Faculty of Economics and BusinessUniversitas Gadjah Mada

Undergraduate SyllabusInternal Auditing (AKU 33)

Lecturer : Taufikur Rahman, SE, MBA, Akt.Office Address : Faculty of Economics and Business 2nd Floor West Wing (B 320)Phone Number : (0274) 548510 ext. 172Consultation : Thursday, 12.30 – 13.30

Out of that schedule, make an appointment first by emailE-mail : taufikur@ugm.ac.id & taufikur.ugm@gmail.com

COURSE OVERVIEW:This subject is one of some elective topics in auditing, focused on internal auditing in organization or company. Several topics will be discussed such as: internal auditing concepts, internal auditor profession and environments, internal audit professional standards and code of ethics, fundamental of internal control system, internal audit process, internal audit reporting and documentation.

Main objective is to enable students to understand and know the internal audit process as independent function in organization and help management process in attaining organization goals, especially in reviewing of effective design and operation of internal control system.

Student must be active in this class and using basic auditing knowledge that acquired in previous classes to participate and discuss internal auditing issues. Students must have a group to present and discuss a topic according to the class schedule.

LEARNING GOALSa. Students demonstrate the ability to apply critical thinking b. Students demonstrate the ability to analyze and evaluate accounting information

1. Demonstrate the ability to analyze audit process2. Demonstrate the ability to evaluate financial statement for audit purpose

c. Students have ethical understanding and reasoning1. Demonstrate ability to identify ethical issues in auditing environment2. Demonstrate ability to identify and explain moral standards can be used to evaluate ethical issues in business environment3. Students demonstrate ability to observe business situations or decisions from various moral standards

d. Students demonstrate the ability to work in teams1. Demonstrate the ability to respect peers in auditing2. Demonstrate the ability to contribute to the team

COURSE OBJECTIVES:After completion of this course, students are expected to be able to:1. Understand internal auditing environment and why the entity need internal auditing2. Demonstrate the ability to identify importance of internal controls & internal controls frameworks

worldwide3. Determine the relationship internal audit and corporate governance4. Understand and identify internal audit professional standards and code of ethics5. Demonstrate the ability to assess risks: enterprise risk management 6. Develop audit plan: to select internal audit’s auditees7. Demonstrate the ability to make audit preparation & initial audit survey8. Demonstrate the ability to prepare internal audit program and working paper 9. Demonstrate the ability to make initial internal control review & expanded testing

10. Demonstrate the ability to identify internal audit evidence & findings11. Demonstrate the ability to make internal audit report12. Demonstrate the ability to perform follow-up review & internal audit evaluation13. Understand the Sarbanes-Oxley and beyond (contemporary internal audit issues)

COURSE MATERIALS:Auditing and accounting are closely related, however those two subjects are came from different discipline. An auditor should be mastered in accounting; therefore before the students take this course, they should have taken at least intermediate accounting courses. The auditing practice in a country is different from other countries, especially for internal auditing, differences among companies. This course uses the following resources:

1. Brink, Victor Z., and Herbert Witt, 2010, Modern Internal Auditing – Appraising Operations and Control. 5th Ed., John Willey & Sons (B)

2. Pickett, K.H. Spencer, 2010, The Internal Auditing Handbook, John Willey & Sons, (P)3. Ratliff, Richard L., Wanda A. Wallance, James K. Loebbecke, William G. McFarland, 1998.

Internal Auditing-Principles and Techniques. The Institute of Internal Auditors. (R) http://www.theiia.org/ http://www.iia-indonesia.com/

STUDENT’S RESPONSIBILITIES:1. Read the materials and do the homework to be discussed in each session before class meeting. Each

class meeting should be used to confirm the students’ understanding of the material and discussion the homework. The students should submit the individual homework before the class meeting, submitting after that time will be ignored.

2. Operating lap top, cellular/smart phone, and other communication/electronic devices are strictly prohibited during the class meeting unless the lecturer allow it.

3. Students are expected not to be late not more than 15 minutes4. Students should maintain academic’s honesty, they should avoid from committing to cheating and

plagiarism as defined below. Ignorance of these definitions will not provide an excuse for acts of academic dishonesty. Students who cheat or commit the act of plagiarism will be assigned a grade of “E” for the course and will be reported to the Academic Division for the most possible severe actions

The definitions for cheating and plagiarism are: cheating includes but is not limited to, giving or receiving unauthorized assistance during an examination; obtaining unauthorized information about an examination before it is given; submitting another’s work as one’s own; using prohibited sources of information during an examination; fabricating or falsifying data in experiments and other research; altering the record of any grade; altering answers after an examination has been submitted; falsifying any official University record; or misrepresenting of facts in order to obtain exemptions from course requirements. Plagiarism includes but is not limited to, submitting, in fulfillment of an academic requirement, any work that has been copied in whole or in part from another individual’s work without attributing that borrowed portion to the individual; neglecting to identify as a quotation another’s idea and particular phrasing that was not assimilated into the student’s language and style or paraphrasing a passage so that the reader is misled as to the source; submitting the same written or oral or artistic material in more than one course without obtaining authorization from the instructors involved; or “drylabbing,” which includes obtaining and using experimental data and laboratory write-ups from other sections of a course or from previous terms.

LEARNING METHOD:The student centre learning method is used in this course. Students must be an active learner to find and construct their own knowledge from the given resources material or other resources such as from internet, journal, articles, or other published information. The instructor serves only as facilitator to motivate and to drive the students to achieve learning objectives and develop their auditing skills.

GRADING:The assessment is designed so that a student can earn a total score of 100 for all combining components. The components are as follows:1. Class Attendance and Participation: 10%2. Assignments & Quiz 15%3. Mid-Term Examination: 25%4. Final Examination: 25%5. Class Projects (group: 3-4 students): 25%

TOTAL: 100%

The final score will be ranked to a course grade based on the following scheme:A : ≥ 90 C+ : 65 to 69A - : 85 to 89 C : 60 to 64B+ : 80 to 84 D : 50 to 59B : 75 to 79 E : < 50B - : 70 to 74

Homework: The homework is based on questions from the Boynton textbook. The instructor will identify the questions to be answered. Homework exercises are part of the learning process. In addition, some assignments may be used as a quiz or as a revised problem on an exam. It is very important to know that doing your homework is an integral part of learning auditing. You must be present to turn in homework before the class meeting and late homework will not be accepted.

Mini Project: Mini project is implementation of internal audit process in field work, it is not audit but the practice of internal audit theory for specific field. A group of student will perform a mini project of internal audit in certain entity (chosen by students). Every week each group should present a progress of internal audit step (performance) in certain internal audit working paper. Based on these working papers, eventually each group will develop internal audit report at the end of class.

Exam and Test Content: The exams during the semester will primarily test your ability to solve auditing problems. You may need a calculator for these exams. Notebook or cellular phone is not allowed to be used during quizzes, tests, and exams. Additional teaching materials (case studies and articles) will be distributed at least one week prior to the relevant class session. There will be no make-up exams.

Quiz Contents: There will be quizzes during the semester. These quizzes will test your knowledge of theory and problems. A quiz may consist of taking up a homework problem, may be a problem or an essay given in class, or it may be an assignment to be turned in on next class meeting. There will be no make-up quizzes. You must bring your text to class each day.

Attendance: Attendance is very important. If you do not attend class, the quiz cannot be made up and no late assignments are accepted.

Disclaimer: This syllabus is a general plan for the course. Changes may be made in the course content as the semester progresses.

Withdrawal/Drop Policy: The student has the responsibility to withdraw from the course. If a student stops attending class and do not drop the course, a grade of "E" will be assigned at the end of the semester.

COURSE OUTLINE:  INTERNAL AUDITING ( 3 Credit)  

1Syllabus OverviewReview previous audit subjects

SyllabusDiscussion

2 Foundation of Internal AuditingB-1, P-1, P-5, R-1Discussion, Homework

3Evaluating the Importance of Internal Controls & Internal Controls Frameworks Worldwide

R-3, B-3, P-4Discussion

4 Internal Audit and Corporate GovernanceP-2P-8, B-12, B-23Discussion, Homework,

5 Internal Audit Professional Standards and Code of EthicsB-8, B-24, P-6, R-2Discussion, Homework

6 Understanding and Assessing Risks: Enterprise Risk ManagementB-6, P-3Discussion, Homework

7 Internal Audit ManagementR-12, P-20-21Discussion

Mid Semester Test8 Overview Internal Audit Process & Selection of Auditee B-10, B-15, R-6, R-7

9 Internal audit planning: audit preparation & initial audit survey & ICQB-10, R-8, Project 1,Progress report 1

10 Internal audit program and working paperR-9 B-9, B-16, Project 2,Progress report 2

11 Initial internal control review & expanded testingR-9, B-9, B-16, Project 3,Progress report 3

12 Internal audit evidence & findingsR-10, B-17, Project 4,Progress report 4

13 Internal audit reportR-10, B-17, Project 5,Progress report 5

14 Follow-up review & internal audit evaluationR-11, B-17, Project 6,Final report 6

Final Semester Test