ACT 142 COURSE OUTLINE

Course Title: Auditing and Assurance: Concepts and Applications 1

Course Description:
This course is designed to orient the students in the application of the audit standards techniques and
procedures in the risk-based audit process. The course will cover the stages of the risk-based audit process,
namely risk assessment (preliminary engagement activities, planning the audit and performance of the risk
assessment procedures) and risk response (designing and tests of controls and substantive test of
transactions in the revenue and collection cycle, expenditure cycle and financing and investing cycle. The
application of audit procedures in performing substantive tests of transactions and account balances of cash,
receivables and sales shall also be included.
Credit: 3 units (54 hrs/9 weeks) Prerequisite; ACT114

Time Topics Specific Learning Outcomes Resources Assessments

Frame
Financial Statements
Week 1 Statement of 1. Enumerate the complete set of Chapter 36 of Applied Quiz
Financial financial statements. Auditing by Asuncion,
Position and 2. Explain the classification and et.al.
Comprehensive presentation of assets in the
Income statement of financial position.
3. Explain the classification and
presentation of items in the
statement of comprehensive.
4. Enumerate components of other
comprehensive income.
5. Identify and explain related party
relationship and related party
transaction.
6. Differentiate the statement of
financial position and statement of
comprehensive income other PFRS
for SME and Full PFRS.
Income 1. Identify the audit objectives for Chapter 35 of Applied Quiz
Statement income statement items and related Auditing by Asuncion,
accounts. et.al.
2. Explain the primary substantive
audit procedures for income
statement items and related
accounts.
3. Identify assertions addressed by
audit procedure for income
statement items and related
accounts.
Statement of 1. Describe statement of cash flows Chapter 37 of Applied Quiz
Cash Flows and enumerate the three Auditing by Asuncion,
classifications of cash flows. et.al.
2. Explain the component of method of
presentation of operating cash
flows, financing cash flows and
investing cash flows.
3. Prepare statement of cash flows.
4. Differentiate the statement of cash
flows under PFRS for SME and Full
PFRS.

AUDIT OF CASH BALANCES

Week 2-3 Cash and Cash Theory Chapter 7 and 8 of Quiz
Equivalents 1. Explain and identify the Applied Auditing by
categories of management Asuncion, et.al.
assertion.
2. Identify the audit objectives for
cash and cash equivalents.
3. Describe the primary
substantive audit procedures for
cash and cash equivalents.
4. Identify assertions addressed
by audit procedures for cash
and cash equivalents.

Problems
1. Identify what items are included
as cash and cash equivalents.
 2. Calculate the correct balance of
petty cash fund.
3. Identify bank and book
reconciling items.
4. Prepare bank reconciliation and
proof of cash.

Cash and 1. Describe cash basis and Chapter 5 of Applied Quiz

Accrual Basis accrual basis of accounting. Auditing by Asuncion,
2. Compare and contrast cash et.al.
and accrual basis of
accounting.
3. Apply cash basis in accounting
for business transactions.
4. Apply accrual basis in
accounting for business
transactions.
5. Use and apply the T-accounts
approach in solving problems.
6. Translate accrual income to
cash basis income and vice
versa.

PRELIMINARY EXAMS

AUDIT OF THE REVENUE AND RECEIPT CYCLE

Week 4 Receivables and Theory Chapter 9 and 10 of Quiz
Sales 1. Identify the audit objectives for Applied Auditing by
receivables, sales and related Asuncion, et.al.
accounts.
2. Describe the primary
substantive audit procedures for
receivables, sales and related
accounts.
3. Identify assertions addressed
by audit procedure for
receivables, sales and related
accounts.

Problems
1. Define and identify the different
classification of receivables.
2. Explain the initial recognition,
initial measurement,
subsequent measurement,
financial statement presentation
and derecognition of
receivables.
3. Explain the accounting of
discounts and freight and how it
will affect receivables account.
4. Apply the different methods of
accounting for bad debts.
5. Explain and identify the different
methods of receivable
financing.
6. Calculate the correct balances
of receivables and related
accounts.
WEEK 5 - MIDTERMS
AUDIT OF EXPENDITURE AND DISBURSEMENT CYCLE &
AUDIT OF PRODUCTION CYCLE
Week 6 Liabilities Theory Chapter 25 and 26 of Quiz
1. Identify the audit objectives for Applied Auditing by
liabilities and related accounts. Asuncion, et.al.
2. Explain the primary substantive
audit procedure for liabilities
and related accounts.
3. Identify assertions addressed
by audit procedures for liabilities
and related accounts.

Problems
1. Describe the elements in the
definition of liabilities.
2. Identify the different categories
and classification of liabilities.
3. Describe the initial recognition,
initial measurement,
 subsequent measurement,
reclassification, derecognition
and financial statement
presentation of liabilities.
4. Classify liability as current and
non-current.
5. Compute the correct amount of
liability and its related accounts.

Payroll 1. Identify and describe the Chapter 30 of Applied Quiz

different classification of Auditing by Asuncion,
employee benefits. et.al.
2. Account for the short-term
employee benefits.
3. Account for the post-
employment benefits and
describe the differences
between defined contribution
plan and defined benefit plan.
4. Account for the other long-term
and termination benefits.
5. Describe the difference
between full PFRS and PFRS
for SMEs for employee
benefits.

Week 7-8 Inventory Theory Chapter 11 and 12 of Quiz

1. Identify the audit objectives for Applied Auditing by
inventories, cost of sales and Asuncion, et.al.
related accounts.
2. Describe the primary
substantive audit procedures for
inventories, cost of sales and
related accounts.
3. Identify assertions addressed
by audit procedures for
inventories, cost of sales and
related accounts.

Problems
1. Describe inventories of
manufacturing companies and
servicing companies.
2. Describe the initial recognition,
initial measurement,
subsequent measurement,
derecognition and financial
statement presentation of
inventories.
3. Identify the situations in which
periodic and perpetual system
is appropriate.
4. Compare and contrast
perpetual and periodic inventory
system.
5. Account properly purchase
commitments and inventory
transactions denominated in
foreign currency.
6. Account properly changes in
inventory method and inventory
error.
7. Calculate the cost of inventory
using inventory estimation.
8. Describe the difference
between full PFRS and PFRS
for SMEs.
9. Calculate the correct balance of
inventory and related accounts.

Agriculture 1. Enumerate the scope of PAS 41 Chapter 13 of Applied Quiz

Agriculture. Auditing by Asuncion,
2. Describe the features of agriculture et.al.
activity.
3. Describe the initial recognition, initial
measurement, subsequent
measurement, derecognition and
financial statement presentation of
biological assets and agriculture
produce.
4. Account properly government grants
 related to biological assets.
5. Describe the difference between
Full PFRS and PFRS for SMEs for
Agriculture.

WEEK 9 - FINALS

COURSE REQUIREMENTS
To pass the subject, you must be able to attain at least 75% grade.

GRADING SYSTEM

Examination (Prelims, Midterm, Finals) 50%

Quizzes 45%
Others 5%
TOTAL 100%

REFERENCES
Applied Auditing (2018) by Asuncion, Ngina, and Escala

COURSE POLICIES, REGULATIONS AND SPECIAL NEEDS:

A. Student Attendance in Class and Other Academic Activities
1. Start of class: November 15, 2020 ; End of class: January 15, 2020
2. Attendance is not required except during quizzes and examinations.
3. Assessments are given online.

B. Schedule of Class
1. Since we are adapting modular mode of delivery, we are not going to meet every week. There will only
be designated dates for online class.
2. Assessments will be given during Mondays or Wednesdays.

C. Student Discipline
1. The student is expected to take all examinations on the date scheduled. Request for excused absences
must be discussed with your instructor.
2. Submission of requirements must be done on or before the deadline. However, time extensions will be
granted to those who are experiencing poor internet connections.
3. Cheating automatically gives the student failing grade, 5.0. All students are expected to be
academically honest.
4. The use of cellphone is strictly prohibited during online discussions, quizzes, and exams.
5. Always wash your hands and practice proper social distancing. Avoid non-essential travels. Stay safe.

Prepared By:
Rosaifa H. Radi, CPA
Instructor