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
Wednesday, August 10, 2005

Session 22
"Audit Failure" Project for Use in an Undergraduate or Graduate Auditing Class

Presenter:
Rebecca L. Rosner, Long Island University C.W. Post Campus

Description:
The proposed session describes a project successfully assigned in undergraduate and graduate auditing classes and would be of interest to faculty members teaching auditing or related courses. It requires students to choose a real case of fraudulent financial reporting and related audit failure and to evaluate the audit using publicly available data and their knowledge of GAAS and GAAP. The Enron, WorldCom, and other recent high-profile frauds resulted in substantial losses for many, caused major upheavals as accusations of audit failure surfaced, and ultimately led to the demise of Arthur Andersen. Sarbanes Oxley was one of several steps taken to improve the financial reporting and auditing process and to prevent this scenario from recurring. Therefore now, more than ever, it is imperative for prospective accountants and auditors to gain hands-on experience in assessing the risk of fraudulent financial reporting and potential audit failure. The project enables the faculty member to aid students in enhancing their research skills using online electronic resources, gaining familiarity with the SEC’s enforcement process, applying previously learned GAAP and GAAS concepts, developing a greater exposure and sensitivity to ethical dilemmas/issues auditors must confront, and developing and enhancing critical-thinking, teamwork, and oral/written communication skills.

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