AC3104 Course Outline AY20 - 21 S1
AC3104 Course Outline AY20 - 21 S1
AC3104 Course Outline AY20 - 21 S1
AC3104
RISK MANAGEMENT & ADVANCED AUDITING
_________________________________________________________________________
To sustain value, key executives and managers in corporations today recognize the need for
active engagement in setting objectives and overseeing programs associated with Enterprise
Risk Management (ERM). The first segment of the course provides an overview of risks that
can threaten the attainment of organizational objectives, and the ERM concepts, frameworks and
techniques for identifying, assessing and managing risks. Both the internal and external auditors
increasingly need to understand ERM to properly appreciate key risks, controls and governance
issues of the companies they audit.
The second segment of the course extends foundational auditing knowledge and techniques
covered in AC2104 Assurance and Auditing by examining advanced auditing concepts and
complex issues faced by auditors and assurance providers in current practice. Topics relevant to
aspiring audit professionals include the auditing of complex issues related to revenue recognition,
significant accounting estimates and group financial statements.
You will also be exposed to hands-on data analytics and data-mining application in the areas of
business risks, fraud risks and audit analytics.
2. Apply appropriate audit procedures to solve problems related to key advanced issues faced by
auditors;
3. Assess business risks, fraud risks and audit risks using data analytics and data-mining
techniques (including ACL Analytics software and R package in self-paced exercises); and
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Course Content
Key topics are organised within two key areas: Enterprise Risk Management (ERM) and
Advanced Auditing, Enterprise Risk Management topics covered include ERM framework and its
key components (governance & culture, objective-setting, performance, review & revision,
reporting) and special topics covering systems thinking, judgment biases, data analytics, and
ethical and catastrophic risk management. The Advanced Auditing segment covers auditing
complex accounting, revenue and group audit issues, fraud risk analytics, and current issues in
auditing,
Course Assessments
Formative Feedback
Feedback loop in central to learning, and skills and competence building. For Discussion
Participation, you will receive feedback on your positive attitude (paying attention and how actively
you participate in discussions) and how constructive and insightful are your contributions. For
Team Presentation, formative feedback comprises how impactful is your presentation delivery,
how coherent and insightful is its content, and the level of teamwork displayed and audience
engagement. Constructive qualitative feedback will also be verbally provided during the Q&A
segment of the presentation. For In-Class Exercises, you will receive feedback on your
demonstrated ability to apply tools to analyse issues and solve problems.
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1. Discussion Participation in Seminars
Discussion participation can be in the form of a question, response, or comment. Good
performance in seminar discussion participation requires excellent preparation and reflection, as
well as good critical thinking, listening and social interpersonal skills. It also reflects an eagerness
to learn from others, and to share one’s thoughts and ideas with others. Both the quality and
frequency of contributions during seminars will be considered in assessing seminar discussion
participation. Students whose videos are switched off during a virtual classroom seminar will be
presumed and graded as absent.
Team members are expected to contribute actively and benefit from one another’s collective
efforts. Do flag out free-riding to the instructor and if the problem persists despite corrective
intervention by team members and/or instructor, disciplinary repercussions may include grade
penalty and/or other consequences correspond to the severity of the misbehaviour. Thus, the
overall mark for a team member is subject to downward moderation based on the team’s peer
evaluation. For example, if a member’s average rating does not exceed 3, 4 or 5 on a scale
ranging from 1 to 10, the member will receive 30%, 50% or 80% of the overall mark awarded to
team presentation respectively. A score exceeding 5 is commensurate with 100% of the overall
mark awarded.
Each member should complete an online peer assessment via eUreka within two days after the
presentation (see rubric in Appendix C).
5. Final Examination
Students’ problem-solving skills, and application of concepts and knowledge relating to risk
management and auditing will be assessed in either an open-book or closed-book examination –
to be advised later.
(1) General
You are expected to complete all assigned pre-class readings and activities, attend all seminar
classes punctually and take all scheduled assignments and tests by due dates. You are expected
to take responsibility to follow up with course notes, assignments and course related
announcements for seminar sessions you have missed. You are expected to participate in all
seminar discussions and activities.
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(2) Absenteeism
Absence from class without a valid reason will affect your overall course grade. Valid reasons
include falling sick supported by a medical certificate and participation in NTU’s approved activities
supported by an excuse letter from the relevant bodies. You must email your course instructor the
supporting document for your absence.
Academic Integrity
Good academic work depends on honesty and ethical behaviour. The quality of your work as a
participant relies on adhering to the principles of academic integrity and to the NTU Honour Code,
a set of values shared by the whole university community. Truth, trust and justice are at the core
of NTU’s shared values.
BMST Bell, Timothy, Frank Marrs, Ira Solomon, and Howard Thomas. 1997. Auditing
Organizations Through a Strategic-Systems Lens. New York: KPMG Peat Marwick
LLP. [Selected Excerpts]
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COSO6 The Committee of Sponsoring Organizations of the Treadway Commission (COSO).
2012. Avoiding Judgment Traps and Biases.
ACRA APB Audit Practice Bulletins are issued by Accounting and Corporate
Regulatory Authority Singapore (ACRA), available at:
https://www.acra.gov.sg/public-accountants/professional-
resources/audit-practice-bulletins
ACRA PMP ACRA Practice Monitoring Programne (PMP) Public Reports are available
at:
https://www.acra.gov.sg/training-and-
resources/publications/reports/practice-monitoring-programme-public-
reports
ISA Guide Guide to Using International Standards on Auditing in the Audits of Small-
and Medium-Sized Entities, Third Edition, issued by The International
Federation of Accountants (IFAC): https://www.ifac.org/publications-
resources/guide-using-international-standards-auditing-audits-small-and-
medium-sized-en
Course Instructors*
Office
Instructor Phone Email
Location
GOH Kia Hong S3-B2B-67 6790-6889 kiahong@ntu.edu.sg
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Weekly Schedule
Date Week Topics Learning Objectives Course Readings
2020 LO
13 & 14 1.2 ERM Overview, Understand ERM and explain its key concepts LO 1 CERMSP 1-5,
Framework & ISO
Systems Differentiate key components of ERM framework
Thinking Apply systems thinking to ERM
17 & 18 2.1 Governance & Illustrate key principles of G&C, and explain why LO 1 CERMSP 6
Culture (G&C) it is the foundation of ERM
Differentiate between hard and soft controls and
demonstrate their complementary relationship
20 & 21 2.2 Judgment Traps Distinguish common judgment biases and apply LO 1&2 Self-paced
& Biases de-biasing methods to mitigate them Learning 1
& Quiz 1
24 & 25 3.1 Strategy, Analyse business context and explain objective- LO 1 COSO1,
Objective Setting setting as a precondition to risk identification CERMSP 7
& Risk Appetite
Articulate risk appetite and design risk tolerances
as a risk calibration tool to optimize performance
Integrate ERM from top to bottom, and develop
strategies aligned with corporate mission,
objectives and risk appetite
27 & 28 3.2 Performance 1: Identify and appraise the strategic implications of LO 1 BMST,
Strategic Risk events to the entity COSO2 & 3,
Identification CERMSP 8
Apply and evaluate strategic risk identification
techniques
Explain emerging, supply chain, third party and
sustainability risks, and illustrate their effects on
value creation process
Aug/Sep 4.1 Performance 2: Identify internal and external events affecting LO 1 COSO4,
31 & 1 Identifying Risks business process objectives CERMSP 8
in a Business
Process Apply and evaluate business process risk
identification techniques
Formulate and differentiate key performance
indicators (KPIs) vs. key risk indicators (KRIs)
3&4 4.2 P Performance 3: Apply risk assessment techniques from a LO 1&4 COSO5,
Risk Analysis, portfolio perspective CERMSP 8
Evaluation &
Treatment Explain strengths and weaknesses of
quantitative vs. qualitative risk assessment
techniques
Differentiate inherent, residual and target risks
Prioritise risks and prescribe appropriate risk
responses
7&8 5.1 Control Activities Develop sensitivity to, and evaluate ethical LO 1 SO
& Ethical Risk issues, stakeholder interests and fraud risks
Management
Understand and apply ethical principles to
resolve dilemmas in a corporate setting
Design control activities and fraud prevention
strategies, including whistle-blowing
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Date Week Topics Learning Objectives Course Readings
LO
Sep 5.2 Data Analytics 1 Understand big data analytics and text mining LO 3 Self-paced
10 & 11 Learning 2
Apply R to generate WordClouds and
perform sentiment analysis
14 & 15 6.1 P Monitoring, Differentiate the roles of the Board, the Audit LO 1&4 CGC,
Review & Committee, the internal auditor, the external CERMSP 9
Revision auditor and other stakeholders in on-going and
separate monitoring
Challenge, rethink and redesign existing
business model, process and risk management
system in response to dynamic changes
17 & 18 6.2 P Communication, Understand the role of IT governance in ERM, LO 1&4 CERMSP 10
Reporting & including management of information,
IT Risk communication, reporting, and cyber security
Management issues
Understand big data and the application of data
analytics to gain a competitive edge, including
its strengths and limitations
21 & 22 7.1 Data Analytics 2 Apply data mining techniques to detect LO 3 Self-paced
accounting fraud and assess business risk Learning 3
& Quiz 2
Understand the use of predictive analytics in R
Sep 28 to
Oct 2 Mid-Semester Recess
Oct 8.1 Concepts Integrate and apply ERM concepts LO 1 Case study
5&6 Integration & and pre-class
Application 1 hand-in
PMP Public
Reports
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Date Week Topics Learning Objectives Course Readings
LO
12 & 13 9.1 P Auditing Evaluate the challenges in auditing intangible LO 2&4 SSA 540
Complex assets and goodwill, related impairment (Revised)
Accounting judgements and other long-term liabilities
Issues 1 involving significant subjectivity Audit Practice
Bulletins
Design appropriate audit procedures to test the
primary financial statement assertions involving PMP Public
the above complex accounting issues Reports
Oct 9.2 P Auditing Complex Evaluate the challenges in auditing fair value LO 2&4 SAPN 1000
15 & 16 Accounting estimates, financial instruments and other
Issues 2 associated complex accounting estimates SSAE 3400
Describe the examination and reporting on
prospective financial information
19 & 20 10.1 Fraud Risk Perform fraud risk analytics using ACL Analytics LO 3 Self-paced
Analytics 1 software part 1 Learning 4
& Quiz 3
Appreciate the use of generalized audit
software
22 & 23 10.2 P Auditing Complex Describe the challenges in auditing the five-step LO 2&4 PMP Public
Revenue approach to revenue recognition Reports
Recognition
Issues 1 Design appropriate audit procedures to test the
primary financial statement assertions involving
complex revenue recognition transactions
26 & 27 11.1 Fraud Risk Perform fraud risk analytics using ACL LO 3 Self-paced
Analytics 2 Analytics software part 2 Learning 5
& Quiz 4
Understand the uses and limitations of data
analytics
29 & 30 11.2 Auditing Complex Describe the challenges in auditing complex LO 2&3 Practical
Revenue revenue recognition transactions such as long- Guidance
Recognition term contracts and contract modifications publications
Issues 2
Evaluate the complexity in the audit of lease Data analytics
transactions in-class
Acquire the ability to apply data analytics exercise
features in ACL software to assess business
and audit risks, interpret data analytics results
and design follow-up tests
Nov 12.1 P Auditing of Group Appraise the special considerations in the audit LO 2&4 SSA 600
2&3 Financial of group financial statements
Statements 1 Audit Practice
Identify significant components and determine Bulletins
the extent of reliance to place on component
auditors’ work
Determine materiality levels at both overall
group financial statement and component
financial statement levels.
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Date Week Topics Learning Objectives Course Readings
LO
Nov 12.2 P Auditing of Group Develop the ability to assess the risks of LO 2&4 PMP Public
5&6 Financial material misstatement and determine if Reports
Statements 2 sufficient appropriate audit evidence has been
obtained in relation to the consolidation process
and the financial information of components on
which to base the group audit opinion
Evaluate the complexity in audit of group
financial statements, including purchase price
allocation, goodwill and components with
financial information not prepared in accordance
with the financial reporting framework
9 & 11 13.1 Current Issues in Describe the current issues being deliberated LO 2 Self-paced
Auditing by standard setters Learning 6
& Quiz 5
Evaluate the considerations and challenges in
determining matters to be discussed in the Key SSA 701
Audit Matters paragraph in the audit report
Describe the key considerations and challenges SSAE 3000
in performing assurance on emerging forms of and 3410
external reporting (EER), such as assurance on
sustainability and integrated reports Audit Practice
Explain the use of analytics in audit Bulletins
Key: P = Oral presentation seminars
SO = Refer to readings in Seminar Outline
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Appendix A: Discussion Participation Rubric
Performance Levels
Grading Weightage Below Meets Exceeds
Criteria Expectations Expectations Expectations
Ratings: 1 ‐ 4 Ratings: 5 – 7 Ratings: 8 ‐ 10
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Appendix B: Communication (Oral Presentation) Rubric
Learning Objective: The ability to communicate well with others verbally so that it clearly expresses
the intended message and is understandable and useful to the receiving party.
Substantially Developed
Not Yet Demonstrates good team work and seamless
No team work demonstrated. delivery.
Substantially Developed
Not Yet Free of errors in grammar and pronunciation;
Grammar, pronunciation and word choice are good choices of word enhance clarity of
deficient. Vocal delivery is too soft or too fast expression. Vocal delivery is varied and
to understand; gap-fillers interfere with dynamic. Speech rate, volume, and tone
expression. facilitate audience comprehension. Minimal gap
fillers.
Eye contact, posture, gestures, movement and
facial expressions are inappropriate and Eye contact, posture, gestures, movement and
significantly distracting. facial expressions make the presentation
compelling, and speaker appears polished and
confident.
Evaluation: Not Yet 1 2 3 4 5 6 7 8 9 10 Substantially Developed
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Appendix C: Confidential Peer Evaluation
Teamwork & Interpersonal Skills (Peer Evaluation) Rubric
Learning Objective: The ability to work effectively with others in a group setting.
Traits Performance
Scant Substantially Developed
1. Roles and Responsibility (RR)
Unclear about his/her own role; refuses to take a role in the group; Always fulfills responsibilities; performs his/her role within the group with
Behaves professionally by upholding insists to work individually and has limited coordination or enthusiasm and demonstrates willingness to work collaboratively.
responsibility and assuming accountability for self communication with others.
and others in progressing towards the team’s
Evaluation: Scant 1 2 3 4 5 6 7 8 9 10 Substantially Developed
goal.
Scant Substantially Developed
2. Communication (CM)
Modes of communication are not appropriate, causing confusion and Modes of communication are appropriate, and maintaining timely
Identifies appropriate mechanisms to coordinate miscommunication among team members. communication and correspondence with team members.
and correspond with team members.
Evaluation: Scant 1 2 3 4 5 6 7 8 9 10 Substantially Developed
Scant Substantially Developed
3. Conflict Resolution (CR)
Does not recognize conflicts or is unwilling to resolve conflicts. Consistently resolves conflicts through facilitating open discussion and
Resolves conflicts using a variety of approaches. compromise.
Evaluation: Scant 1 2 3 4 5 6 7 8 9 10 Substantially Developed
Scant Substantially Developed
4. Contributions (CT)
Largely disinterested in working in a group and refuses to participate; Actively attends and participates in all activities and provides meaningful
Contributes positive input for the team; observes passively or is unwilling to share information with other team contribution in articulating ideas and opinions.
effectively utilizes one’s knowledge and members.
expertise.
Evaluation: Scant 1 2 3 4 5 6 7 8 9 10 Substantially Developed
Scant Substantially Developed
5. Relationship (RS)
Rarely listens to others and does not acknowledge the opinions that Engages in respectful relationships with all other members in the team.
Maintains cooperative interaction with other differ from his/her own. Embraces and accepts diverse points of view without prejudice.
team members regardless of individual /cultural
Evaluation: Scant 1 2 3 4 5 6 7 8 9 10 Substantially Developed
differences and respects diverse perspectives.
References:
Teamwork Value Rubric ‐ Association of American Colleges and Universities. Retrieved from http://www.aacu.org/value/rubrics/pdf/teamwork.pdf
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Appendix D: Data Analytics (Problem-Solving & Decision-Making) Rubric
Learning Objective: To develop data analytics skill to identify, assess and respond appropriately to
audit and business risks
Traits Performance
Key:
Your performance is assessed based on a scale, ranging from 0 (scant) to 100 (substantially
developed).
Scant = Not able to adequately demonstrate the specific learning trait.
Substantially Developed = Able to adequately demonstrate the specific learning trait.
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