations. Lack logic and distracting.
Organization 20%
Well organized Well organized Not well organized. No citation or reference.
and Citations
Proper reference and citation, if any Proper reference and citation Inconsistent citations or
if any reference.

Criteria Weight Exemplary (10-9 pts) Admirable (8-7 pts) Acceptable (6-4 pts) Attempted (3-1 pts)
All entries to the portfolio are All entries to the portfolio are All entries to the portfolio Some entries are missing or
completed and organized completed according to are completed according to incomplete.
correctly. directions. directions. Key elements are missing or
10% Key elements demonstrate Key elements demonstrate Key elements demonstrate element meets minimum
creativity and style. creativity and style. originality. standards.
Entries demonstrate high level of Entries are error-free. Entries are error-free. Entries contain several written
usage and writing skills. or proofreading errors.
Entries reflect evaluation and Entries reflect analysis and Entries reflect Entries reflect recall.
Evidence of application. synthesis. comprehension and recall. Entries reflect no basic
Understanding Entries reflect advanced Entries reflect basic to Entries reflect basic understanding.
understanding and transfer. advanced understanding. understanding.
Entries demonstrate transfer of Entries demonstrate active Entries demonstrate team- Entries demonstrate minimum
social skills to all class work. involvement in group work in an acceptable scale. use of listening and sharing.
Entries demonstrate ability to solve activities. Entries demonstrate ability Entries demonstrate ability to
problems creatively. Entries demonstrate ability to to brainstorm possible identify problems.
Growth and
30% Entries demonstrate excellent brainstorm possible solutions. solutions. Entries demonstrate no growth
growth in both analytical and Entries demonstrate amenable Entries demonstrate in both analytical and personal
personal skills. growth in both analytical and superficial growth in both skills.
personal skills. analytical and personal
Reflections provide evidence of Reflections provide insight on Reflections provide insight Reflections are absent or
organized and thoughtful insights students perception on on personal feelings. minimally done.
Reflections 30%
in a societal and holistic view. various and unconnected