Syllabus, Schedule, and Teaching Philosophy

• Syllabus and Schedule

• Teaching Philosophy
• Changing Nature of the Auditing Profession

Syllabus and Schedule

Teaching Philosophy

I consider it a privilege to have you in my class and I want to do everything I can to help you learn and succeed in auditing and, more importantly, life. I have found my students to be a wonderful source of great ideas on how to make my courses better, so please don't hesitate to share with me your ideas on what I can do to improve the class. As a word of warning, auditing is much more "touchy feely" than other accounting classes and you will tend to think you are "okay" when you really need to be studying more. So... please don't lull yourself into thinking that you can cram right before the exam and do well. That probably is not going to happen! I want to make myself available to you if you need me for any reason. Good luck and I am looking forward to having a wonderful semester with you. By the way, did you know that Vince Lombardi said "Good luck is when preparation meets opportunity?"

On the Changing Nature of the Auditing Profession

Throughout the 1970s and 1980s, the profession focused much of its R&D effort on fine-tuning its audit production processes - processes directed primarily at the selective testing of the details of accounting transactions-to enhance efficiency. Such fine-tuning is exactly what one would expect in a mature market with members that produce a commodity product of service. During the 1990s, the profession has embarked on what I believe is a major transformation of its core service. As we have heard over and over again, the primary catalyst behind this transformation is the quantum leap in communications technologies that are transforming the very nature of human interaction. Organizations are employing new technologies to connect electronically the various information activities embedded in their business processes, and to connect electronically with agents outside of the organization, such as suppliers, regulators, and customers.

These electronic connections enable organizations to reduce frictions that impede the flow of information (i.e., increase efficiencies), and enable organizations to reach beyond local markets to a global market.

Electronic connectivity presents several challenges to the external auditor. First, it increased the speed and frequency of changes within the global web of economic activities. Second, it threatens the very viability of the plethora of entities whose primary roles have been various forms of information intermediation, i.e., forms of connectivity that are rapidly becoming obsolete. Third, the traditional paper-based details that have served the external auditor as documentation supporting the accounting for routine business transactions, i.e., traditional forms of "corroborating evidence," are rapidly disappearing. A more dynamic world-wide economic system, coupled with the disappearance of paper audit trails, has prompted assurance providers to shift the focus of their R&D efforts away from further fine-tuning their selective transactions testing processes and toward the development of new approaches for evaluating the representational faithfulness of the entity's financial statements - approaches that guide the auditor's development of in-depth knowledge about client business risks and the reliability of the business and information systems used to manage those risks.

Peat Marwick Mitchell

My comments: The 2000's are witnessing what will be a change in how companies in general, and the accounting profession in particular, do business. The post-Enron environment has already witnessed massive change in how corporate governance of America works, and implementation of Sarbanes/Oxley legistration will impact the nature, services, and regulation of accounting firms. Although there are immense negative impacts from Enron, WorldCom, Xerox, Tyco, HealthSouth, etc, the silver lining is that EVERYONE now realizes the critical importance of accounting information and crucial role auditing plays in maintaining the very existence of the capitalistic model underlying our economy.