ACC-640 at Southern New Hampshire University is a graduate course that SNHU describes as a study of the concepts and methods of professional auditing.
Students explore the various aspects of completing an audit engagement: applying industry frameworks and governing standards to the audit planning process, applying audit strategies that take account of risk assessment and internal controls, and preparing standard audit reports based on substantive testing, fieldwork and evidence that meets regulatory compliance standards.
It appears in SNHU's MS in Accounting, its graduate accounting certificate and the information systems and controls pathway of its CPA certificate.
Auditing is a change of perspective for many students. Instead of preparing financial statements, you are asking whether someone else's statements can be trusted, and you must justify every conclusion with evidence. The hardest skill is linking each identified risk to a specific procedure, and each procedure to the assertion it tests.
Course at a Glance
| Item | Details |
|---|---|
| University | Southern New Hampshire University (SNHU) |
| Course code | ACC-640 |
| Level | Graduate |
| Subject area | External auditing and assurance |
| Programs | MS Accounting, graduate accounting certificate, CPA certificate (ISC pathway) |
| Typical work | Audit planning memos, risk assessments, procedure design, draft audit reports |
What ACC-640 Covers
| Stage (from SNHU's description) | What it involves |
|---|---|
| Planning under frameworks and standards | Understanding the client and industry, setting materiality, applying AICPA or PCAOB standards as relevant |
| Risk assessment and internal controls | Identifying risks of material misstatement, evaluating controls, choosing an audit strategy |
| Substantive testing and fieldwork | Analytical procedures and tests of details that gather sufficient appropriate evidence |
| Reporting | Forming an opinion and drafting a standard audit report |
Key Concepts Explained
The Audit Risk Model
Audit risk is the risk of giving the wrong opinion on materially misstated statements. It is often expressed as inherent risk x control risk x detection risk. When inherent and control risk are high, the auditor reduces detection risk by doing more, or more precise, substantive work.
Materiality
Materiality is the size of misstatement that could change a reasonable user's decision. Auditors commonly start from a benchmark, such as a percentage of pre-tax income or revenue, then apply judgment.
Example: A stable, profitable company reports pre-tax income of $4 million. Using a 5% benchmark gives overall materiality of $200,000. The team then sets performance materiality lower, say $150,000, to allow for undetected errors across many accounts.
Linking Risks, Assertions and Procedures
Each risk relates to a management assertion such as existence, completeness or valuation. The procedure must test that assertion. Confirming receivables with customers tests existence; searching for unrecorded liabilities after year end tests completeness.
Example: Risk: sales recorded before goods are shipped to meet targets. Assertion: cut-off and occurrence. Procedure: select sales recorded in the last week of the year and the first week of the next, and compare invoice dates with shipping documents.
Typical Assignments and How to Approach Them
| Assignment type | What it tests | How to approach it |
|---|---|---|
| Planning memo | Understanding the client and setting materiality | Explain the benchmark and why it suits the entity |
| Risk assessment | Identifying significant risks | Tie each risk to an account and assertion |
| Audit program | Designing procedures | One risk, one assertion, one or more targeted procedures |
| Audit report draft | Choosing and wording an opinion | Base the opinion type on the evidence and misstatements found |
Choosing the Right Audit Opinion
The final stage of an engagement is often the part of an ACC-640 assignment students rush, yet the choice of opinion follows a clear logic. An unmodified opinion means the statements are fairly presented in all material respects.
If misstatements are material but not pervasive, or the auditor cannot obtain evidence for one significant area, the result is usually a qualified opinion. If misstatements are both material and pervasive, the opinion is adverse; if the inability to obtain evidence is pervasive, the auditor disclaims an opinion.
Example: Overall materiality is $200,000. The client refuses to write down obsolete inventory of $350,000, but every other area is fairly stated. The misstatement is material and confined to one account, so a qualified opinion is appropriate, with a basis-for-opinion paragraph explaining the inventory issue.
When you draft a report, state the facts that drove your choice and connect them to materiality and pervasiveness.
Where Students Get Stuck
- Generic procedures. "Test revenue" is not a procedure. Say what you will select, compare and conclude.
- Risks without assertions. Every risk should name the assertion at stake.
- Confusing controls tests with substantive tests. Tests of controls check that a control works; substantive tests check the balance.
- Wrong opinion type. Material but not pervasive misstatement usually leads to a qualified opinion, not an adverse one.
Study Tips for ACC-640
- Build a table of assertions with two example procedures each.
- Know when AICPA standards apply (private entities) and when PCAOB standards apply (public companies).
- Read a few real audit reports to see the standard wording and structure.
- Write every procedure so another auditor could perform it from your description.
How We Help with ACC-640
Send the case, any workpaper templates, the rubric and instructor feedback. A writer with audit experience can prepare a worked planning memo or audit program, explain the risk logic, or review your draft for gaps. For other accounting modules, see our accounting assignment help guide.
GradeEssays is independent of Southern New Hampshire University. Our models are study aids: use them to understand audit reasoning, then complete and submit your own work under SNHU's academic integrity policy. Every order is written from scratch, includes free revisions within the scope of your original request, and is refunded in full if late.
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Frequently Asked Questions
SNHU describes it as the concepts and methods of professional auditing, from planning under governing standards, through risk-based strategy and testing, to standard audit reports.
SNHU lists it in the MS in Accounting, the graduate accounting certificate and the information systems and controls pathway of its CPA certificate.
PCAOB standards govern audits of public companies registered with the SEC; AICPA standards generally apply to audits of private entities.
Usually from a benchmark such as a percentage of pre-tax income or revenue, adjusted by the auditor's judgment about the entity and its users.
Claims implied in the statements, such as existence, completeness, valuation, rights and obligations, and presentation, that auditors design tests around.
Yes. Send it with the case; we check that procedures match the risks and assertions and suggest improvements.