Unit information: Taxation and Auditing in 2011/12

Unit name	Taxation and Auditing
Unit code	EFIM30008
Credit points	20
Level of study	H/6
Teaching block(s)	Teaching Block 4 (weeks 1-24)
Unit director	Mr. Ricky Tutin
Open unit status	Not open
Pre-requisites	EFIM20001 Financial Accounting 2
Co-requisites	None
School/department	School of Economics, Finance and Management
Faculty	Faculty of Social Sciences and Law

Description including Unit Aims

A theoretical approach to the practical underpinnings of taxation and auditing will be adopted which will have significance to both international and domestic students.

The Taxation component considers the economic consequences and desirable features of a taxation system, explores the approaches adopted in the UK for taxation of personal income, corporate income and capital transactions and explores tax planning opportunities.

The Auditing component begins with sampling methods, judgement of materiality and other auditing procedures. Then it moves on to investigation of independence, regulation and the legal environment. Finally the focus moves to the auditing industry, auditing market and users of the auditing service.

Intended Learning Outcomes

1. Discuss how taxation may influence decision-making;
2. Explain, apply and evaluate the principles of income taxation;
3. Explain, apply and evaluate the principles of Corporation Tax;
4. Explain, apply and evaluate the principles of Capital Taxation;
5. Illustrate how transactions can be structured so as to minimise income or corporation tax liabilities;
6. Explain the principles underlying audit operations;
7. Explain the significance of the concept of materiality;
8. Explain the meaning and significance of auditor independence, discuss the threats to independence and how they might be overcome;
9. Use suitable case law to illustrate the responsibilities of auditors and how these have developed over time;
10. Discuss current debates in auditing and possible trends of topical issues.

Teaching Information

Lectures plus small-group tutorials

Assessment Information

Summative assessment: Three-hour closed-book examination in the Summer term: 100% to assess students’ abilities to:

1. Discuss how taxation may influence decision-making;
2. Explain, apply and evaluate the principles of income taxation;
3. Explain, apply and evaluate the principles of Corporation Tax;
4. Explain, apply and evaluate the principles of Capital Taxation;
5. Illustrate how transactions can be structured so as to minimise income or corporation tax liabilities;
6. Explain the principles underlying audit operations;
7. Explain the significance of the concept of materiality;
8. Explain the meaning and significance of auditor independence, discuss the threats to independence and how they might be overcome;
9. Use suitable case law to illustrate the responsibilities of auditors and how these have developed over time;
10. Discuss current debates in auditing and possible trends of topical issues.

Formative assessment:

Tax component: Ten exercises and associated tutorials contributions to assess students’ abilities to:

• Discuss how taxation may influence decision-making;
• Explain, apply and evaluate the principles of income taxation;
• Explain, apply and evaluate the principles of Corporation Tax;
• Explain, apply and evaluate the principles of Capital Taxation;
• Illustrate how transactions can be structured so as to minimise income or corporation tax liabilities.

Auditing component: Five exercises and associated tutorials contributions to assess students’ abilities to:

• Explain the principles underlying audit operations;
• Explain the significance of the concept of materiality;
• Explain the meaning and significance of auditor independence, discuss the threats to independence and how they might be overcome;
• Use suitable case law to illustrate the responsibilities of auditors and how these have developed over time;
• Discuss current debates in auditing and possible trends of topical issues.

Reading and References

Variable from year to year as Taxation legislation and Auditing Standards are updated.

Indicative reading at time of unit proposal:

• “Taxation Policy and Practice”, Andy Lymer and Lynne Oats, Fiscal Publications, 16th edition 2009/2010
• “Taxation: incorporating the 2009 Finance Act”, Richard Andrews, Alan Combs and Peter Rowes, Fiscal Publications, 28th edition 2009
• “Current Issues in Auditing”, Sherer and Turley, Sage
• “The Audit Process”, Iain Gray and Stuart Manson, Cengage, 4th edition 2008
• Various journal articles.
• Selected legal cases against auditors.