Accounting 2271
Auditing I
Course Information

This three semester-hour course was developed primarily for students planning to sit for the Certified Public Accountant Examination (the CPA Exam). Such students typically have already earned baccalaureate degrees and are taking courses at College of DuPage to meet the requirements to sit for the CPA Exam.

On the other hand, this course is also an appropriate choice for students currently working or planning careers in accounting, finance, management and many other career fields. In fact, students who want to gain a basic understanding of the auditing field because they are or will be working with external or internal auditors often take this course.

Today's CPA
What is a CPA? As stated in the Illinois CPA Society brochure entitled, 150 Hours in 2001 - Guide to the 150 Hour Requirement to Become a CPA in Illinois in 2001: "CPAs of today are business advisors and information specialists. That's a stretch from the traditional stereotype of CPAs as back-room number crunchers. CPAs are people-oriented, team workers, and business leaders. They need a solid understanding of accounting and business to be successful. They also need to be able to analyze and resolve complex business problems, working with a diversity of people and new technologies. Strong writing and communication skills are essential."

Course Description
Accounting 2271, Auditing I, is "An introduction to the role of the public accountant, professional standards, attestation and other assurance services, audit evidence and documentation, and reports on audited financial statements with particular emphasis on the auditor's decision-making process by integrating coverage of the components of audit risk with tests of controls and substantive tests which relate to selected transaction cycles."

The prerequisites for this course are Accounting 2241 (Intermediate Accounting I) or 2242 (Intermediate Accounting II) or consent of Instructor. If you are unsure whether you meet the prerequisite or are informed that you need a permit to register for this course, you should contact the Instructor.

Course Objectives
Upon successful completion of the course, you should be able to:

• Define and describe the public accounting profession and the types of assurance services performed by public accountants



• Define and describe generally accepted auditing standards



• Recognize the reasons for, and limitations of, financial statement audits



• Prepare and explain the auditor's standard report, and describe the acceptable modifications of the standard report



• Explain the concepts underlying materiality, describe the various types of corroborative audit evidence, and define the components of audit risk



• Identify the steps involved in accepting, planning, conducting, and documenting an audit engagement in accordance with generally accepted auditing standards



• Identify the elements of and basic concepts underlying internal control, obtain and document an understanding of the internal control system as it relates to the financial accounting information system, and describe the assessment of inherent and control risk



• Design detailed tests of controls for the sales and collection, purchases and disbursements, and payroll cycles



• Describe the relationship of inherent and control risk to detection risk, and design substantive tests for cash, receivables, investments, and current liabilities