Report of the President
Allen Blay

I can’t believe the summer is almost over and it is time for fall classes to start. This summer was an eye-opener for me because our summer enrollments in our major classes were mostly in the single digits. I’ve never seen anything like that before. It shows the effects of the enrollment declines we have been experiencing over the past several years. However, with the fall comes some good news for us – our enrollments in our first major course are up over 25% compared with last fall and we have more pre-majors coming to our events than we have had in a while. So it appears that our efforts to communicate better with freshman and sophomore students about what accounting actually is and engage them with successful alumni are starting to work. And that’s a good thing because the AICPA projects a 22% growth in accounting hires over the next 5 years, and much of it is projected in auditing. Wow! That’s huge for our profession and a good indicator for potential students of the future of our profession

The other day I was working on some standards updates for my fall class and I realized how many auditing standards have major changes proposed. Dana Hermanson, who chairs our section’s Auditing Standards Committee, had indicated they would need to limit their comment letters to the big items because there were so many. He wasn’t kidding. Our profession is changing fast – and our role as academic auditors is critical to ensuring the profession moves in the right direction. Through our teaching, research, and service, we play a large role in shaping the future of the profession. If you are passionate about auditing, and if you are reading this you must be, I encourage you to reach out to Jennifer Joe to volunteer to serve on one of our many committees. They aren’t time-consuming and they are a great way to make a difference. Just let Jennifer know if your passion is for research, education, working within your region or nationally, and she can find a great role for you. This is true whether you are old like me and your kids are older than your students or if you just finished your PhD. I served on a midyear meeting planning committee two years after I graduated and it was a great opportunity to meet so many other academics and learn from them.

This is my last letter as President of the Auditing Section. The next one will come from Jennifer, our President-Elect. Chad Stefaniak will step into the role of President-Elect. The Auditing Section has a long history of strong involvement from our members, and active participation in the AAA not just at the section level, but also at the national level. Our section also takes on a huge leadership role in other important efforts in the future of our profession, such as the PhD Project, and our members provide service to the AICPA Exams team, various Boards of Accountancy, the PCAOB, the SEC, and many others. I want to close this letter by saying thank you for all you do. Over the past 25+ years as a member of the Auditing Section, I’ve benefited from the friendship and scholarship of so many of you. I’ve never been associated with a kinder and more generous group of individuals in any organization I’ve participated in. I look forward to continuing to interact with all of you through our profession and outside of it. It’s a true blessing to know you.

Sincerely,

Allen

 

 

PCAOB Update

By Barbara Vanich and Elena Bozhkova
PCAOB Acting Chief Auditor and PCAOB Assistant Chief Auditor

Introduction

This Update addresses select Public Company Accounting Oversight Board (PCAOB) developments since the Spring 2023 Update that are likely to be of interest to accounting and auditing researchers, educators, and students. The developments include:

• PCAOB Conference on Auditing and Capital Markets
• PCAOB Proposes Modernization of Standards Addressing Core Auditing Principles and Responsibilities
• March Meeting of PCAOB Standards and Emerging Issues Advisory Group (SEIAG)
• PCAOB Releases 2022 Annual Report
• Spotlight on Priorities for 2023 Inspections
• Spotlight on SPAC Audits and De-SPAC Transactions
• Spotlight on Professional Competence and Skepticism
• PCAOB Enhances Transparency of Inspection Reports
• PCAOB Releases 2022 Inspection Reports for Mainland China, Hong Kong Audit Firms
• PCAOB Revises Standard-Setting Agenda
• PCAOB Issues Proposal to Increase Auditor Vigilance Against Fraud and Other Forms of Noncompliance with Laws and Regulations
• Meeting of PCAOB Investor Advisory Group (IAG)
• Spotlight on Inspection Observations Related to Crypto Assets
• Spotlight for Audit Committees Aims to Facilitate Dialogue on Risk of Fraud and Other Topics
• PCAOB Issues Proposal on Technology-Assisted Analysis
• June Meeting of PCAOB SEIAG
• Settled Disciplinary Orders

PCAOB Developments

PCAOB Conference on Auditing and Capital Markets

The PCAOB has announced the 2023 Conference on Auditing and Capital Markets. This year's conference will be held in person in Washington, DC (with an option to attend virtually), on October 5-6, 2023. Attendance is free and open to academics and Ph.D. students.

More information about the conference is available at https://pcaobus.org/news-events/events/conference-auditing-capital-markets/2023-pcaob-conference-on-auditing-and-capital-markets-call-for-papers.

PCAOB Proposes Modernization of Standards Addressing Core Auditing Principles and Responsibilities

On March 28, 2023, the PCAOB issued for public comment a proposed new standard, AS 1000, General Responsibilities of the Auditor in Conducting an Audit. The period for public comment on the proposal ended on May 30, 2023.

If adopted, AS 1000 would reorganize and consolidate a group of standards that were adopted on an interim basis by the PCAOB in April 2003 and that address the core principles and responsibilities of the auditor, such as reasonable assurance, professional judgment, due professional care, and professional skepticism.

The proposal would also amend certain other standards that address responsibilities fundamental to the conduct of an audit. Among other changes, the amendments would (1) reinforce and clarify the engagement partner’s responsibility to exercise due professional care related to supervision and review and (2) accelerate the documentation completion date by reducing the maximum period for the auditor to assemble a complete and final set of audit documentation from 45 days to 14 days.

The proposal, comment letters received, and supplemental materials are available at https://pcaobus.org/about/rules-rulemaking/rulemaking-dockets/docket-049-responsibilities-auditor-conducting-audit.

March Meeting of PCAOB Standards and Emerging Issues Advisory Group (SEIAG)

On March 30, 2023, the PCAOB held a virtual meeting of the SEIAG. Agenda topics included:

• Standard-setting Update
• Post-Implementation Review: CAMs and Estimates & Specialists – Findings and Steps Forward
• Going Concern
• Substantive Analytical Procedures

The recording and related materials for the meeting are available at https://pcaobus.org/news-events/events/event-details/pcaob-standards-and-emerging-issues-advisory-group-meeting-2023-march.

PCAOB Releases 2022 Annual Report

On April 5, 2023, the PCAOB released its 2022 Annual Report. The Annual Report discusses how the PCAOB advanced its investor-protection mission during the year by making significant progress on its four strategic goals: Modernize Standards, Enhance Inspections, Strengthen Enforcement, and Improve Organizational Effectiveness. The Annual Report also provides the PCAOB’s financial results for fiscal year 2022, including audited financial statements, the auditor’s report, and management’s report on internal control over financial reporting.

The Annual Report is available at https://assets.pcaobus.org/pcaob-dev/docs/default-source/about/administration/documents/annual_reports/2022-annual-report_final.pdf?sfvrsn=d73be283_2.

Spotlight on Priorities for 2023 Inspections

On April 17, 2023, the PCAOB issued a Spotlight that outlines priorities for 2023 inspections. The report indicates plans to increase the focus on fraud-related audit procedures, continue prioritizing risks related to material digital assets, and continue selecting audits in the financial services sector for inspection, among other priorities. The report also notes that the target team of inspectors, who execute in-depth reviews across audit firms each year, will focus its work in 2023 on audits that include risks related to digital assets, first year audits, multi-location audits, and significant or unusual events or transactions. As part of ongoing efforts to enhance inspections, the report also says inspectors will expand the number of audits they review for certain annual firms.

The Spotlight is available at https://assets.pcaobus.org/pcaob-dev/docs/default-source/documents/priorities-spotlight.pdf?sfvrsn=5c104095_4.

Spotlight on SPAC Audits and De-SPAC Transactions

On April 19, 2023, the PCAOB issued a Spotlight to shed light on an area where PCAOB inspectors have observed relatively high rates of audit deficiencies: special purpose acquisition companies (SPACs). The report presents several key takeaways for auditors, including exercising due professional care and professional skepticism, considering whether presentation and disclosures in the financial statements conform with GAAP, understanding the public company’s processes to develop its accounting estimates, and remaining alert to changes in the public company’s or the auditor’s circumstances which may give rise to situations that could impair auditor independence.

The Spotlight is available at https://assets.pcaobus.org/pcaob-dev/docs/default-source/documents/spacs-spotlight.pdf?sfvrsn=b6490773_4.

Spotlight on Professional Competence and Skepticism

On April 25, 2023, the PCAOB issued a Spotlight to remind auditors of the importance of critically assessing the firm’s capabilities, obtaining proper understanding of the company they are auditing, and performing work with due professional care and professional skepticism. These matters are particularly important in circumstances where changes to economic conditions or other factors affect the company.

The Spotlight is available at https://assets.pcaobus.org/pcaob-dev/docs/default-source/documents/competence-and-skepticism-spotlight.pdf?sfvrsn=27ba2fa1_2.

PCAOB Enhances Transparency of Inspection Reports

On May 2, 2023, the PCAOB announced it has enhanced its inspection reports with a new section on auditor independence and a range of other improvements that increase transparency by making publicly available more information that is relevant, reliable, and useful for investors and other stakeholders. The changes begin with reports for PCAOB inspections completed in 2022.

The enhanced inspection reports include:

• A new section of the report focused on independence violations
• More information related to fraud procedures and the identification and assessment of the risks of material misstatements
• More commentary
• New graphs

PCAOB inspection reports are available at https://pcaobus.org/oversight/inspections/firm-inspection-reports.

PCAOB Releases 2022 Inspection Reports for Mainland China, Hong Kong Audit Firms

On May 10, 2023, the PCAOB released the inspection reports for the two firms inspected in 2022: KPMG Huazhen LLP in mainland China and PricewaterhouseCoopers in Hong Kong. Both reports show unacceptable rates of Part I.A deficiencies, which are deficiencies of such significance that PCAOB staff believe the audit firm failed to obtain sufficient appropriate audit evidence to support its work on the public company’s financial statements or internal control over financial reporting. The PCAOB inspected a total of eight engagements in 2022 – four at each of the two firms – including the types of engagements to which People’s Republic of China authorities had previously denied access, such as large state-owned enterprises and issuers in sensitive industries.

The two reports are available at https://pcaobus.org/oversight/inspections/firm-inspection-reports.

PCAOB Revises Standard-Setting Agenda

On May 16, 2023, the PCAOB posted a revised standard-setting agenda that includes the addition of two projects slated for short-term action. The PCAOB also announced four new projects aimed at improving PCAOB rules to protect investors. The rulemaking projects focus on enhancing investor transparency and enforcement of PCAOB rules and standards.

The standard-setting and rulemaking projects can be found on the Standard-Setting, Research, and Rulemaking Projects page at https://pcaobus.org/oversight/standards/standard-setting-research-projects.

PCAOB Issues Proposal to Increase Auditor Vigilance Against Fraud and Other Forms of Noncompliance with Laws and Regulations

On June 6, 2023, the PCAOB issued for public comment a proposal that would amend PCAOB auditing standards related to the auditor’s responsibility for considering a company’s noncompliance with laws and regulations, including fraud. If adopted, the proposal would strengthen auditor requirements to identify, evaluate, and communicate possible or actual noncompliance with laws and regulations. The deadline for public comment on the proposal is August 7, 2023.

Broadly, the proposal seeks to strengthen and enhance auditor obligations related to a company’s noncompliance with laws and regulations in three key respects:

• Identify – The proposal would establish specific requirements for auditors to proactively identify – through inquiry and other procedures – laws and regulations that are applicable to the company and that could have a material effect on the financial statements, if not complied with.
• Evaluate – The proposal would strengthen requirements related to the auditor’s evaluation of whether noncompliance with laws and regulations has occurred, and if so, the possible effects on the financial statements and other aspects of the audit.
• Communicate – The proposal would make it clear that the auditor is required to communicate to the appropriate level of management and the audit committee as soon as they are made aware that noncompliance with laws or regulations has or may have occurred.

The proposal, comment letters received, and supplemental materials are available at https://pcaobus.org/about/rules-rulemaking/rulemaking-dockets/docket-051.

Meeting of PCAOB Investor Advisory Group (IAG)

On June 7, 2023, the PCAOB held a meeting of the IAG. Agenda topics included:

• PCAOB standard-setting update
• IAG Subcommittee on Standards Briefing to the PCAOB – Critical Audit Matters
• IAG Subcommittee on Standards Briefing to the PCAOB – Discussion on Fraud
• IAG Subcommittee on Inspections and Data Transparency Briefing to the PCAOB – Recommendations

The recording and related materials for the meeting are available at https://pcaobus.org/news-events/events/event-details/pcaob-investor-advisory-group-meeting-june-2023.

Spotlight on Inspection Observations Related to Crypto Assets

On June 14, 2023, the PCAOB issued a Spotlight on inspection observations related to crypto assets, based primarily on observations gathered during 2021 and 2022 inspections. As detailed in the Spotlight, PCAOB inspections have identified common audit deficiencies related to crypto assets in the auditor’s procedures for the following areas:

• Fraud and significant unusual transactions
• Ownership of crypto assets
• Relevance and reliability of information used as audit evidence
• Revenue recognition in crypto asset transfer
• Arrangements with mining pool operators

In addition to inspection observations, the Spotlight discusses good practices that some audit firms have implemented and that may enhance audit quality. The Spotlight is available at https://assets.pcaobus.org/pcaob-dev/docs/default-source/documents/crypto-assets-spotlight.pdf?sfvrsn=f0e1d51c_2.

Spotlight for Audit Committees Aimed to Facilitate Dialogue on Risk of Fraud and Other Topics

On June 21, 2023, the PCAOB issued a Spotlight that suggests questions that may be of interest to audit committee members to consider among themselves or in discussions with their independent auditors, particularly given today’s economic and geopolitical landscape.

The Spotlight groups questions that audit committees may want to consider regarding the auditor’s work on the following topics:

• Risk of fraud
• Risk assessment and internal controls
• Auditing and accounting risks
• Digital assets
• Merger and acquisition activities
• Use of the work of other auditors
• Talent and its impact on audit quality
• Independence
• Critical audit matters
• Cybersecurity

The Spotlight is available at https://assets.pcaobus.org/pcaob-dev/docs/default-source/documents/2023-audit-committee-resource-spotlight.pdf?sfvrsn=ac07ea4c_2.

PCAOB Issues Proposal on Technology-Assisted Analysis

On June 26, 2023, the PCAOB issued for public comment a proposal designed to improve audit quality and enhance investor protection by addressing aspects of designing and performing audit procedures that involve technology-assisted analysis of information in electronic form. The proposal includes changes to update aspects of AS 1105, Audit Evidence, and AS 2301, The Auditor’s Responses to the Risks of Material Misstatement. The deadline for public comment on the proposal is August 28, 2023.

The proposal is available at https://pcaobus.org/about/rules-rulemaking/rulemaking-dockets/docket-052.

June Meeting of PCAOB SEIAG

On June 29, 2023, the PCAOB held a meeting of the SEIAG. Agenda topics included:

• Standard-setting Update
• Post-Implementation Review – Other Auditors Research Plan
• Emerging Issues in Auditing
• Interim Reviews

The recording and related materials for the meeting are available at https://pcaobus.org/news-events/events/event-details/pcaob-standards-and-emerging-issues-advisory-group-meeting-june-2023.

Settled Disciplinary Orders

The PCAOB posted several settled disciplinary orders.

Settled disciplinary orders are available at https://pcaobus.org/Enforcement/Decisions/Pages/default.aspx.

 

 

Current Issues in Auditing Update

By Nicole Wright and Steven Davis
James Madison University and Ernst & Young

On behalf of Steve and myself, we are thrilled to continue advancing the prominence of Current Issues in Auditing (“CIIA”). We extend our sincere appreciation to Denise Dickins and Keith Urtel for their unwavering dedication to CIIA’s journal. One of our primary objectives is to uphold CIIA’s mission of fostering an informed and collaborative dialogue between academics and practitioners on the pressing issues faced by the auditing community.

To accomplish this objective, it is essential that practitioners actively engage with CIIA by reading the journal and considering the research findings presented within its pages. We understand that practitioners have a keen interest in exploring the applications of new technologies, such as artificial intelligence, automation, and generative chatbots, within the realms of companies, independent auditors, internal auditors, and fraud investigators. Consequently, our commitment lies in publishing rigorous and impartial studies that investigate these crucial practical matters and communicate the results in an easy understandable manner. In our pursuit of excellence, we are proud to have representatives from esteemed practice firms actively involved in CIIA’s review process, ensuring that the journal remains relevant and valuable to practitioners. Our Editorial Board comprises prominent industry leaders from BDO, Cherry, Bekaert & Holland, Crowe, Deloitte, EY, Focal Point, Grant Thornton, KPMG, Marcum, Protiviti, and PwC, who contribute their expertise and insights.

Furthermore, we recognize the importance of encouraging authors to submit their work to CIIA. To facilitate academic submissions, minimize desk rejections, and reduce author frustration, we will continue utilizing the pre-submission screening option established by our predecessors. This process involves seeking relevance feedback from partner-practitioners before advancing submissions to the formal peer review stage, helping authors receive early input on the suitability of their research for CIIA. We invite author-teams who may be uncertain about the appropriateness of their studies for CIIA to submit a proposed title and brief summary of their planned research project or a practice-focused title and abstract of a previously published article for the Academic Co-Editor for pre-submission feedback (wrightns@jmu.edu). Within 14 days, partner-practitioners will provide feedback on the submission. We want to emphasize that there is no fee associated with pre-submissions.

In our ongoing efforts to promote CIIA, we will actively disseminate recently published articles to leading audit and audit-related firms, encouraging them to widely share links to future CIIA articles and issues. Furthermore, we extend a special invitation to current Ph.D. candidates to submit their articles to CIIA. These candidates often possess years of valuable practice experience, providing them with unique insights into the dynamics of the current auditing practice. CIIA serves as a distinct platform for these candidates to bridge their practical expertise with academic research, offering them a valuable outlet for contributing to the field. We sincerely hope that these initiatives will generate a wealth of high-quality submissions that resonate with practitioners and potentially offer practical applications. We wholeheartedly welcome your suggestions as we strive to enhance the journals’ impact and relevance.

Nicole & Steve

 

 

Have you Seen...?

Candice Hux, Northern Illinois University
Jenna J. Burke, University of Colorado Denver
Jenny McCallen, University of Georgia

“Remembering Fraud in the Future: Investigating and Improving Auditors’ Attention to Fraud during Audit Testing.” By Ashley A. Austin. Contemporary Accounting Research 40 (2): 925-951.

This paper identifies and tests a strategy to enable auditors to be more cognizant of potential fraud during audit testing. Auditors struggle to exhibit appropriate skepticism and often fail to identify fraud cues during the audit. Auditors are required to brainstorm and identify potential fraud risks, but during audit testing, their attention is devoted to evaluating management’s assertions and therefore, they often fail to recognize fraud cues. Consistent with prospective memory theory, an intervention that encourages auditors to identify fraud risks and detail the actions they would take upon identifying such fraud cues (i.e., implementation intentions about fraud), leads to greater awareness of fraud cues and a greater number of effective fraud procedures. Importantly, the study finds that such intervention does not decrease the auditor’s effectiveness during substantive testing.

“Assurance Level Choice, CPA Fees, and Financial Reporting Benefits: Inferences from U.S. private Firms.” By Brad A. Badertscher, Jaewoo Kim, William R. Kinney Jr. and Edward Owens. Journal of Accounting and Economics 75 (2-3): 101551.

This study uses proprietary data from a U.S. CPA firm to uniquely examine the assurance choices of private companies. Relative to public companies, private companies have more flexibility on whether and to what extent they obtain assurance services from CPAs. The data show that, for private companies that engaged the CPA firm from 2015 to 2016, 22 percent receive compilations, 42 percent reviews, and 36 percent audits. As expected, fees increase by the level of assurance obtained. The study also finds that financial reporting quality is better, and the cost of debt is lower for higher assurance levels. However, the benefits are primarily realized when moving from compilations to reviews. Overall, this novel evidence sheds interesting insights into the cost-benefit tradeoff of different levels of assurance services for private companies.

“Did the PCAOB’s 2009 Office Expansion Improve Audit Quality?” By James J. Blann, Tyler J. Kleppe and Jonathan E. Shipman. Contemporary Accounting Research 40 (1): 89-11.

Using a difference-in-difference design, this study examines whether increased audit oversight by the PCAOB was effective in improving audit quality. Specifically, in 2009 the PCAOB expanded its oversight presence of seven regional offices and the headquarters in Washington DC, with new offices in Boston, Charlotte, Detroit, Houston, and Tampa. This expansion increased staff and operational costs, with the ultimate goal of increased auditor oversight. Findings show that, for markets where new offices opened relative to markets without new offices, audit quality significantly improved in the post-expansion period. This benefit of the PCAOB’s increased investment in audit oversight is timely given the PCAOB’s recent calls for input from academic research on ways to improve audit quality.

“Does the Presence of an Internal Control Audit affect Firm Operational Efficiency?” By Andrew J. Imdieke, Chan Li, and Shan Zhou. 2023. Contemporary Accounting Research 40(2): 952-980.

While studies have shown that the strength of internal controls improves financial reporting quality, whether the mere presence of the internal control audit provides benefits for firm operations was previously unclear. This is a particularly important question for small firms, given the debate on the costs and benefits of internal control audits. This study finds that small firms with internal control audits have higher operational efficiency than small firms with only management-issued internal control reports. This finding is driven by auditor detection of internal control problems and knowledge spillover from other operationally efficient firms. These findings add to the debate surrounding the benefits of an internal control audit, suggesting that exempting firms from this requirement may eliminate previously undocumented benefits.

“He, Him, His: Masculine Language in Professional Guidance and Assessed Equity and Inclusion of Women and LGBTQ+ People in the Profession.” By Marietta Peytcheva. Accounting, Organizations and Society 106: 101413.

This study examines the effect of masculine language in authoritative accounting guidance. Experiment 1 finds that the use of masculine versus more gender-inclusive pronouns in PCAOB auditing standards reduces accounting professionals' assessed equity and inclusion of women and LGBTQ+ people in the audit profession. This effect is stronger for women and LGBTQ+ participants than for men. In Experiment 2, college students, not isolated to the accounting profession, read a neutral language accounting job description with either masculine or gender-inclusive accounting guidance. Masculine pronouns reduce students' equity and inclusion assessments, and this effect is stronger for women and LGBTQ+ participants. Finally, Experiment 3 shows that masculine pronouns decrease perceptions of the accounting profession’s equity and inclusion, and this effect is stronger for LGBTQ+ participants than non-LGBTQ+ participants. Collectively, these findings have important implications for regulators and firms as the use of gendered pronouns may increase perceptions of bias and inequality in auditing and accounting.

“Language, Perceived Warmth, and Investors’ Reactions to Audit Committee Reports.” By Hun-Tong Tan, Tu Xu, and Yao Yu. Contemporary Accounting Research 40 (2): 1388-1417.

This paper examines how the nature of the audit committee (AC) report influences nonprofessional investors' perceived reporting quality and investment willingness. Using a 2x2 between-participants design, the authors manipulate the language used in the AC report (personal vs. impersonal) and the AC compensation structure (short-term vs. long-term). They find that when ACs use more personal language, such as “we” and “our,” participants’ perceived reporting quality and investment willingness are higher, but only when the AC’s compensation structure is short-term in nature. The effect of AC language is insignificant when AC compensation is largely long-term. Further, perceived warmth mediates the effect of AC language on perceived reporting quality, and this is more important to investors when the compensation structure is short-term. Interviews with nonprofessional investors corroborate that they are aware of language differences within AC communications and that AC communications affect their investing decisions.

 

 

Have You Seen These Educational Resources?

Sean Dennis
University of Central Florida

“The ChatGPT Artificial Intelligence Chatbot: How Well Does it Answer Accounting Assessment Questions?” By David A. Wood et al. (327 total coauthors). Issues in Accounting Education 38 (2): 1-28.

This article compares the performance of ChatGPT to students in accounting classes. Using crowdsourced data from 186 institutions (across 14 countries), the authors show that, as of January 2023, students generally outperform ChatGPT on 28,085 questions from accounting assessments. Across all of these questions, students scored an average of 76.7 percent, while ChatGPT scored 47.4 percent based on fully correct answers (and an estimated 56.5 percent if partial credit was included). The authors note that ChatGPT performed relatively better on AIS and auditing assessments than on tax, financial, and managerial assessments (perhaps reflecting ChatGPT’s struggle with mathematical type questions). The authors also note that Chat GPT performs relatively better in answering true/false and multiple choice questions, relative to short answer and workout questions.

“Declining Enrollments: A Call to Action!” By Mark C. Dawkins Issues in Accounting Education 38 (1): 9-18.

This commentary discusses the extent of declining enrollments in accounting programs - and provides several metrics to contextualize the issue. The article discusses several recommendations for stimulating interest in accounting, recruiting students to the major, and modernizing the curriculum. Notably, the article recommends an overhaul to the introductory financial accounting course – to de-emphasize debits, credits and other procedural details. The article also emphasizes the importance of data analytics exercises and cases through accounting curriculum – and proposes using cases that integrate material from different upper-level courses (e.g., an internal controls case that spans financial statement creation, auditing, and the effects of errors in the financial statements).

“An Introductory Audit Data Analytics Case Study: Using Microsoft Power BI and Benford’s Law to Detect Accounting Irregularities.” By Erin Burrell Nickell, Jason Schwebke, and Paul Goldwater. Journal of Accounting Education 64 (September): https://doi.org/10.1016/j.jaccedu.2023.10085

This case helps students learn how to use data analytics techniques to identify irregularities in Microsoft Power BI. The case first provides a guided approach to using Power BI at the beginner level. The case then directs students to evaluate data for consistency with Benford’s Law. The case involves creating an interactive visualization, interpreting the results, and communicating the findings to a supervisor. The authors test the case in a graduate-level fraud course as well as an undergraduate AIS course, and find that it is suitable for students who have little or no prior experience with Power BI.