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Course Title:
Introduction
Rutgers Business School is introducing a certificate in “analytic auditing” in conjunction with its
Master of Accountancy in Financial Accounting (MAccy) Program1. This certificate program can
fulfill a dual purpose. MAccy students may specialize in the area taking these courses as electives,
while non-matriculated students may take the four-course certificate independently.
Background
For reasons that are well known, there is a renewed focus on audit quality in the CPA profession.
The PCAOB regulatory regime, the formation of the Center for Audit Quality (CAQ), initiatives at
major firms, and other indicators attest to this. The profession is more focused on more effective
audit methodologies than it has been for decades.
The development of new methodologies needs to be preceded by basic and applied research that
establishes a sound theoretical foundation and demonstrates that they will work. The need for such
research represents an opportunity for universities to work with audit firms, software vendors and
others.
The following are examples, in no particular order, of the types of areas that are likely to prove
fruitful in the field of analytical auditing: Analytical procedures, Other data Analytics, Continuous
Auditing Integration, Audit Risk/Assurance Model, Elicitation, quantification and expression of
professional judgment, Audit optimization, Fraud detection processes, Systems analysis and
internal control evaluation and Smart navigation of GAAP
The module does not primarily focus on the technical aspects of analytic methods, though these
topics will be discussed largely in the context of case examples: thus, the emphasis is on the usage
of statistics and the interpretation of results rather than the mathematics of specific tools and
techniques.
Course Structure
This course is an online course, so there is not specific class hour for this course. Classes will be
organized by weeks. Course materials as well as discussion topics will be posted online at the
beginning of each week; you can study the course materials and participate in the discussion at any
time during the week. You can access the course materials under your individual student accounts
1
http://business.rutgers.edu/finmaccy/
2
Class Participation:
Online chat room is the primary way for the students to communicate with instructions and
each other. Class participation will be evaluated according students’ participation in each
week’s discussion. Students can participate in the discussion by answering instructor’s
questions, posting their own questions, and answering the other students’ questions in the
discussion board in e-college. Both the quality and quantity of the questions and answers
will be assessed.
Assignments: There
will be 3 individual assignments throughout the semester (Please see the distribution dates
and due dates of assignments in course outline). The assignments will require you to do
some analytic tasks using the tools covered in class. All homework assignments must be
prepared using a word processor and uploaded to e-college prior to the deadline.
Course project:
The topic of course project can be of your choice but it would be related to the class topics.
Each course project will “lead” / present a course topic through a presentation of maximum
20 minutes. Students can choose to do the course project individually or in groups. I
encourage students to self-organize into groups of up to 3 students to do the course project.
Each group/student will be scheduled a time slot to make their presentation. During the
scheduled time slots student should make their presentations using “Classlive” tool in e-
college. I will evaluate the presentations based on content, organization, originality, and
delivery.
Final exam:
3
The final exam will be a remote exam and last for three hours: the exam will be sent to
students via email, and students need to send back their exams in three hours. For exams
you will be responsible for the material covered in the lecture slides, projects and class
discussions. Exams will include six essay questions; students need to choose four of them
to answer. All the students are expected to take the final exam at the same time. If a student
has valid excuse which complies with University regulations for missing an examination,
the student must inform me and obtain permission to miss the examination before the
examination. Failure to obtain the necessary permission will result in a zero grade.
Course Outline
Due to the state-of-the-art nature of the course versions of the materials and slides will be updated
during the course.
Lecture Outline Material Authors
1 Introduction Super Crunchers – Miklos
Ian Aires Vasarhelyi
09/09- Competing on analytics
09/15
Big data
Competing on Qi Liu
Data Analytics in auditing & Continuous
Analytics: The
auditing (application areas, evolving
New Science of
approaches, and benefits)
Winning- Thomas
H. Davenport and
Jeanne G. Harris
2 Audit Analytics related software & tools Qi Liu,
09/16- Audit software (ACL/IDEA)
09/22
Statistical packages (R, WEKA…)
3 Audit Analytics in preliminary analytical Sample data Qi Liu
procedures (I)
09/23-
09/29 Descriptive statistics (demonstration
using R)
4 Audit Analytics in preliminary analytical Qi Liu
procedures (II)
09/30-
10/06 Data Visualization (demonstration using
R)
Assignment 1
5 Audit Analytics in preliminary analytical Sample data Qi Liu
procedures (III)
10/07-
10/13 Basic data analysis (demonstration using
ACL)
Stratify & Classify
Summarize & Age analysis
Exam sequence & Look for gap
4