ACCOUNTING 4504 RESEARCH, AUDITING and MANAGERIAL ACCOUNTING INFORMATION AND CLASS POLICIES Fall 2004 "Learning is a verb; not a noun. It is journey; not a destination." Dougan Laird "I hear and I forget. I see and I remember.
I do and I understand." Chinese Proverb Professors Address and telephone Office Hours* Dr. Michael A. Robinson Blume Room 132 12:30 33:30 MW; 9 311 F 710-6129 Dr.
C. William (Bill) Thomas Blume Room 133 3:30 34:30MW; 1-4 TR 710-4924 * We encourage you to come by the office during regularly scheduled office hours. If inconvenient or an emergency, please call first to make sure we are in.
We will gladly schedule an appointment. Texts (New) Accounting and Auditing Research, 5th Edition. Thomas R.
Weirich and Alan Reinstein. South- Western College Publishing, 2000. (Denoted W&R in schedule and teaching plans) Auditing and Assurance Services , 3rd Edition.
William F. Messier, Jr. McGraw-Hill, 2004.
(denoted Messier in assignment schedule and learning plans) Cost Accounting: A Managerial Emphasis, 11th Edition. Horngren, Foster, and Datar. Prentice Hall, 2003.
Learning Plans for Accounting 4504. Baylor Book Store, 2004. You should purchase separate sets of learning plans for auditing and managerial accounting.
Supplemental AICPA Professional Standards (Vols. 1 and 2). 2004.
These are available in the ... more. less.
labs in electonic format. Dr. Thomas will give instructions as to access.<br><br> Financial Accounting Research System (FARS). Financial Accounting Standards Board (John Wiley, 2003). These are available in the labs in electonic format.<br><br> Dr. Thomas will give instructions as to access. From Your Professors Congratulations on your preparation and accomplishments to this point!<br><br> We are excited that you are continuing in this innovative and dynamic process. The Goals and Learning Objectives of the Integrated Core The overall goals of the integrated senior core are threefold: (1) to develop your technical knowledge in the various disciplines of accounting; (2) to demonstrate the integrative nature of the concepts embodied in our disciplines; and (3) to help you develop "expanded competencies," skills that are essential for success in your business career. You also will be studying accounting and auditing research, integrating topics in financial accounting and auditing to the extent possible.<br><br> A faculty team is responsible for teaching this course. In addition to teaching technical material, each subject area, and partcularly the auditing and research components, will focus on the following expanded competencies: communicating orally and in writing; understanding group dynamics and working effectively with others; identifying and solving problems in diverse and unstructured situations; reading, critiquing, and judging the value of written work; dealing effectively with imposed pressures and deadlines; taking ownership and responsibility in a task; and anticipating, developing, and implementing strategies for change. Your performance in the course will be determined partly by mastery of these skills as well as technical concepts.<br><br> Accounting 4504 will round out your exposure to auditing, as well as add important managerial accounting concepts and skills to your knowledge base. Additionally, you will learn the important process involved in researching an accounting or auditing issue and communicating the results of the process both orally and in writing. As was the case last semester, you are required to purchase the learning plans for both the Monday- Wednesday and Tuesday-Thursday sessions of this course.<br><br> Those plans provide the "roadmap" for each daily experience in the core. Specific learning objectives are specified in each plan. However, you should keep in mind the following general learning objectives of Accounting 4504: (1) To understand the points at which auditing, managerial accounting, financial accounting and taxation are interrelated, and to use this understanding in business planning and control.<br><br> (2) To understand accounting as one of the many information systems in a business. Thus, this course should expand the knowledge of information systems you gained in previous courses. (3) To understand and document the flow of information through an accounting system, as well as learn how that information is captured, recorded, summarized, reported, and used by various parties for managerial decisions.<br><br> (4) To understand the internal control structure of a typical business enterprise and to integrate this understanding into a practical audit plan. (5) To recognize professional, ethical, and legal issues in accounting practice. (6) To learn how to apply analytical, problem-solving, and statistical skills to realistic business situations.<br><br> (7) To become exposed to technical standards and other literature necessary for acceptable performance on professional examinations. (8) To learn how to research technical accounting and auditing questions in the appropriate literature, and to support a conclusion both verbally and in writing. This involves understanding both manual research techniques and the use of computer information technology such as LEXIS/NEXIS, CD ROM databases, and the Internet.<br><br> Grading The two pages entitled "Grade Composition" summarize the grading structure of Accounting 4504. Notice that separately graded assignments are grouped into five categories: exams, cases, homework, writing assignments, and oral presentations. In addition, evaluations of your contributions to group work will be incorporated into your grades on several assignments.<br><br> Your scores on seven examinations will comprise 65% of your course average. The final examinations in both managerial accounting and auditing will include a comprehensive section . We will explain the content and format of these examinations at a later time.<br><br> Dates for final examinations also will be given later in the semester. The remainding 35% of the course is composed of both individual and group work . An "I" beside an assignment indicates that you are to do it individually.<br><br> A "G" beside an assignment indicates that it is to be done as a group . Please take note of this distinction. We take the honor code at Baylor University very seriously.<br><br> All work represented to us as individually yours should be completed solely by you. This means no collaboration with other individuals in the class on assignments labeled "I." It also means no plagiarism. For this purpose, we define plagiarism as copying material directly from any other source without giving proper reference.<br><br> Approximately 80% of your grade will be based on mastery of technical content in its various forms. The remaining 20% will be based on performance in the "expanded competencies." We will provide forms on the cJ Drive d and Blackboard that demonstrate how various expanded competencies will be graded. Due dates for the case assignments, reports, and presentations are provided in the Accounting 4504 Assignment Schedule.<br><br> All assignments are due as noted on the schedule. Late assignments will not be accepted without prior approval from your professor. Personal Computers Some of the work in this course must be accomplished using computer technology.<br><br> It is important that all work be completed on schedule in groups outside of class. Although we do not require students to have their own computers, it may be more convenient for each student team to have access to a personal computer with a modem. Please consult with your professors or with the Casey Computer Center regarding the proper equipment to purchase.<br><br> The Importance of Advance Preparation Learning plans contain both before-class assignments and after-class assignments. You should complete all required readings, written exercises, and group exercises in the before-class assignment section prior to coming to class on that particular day. You should be prepared to participate in class discussions based on all assigned readings and other assigned work.<br><br> You also should be prepared to ask specific questions about difficult problems. PowerPoint Presentations Some of Dr. Thomas 9s lectures in Accounting 4504 will be supplemented with PowerPoint presentations that we have prepared.<br><br> All of these slides are on the HSB network on the "J" drive under ACC4504 in the Thomas directory, as well as on Blackboard. You will find it beneficial to bring the printed version of either the slides or the outlines to class to use as class notes. Class Participation We place high value on class discussion and participation.<br><br> Remember that it is difficult to participate in class discussions if you have not prepared for the class by completing the pre-class reading assignment and working the suggested problems. If we do not get volunteers for our questions, we will call on students. Class Attendance Except for rare exceptions, classes meet for 50 minutes on Mondays and Wednesdays and 80 minutes on Tuesdays and Thursdays.<br><br> Fridays typically are reserved for group projects. Baylor University requires that you attend at least 75% of the scheduled class meetings. There are a total of 60 sessions in Accounting 4504, including all exams and presentation days.<br><br> Because of the importance of group work and in-class learning, you will find it difficult to pass if you miss many classes. You will be assigned a grade of cF d if you miss 16 or more sessions. If you know that you will not be in class and believe that you have a valid reason for an excused absence, present your request to us in writing before the absence.<br><br> Excused absences will be counted toward the limit of 15. Attendance will be checked at the beginning of each class. If you are late for class, it is your responsibility to see the professor after class to make sure you are not counted absent.<br><br> Because late arrivals disrupt the class, each second tardy will be counted as one absence. Date Session Topic Class Preparation After class Aug. 23 Res.<br><br> 0 Introduction to Professional Research W&R Chapter 1 See class preparation for Research 1. Aug. 24 Mgr.<br><br> 1 Managerial accounting An organization's value chain Management's planning and control cycle Read Horngren, Chapter 1. See class preparation for Managerial 2. Aug.<br><br> 25 Res. 1 Critical Thinking in Research W&R Chapters 1 and 2. Be prepared to discuss questions 1-4, 10- 11, 13-15 on pages 24-25.<br><br> See class preparation for Research 2. Aug. 26 Mgr.<br><br> 2 Cost terminology and classification Accounting for manufacturing costs Read Horngren, Chapter 2. Solve problem 2-29. Read problem 2-36.<br><br> Solve problem 2-36b. Due at the beginning of Managerial 3 class. Aug.<br><br> 30 Res. 2 Writing Skills for the Professional Accountant W&R Chapter 3. Study and prepare to respond to the questions on p.<br><br> 37. Take the writing quiz on the J drive. See class preparation for Research 3.<br><br> Aug. 31 Mgr. 3 Job costing Tracing direct costs to products Allocating indirect costs to products Read Horngren, Chapter 4.<br><br> Solve problem 4-26. Read the Targon, Inc. problem.<br><br> Solve problem 4-41. Due at the beginning of Managerial 4 class. Sept.<br><br> 1 Res. 3 The environment of accounting research W&R Chapter 5 and 7 (pp. 92-97) Do FARS questions.<br><br> FARS questions due at the beginning of the Research 4 class. Sept. 2 Mgr.<br><br> 4 Activity-Based Costing (ABC) Activity-Based Management (ABM) Read Horngren, Chapter 5. Solve problem 5-38. Read problem 5-34.<br><br> Solve problem 5-35. Due at the beginning of Managerial 5 class. Sept.<br><br> 6 Res. 4 Sources of authoritative accounting literature Sources of authoritative auditing literature Sources of tax literature Refining the research process W&R Chapter 6 FARS questions due. (Group) Discuss Recourse?<br><br> Of Course; be prepared to discuss in class. (Individual) Complete the requirements for Recourse? Of Course!<br><br> The worksheet is due at the beginning of the Research 5 class. Sept. 7 Mgr.<br><br> 5 The master budget Responsibility accounting Read Horngren, Chapter 6. Solve problem 6-40, reqs. a-l.<br><br> Solve problem 6-40, req. m. Due at the beginning of Managerial 6 class.<br><br> Sept. 8 Res. 5 Research Tools and Methodology W&R Chapters 4, 7 (pp.<br><br> 83-91; 97-100) Research worksheet for Recourse? Of Course! due.<br><br> See pre-class assignment for Research 6. Sept. 9 Mgr.<br><br> 6 The cash budget Read Horngren, Chapter 6 Appendix, pp. 195-200. Solve problem 6-35.<br><br> Read the Shilow Company problem. Solve problem 6-38 as a group project. One solution per group is due at beginning of Managerial 7 class.<br><br> Date Session Topic Class Preparation After class Sept. 13 Res. 6 Continuation of Research Tools and Research Methodology W&R Chapter 8.<br><br> (Group) Work on assigned research case in class. (Group) Work on assigned research case. The written research memorandum and work sheet are due at the beginning of Audit 1 class.<br><br> Sept. 14 Mgr. 7 The master budget See class preparation for Managerial 8.<br><br> Sept. 15 Res. 7 Research practicum First Exam (take home) Study all relevant chapters in W&R.<br><br> Prepare assigned case study for group presentations. Complete take-home examination. Due at the beginning of the Audit 2 class.<br><br> Sept. 16 Mgr. 8 Flexible budgets Flexible budget variances and sales volume variances Standards and variances for direct costs Performance measurement using standards Read Horngren, Chapter 7.<br><br> Solve problem 7-23. Read problem 7-27. Solve problem 7 340.<br><br> Due at the beginning of Managerial 9 class. Sept. 20 Audit 1 The Audit Process Revisited Memo and worksheet from Research 7 due (Individual assignment).<br><br> Study diagrams attached to lesson plan; scan Messier Chapters 3-5 See class preparation for Audit 2. Sept. 21 Mgr.<br><br> 9 Standards and variances for indirect costs Allocation of fixed overhead costs to products Read Horngren, Chapter 8. Solve problem 8-23. Read the Tredoc Co.<br><br> problem. Prepare for Exam 1. Sept.<br><br> 22 Audit 2 The Audit Process Revisited. Take diagnostic test on Blackboard, record results, and bring them to class. Research take-home due.<br><br> See class preparation for Audit 3. Sept. 23 Mgr.<br><br> Managerial Exam 1 Sept. 27 Audit 3 The Effect of Information Technology on the Audit Function Read Messier, Chapter 7, AU 319. Problems 7-25, 7-27, 7-29.<br><br> Due at the beginning of the Audit 5 class session. Sept. 28 Mgr.<br><br> 10 Sales variances Read Horngren, Chapter 14, pp. 496-503. Read problems 14-32 and 14-33.<br><br> Solve problems 14-34 and 14-35. Due at the beginning of Managerial 11 class. Sept.<br><br> 29 Audit 4 The Effect of Information Technology on the Audit Function Read Messier, Chapter 7, AU 319. Problems 7-25, 7-27, 7-29. Due at the beginning of the Audit 5 class session.<br><br> Sept. 30 Mgr. 11 Absorption costing and variable costing The variable costing income statement Read Horngren, Chapter 9.<br><br> Skip the section on throughput costing. Solve Solve problem 9-41. Omit req.<br><br> 5. Due at the beginning of Managerial 12 class. The effects of sales and production on operating income problem 9-18.<br><br> Read problem 9-30. Date Session Topic Class Preparation After class Oct. 4 Audit 5 Sampling for Substantive Tests of Balances: General Concepts Read Messier Chapter 9, focusing on pp.<br><br> 334-340; 350-353. Read AU 350. (Group) Discuss questions pertaining to sampling that are attached to this lesson plan.<br><br> Be prepared to discuss questions in class. Prepare solutions to attached sampling questions. Solve Problem 9-24 in Messier.<br><br> Both are due at the beginning of Audit 6 class. Oct. 5 Mgr.<br><br> 12 Cost-volume-profit analysis Read Horngren, Chapter 3. Solve problems 3-39 and 3-40. Read problem 3-41 and the Hall Company problem.<br><br> Solve problem 3-36. Due at the beginning of Managerial 13 class. Oct.<br><br> 6 Audit 6 Sampling for Substantive Tests of Balances: Classical estimation techniques. Read Messier Chapter 9, focusing on pp. 353-359.<br><br> Sampling questions from Audit 5 and problem 9-24 due today. Solve Problem 9-25. Due at the beginning of Audit 7 class.<br><br> Oct. 7 Mgr. 13 Relevant costs and revenues for decision making Opportunity costs Capacity constraints Read Horngren, Chapter 11.<br><br> Solve problems 11-31 and 11-33. Read the Exotic Products Company problem. Solve problem 11-29.<br><br> Due at the beginning of Managerial 14 class. Oct. 11 Audit 7 Sampling for Substantive Tests of Balances: Monetary-unit sampling Read Messier Chapter 9, focusing on pp.<br><br> 340-353. Answer questions on monetary- unit (PPS) sampling behind learning plan. Solve Problem 9-21, 9-22.<br><br> Both of these as well as the PPS questions are due at beginning of Audit 8 class. Oct. 12 Mgr.<br><br> 14 Make-or-buy decisions Special order decisions Solve problem 11-37. Read the Vernom Corporation problem. See class preparation for Managerial 15.<br><br> Oct. 13 Audit 8 Auditing the Revenue Cycle Read Messier, Chapter 10, AU 330, 342, CON 5, CON 6. Solve Problems 10-24 and 10-25.<br><br> Due at the beginning of Audit 9 class. Oct. 14 Mgr.<br><br> 15 Pricing decisions Target costing Read Horngren, Chapter 12. Solve problems 12-24 and 12-28. Read problem Prepare for Exam 2.<br><br> Life-cycle budgeting 12-38. Oct. 18 Audit 9 Auditing the Revenue Cycle Same as Audit 8.<br><br> Problems 10-24 and 10-25 due. Solve Problem 10-28. Due at the beginning of Audit 10 class.<br><br> Oct. 19 Mgr. Managerial Exam 2 Oct.<br><br> 20 Audit 10 Auditing the Revenue Cycle Same as Audit 8. Problem 10-28 due. Solve Problem 10-30.<br><br> Due at the beginning of Audit 11 class. Oct. 21 Mgr.<br><br> 16 The costs associated with the quality of a company 9s goods or services Evaluation of quality improvements Read Horngren, Chapter 19, pp. 653-663. Write a one-page letter on poor quality you experienced.<br><br> Turn in 2 copies. Solve problem 19-18. Read problem 19-27.<br><br> Critique peer Quality Letter. Due at the beginning of Managerial 17 class. Date Session Topic Class Preparation After class Oct.<br><br> 25 Audit 11 Second Exam--Auditing Oct. 26 Mgr. 17 Time as a competitive weapon The theory of constraints Read Horngren, Chapter 19, pp.<br><br> 663-672. Solve problems 19-23 and 19-24. Read problems 19-25, 19-26, and 19-38.<br><br> Solve problem 19-35. Due at the beginning of Managerial 18 class. Oct.<br><br> 27 Audit 12 Auditing the Purchasing Process Read Messier Chapter 11, pp.423-443. Solve Problems 11-23, 11-24. Due at beginning of Audit 13 class.<br><br> Oct. 28 Mgr. 18 The time value of money Capital budgeting.<br><br> Read Horngren, Chapter 21. Solve problems 21-18 and 21-19. Read problem 21-23 and the City of Los Angeles problem.<br><br> Solve problem 21-27, req. 3. Due at the beginning of Managerial 19 class.<br><br> Nov. 1 Audit 13 Auditing the Purchasing Process Read Messier Chapter 11, pp. 443-453.<br><br> Problems 11-23, 11-24 due. Solve Problem 11-26. Due at beginning of Audit 14 class.<br><br> Nov. 2 Mgr. 19 The total-project approach and the differential approach to capital-budgeting decisions Solve problem 21-28, req.<br><br> 2. Read problem 21-35. Solve problem 21-32.<br><br> Due at the beginning of Managerial 20 class. Nov. 3 Audit 14 Auditing the Inventory Management Process Read Messier Chapter 13, pp.<br><br> 487-499 Problem 11-26 due. Solve Problem 13-27. Due at beginning of Audit 15 class.<br><br> Nov. 4 Mgr. 20 Ethics Discussion Nov.<br><br> 5 ALL Roundtable on Integrity in Financial Reporting Cashion 5 th floor 3 1:30 3 3 p.m. There will be questions on auditing exam Nov. 8 Audit 15 Auditing the Inventory Management Process Read Messier Chapter 13, pp.<br><br> 499-508 Solve Problems 13-28, 13-30. D ue at Problem 13-27 due beginning of Audit 16 class. Nov.<br><br> 9 Mgr. 21 Capital budgeting See class preparation for Managerial 22. Nov.<br><br> 10 Audit 16 Auditing Selected Asset Accounts Read Messier Chapter 14, pp. 521-531 Problems 13-28, 13-30 due. Solve Problem 14-28.<br><br> Due at beginning of Audit 17 class. Nov. 11 Mgr.<br><br> 22 Management control systems Decentralization Transfer pricing Read Horngren, Chapter 22. Solve exercise 22-20. Read exercises 22-25 and 22-26.<br><br> Solve problem 22-27. Due at the beginning of Managerial 23 class. Date Session Topic Class Preparation After class Nov.<br><br> 15 Audit 17 Completing the Engagement Read Messier Chapter 17 Solve Problems 17-22, 17-25, 17-28. Due at beginning of Audit 19 class day. Nov.<br><br> 16 Mgr. 23 Transfer pricing Solve exercise 22-23. Prepare for Exam 3.<br><br> Nov. 17 Audit 18 Reports on Audited Financial Statements Read Messier Chapter 18. Solve Problems 18-24, 18-28.<br><br> Due at beginning of Audit 20 class day. Nov. 18 Mgr.<br><br> Managerial Exam 3 Nov. 22 Audit 19 Reports on Audited Financial Statements Same as Audit 18. Problems 17-22, 17-25, 17-28 due.<br><br> Solve Problems 18-29, 18-31. Due at beginning of Audit 20 class day. Nov.<br><br> 23 Mgr. 24 Non-financial measures of performance The balanced scorecard Employee compensation and incentives Read Horngren, Chapter 13, pp. 445-453.<br><br> Read cThe Balanced Scorecard 4 Measures That Drive Performance. d Solve problem 13-29. Solve the Zenon Medical Instruments Company problem. Due at the beginning of Managerial 25 class.<br><br> Nov. 24-28 Thanksgiving Holidays Nov. 29 Audit 20 Reports on Audited Financial Statements See class preparation for Audit 21.<br><br> Nov. 30 Mgr. 25 Performance evaluation of an organization 9s Read Horngren, Chapter 23.<br><br> Omit the subunits Financial measures of performance sections on Economic Value Added and Performance Measurement in Multinational Companies. Solve problems 23-16 and 23-31. Read the Westex, Inc.<br><br> problem. Dec. 1 Audit 21 Reports on Audited Financial Statements Assurance, Attestation, and Other Services Read Messier Chapter 21.<br><br> Solve Problems 21-31, 21-32. Study them for final examination (not to turn in). Dec.<br><br> 2 4503/04 Live case study presentations Dec. 6 4503/04 Live case study presentations TBA Managerial Final Exam TBA Auditing Final Exam