An International Meeting of the American Accounting Association 2005 Annual Meeting August 7–10, 2005 San Francisco, California Come to the City by the Bay!

Effective Learning Strategies Forum
Tuesday, August 9, 2005

Session 30
A Movie Project Brings the COSO Internal Control Framework to Life

Presenters:
Arline Savage, California Polytechnic State University, San Luis Obispo
Kate Lancaster, California Polytechnic State University, San Luis Obispo

Description:
We noticed our students seemed either disinterested or overwhelmed by textbook coverage of COSO's internal control framework. So, consistent with our school's "learn-by-doing" approach to instruction, we developed this project to illustrate the consequences (1) of a lack of internal controls in an organization; (2) of preferential treatment for star employees who think rules are not for them; and (3) lax corporate governance. This case vividly illustrates problems in these three areas. Following the COSO lecture, we use as case material a commercial movie of the story of a "star" employee who single-handedly caused the dissolution of the British-based Barings Bank. After viewing the movie, students answer our case questions, and discover how management can be blinded by greed, tradition, habit, and the assumption that everyone is honest. They also discover how the COSO internal control framework indeed underlies Sarbanes-Oxley implementation in the business world they are about to enter. We also discuss copyright issues of showing a commercial movie in class, and how to address student concerns of viewing an R-rated movie.

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