This casebook is intended as a supplement to any primary auditing text, as
it helps extend and focus classroom discussions on the impact of Sarbanes-Oxley.
It grabs student interest by providing engaging, real- world examples of the
auditing environment pre- and post-Sarbanes-Oxley.
The text presents a total of 35 "ripped from the headlines" cases organized
within four sections:
1) Ethics and Professional Responsibility (7 cases),
2) Understanding the Client's Business and Industry (7 cases),
3) Internal Control Systems (10 cases),
4) Audits of Accounts, Processes and Assertions (11 Cases).
This organization closely follows that of most current auditing textbooks, making the
cases easy to implement.
In addition to these cases, Appendix A presents seven lengthier, complete company cases
giving instructors the flexibility to assign a single case to cover several learning
objectives. Appendix B presents financial statements for four of the companies covered in
Appendix A.
Table of Contents
Section 1 Fraud Cases: Violations of Generally Accepted Accounting Principles
(GAAP)
Case 1.1 Waste Management: The Matching Principle
Case 1.2 WorldCom: The Revenue Recognition Principle
Case 1.3 Qwest: The Full Disclosure Principle
Case 1.4 Sunbeam: The Revenue Recognition Principle
Case 1.5 Waste Management: The Definition of an Asset
Case 1.6 Enron: The Revenue Recognition Principle
Case 1.7 WorldCom: The Matching Principle
Case 1.8 The Fund of Funds: The Conservatism Constraint
Case 1.9 Qwest: The Revenue Recognition Principle
Case 1.10 The Baptist Foundation of Arizona: The Conservatism Constraint
Section 2 Ethics and Professional Responsibility Cases
Case 2.1 Enron: Independence
Case 2.2 Waste Management: Due Professional Care
Case 2.3 WorldCom: Professional Responsibility
Case 2.4 Enron: Quality Assurance
Case 2.5 Sunbeam: Due Professional Care
Case 2.6 The Fund of Funds: Independence
Section 3 Fraud and Inherent Risk Assessment Cases
Case 3.1 Enron: Understanding the Client?s Business and Industry
Case 3.2 The Baptist Foundation of Arizona: Related Party Transactions
Case 3.3 WorldCom: Significant Business Acquisitions
Case 3.4 Sunbeam: Incentives and Pressure to Commit Fraud
Case 3.5 Qwest: Understanding the Client?s Business and Industry
Case 3.6 The Fund of Funds: Related Party Transactions
Case 3.7 Waste Management: Understanding the Client?s Business and Industry
Section 4 Internal Control Systems: Entity-Level Control Cases
Case 4.1 Enron: The Control Environment
Case 4.2 Waste Management: Information Technology General Controls
Case 4.3 The Baptist Foundation of Arizona: The Whistleblower Hotline
Case 4.4 WorldCom: The Internal Audit Function
Case 4.5 Waste Management: Top-Side Adjusting Journal Entries
Section 5 Internal Control Systems: Control Activity Cases
Case 5.1 The Fund of Funds: Valuation of Investments
Case 5.2 Enron: Presentation and Disclosure of Special-Purpose Entities
Case 5.3 Sunbeam: Completeness of the Restructuring Reserve
Case 5.4 Qwest: Occurrence of Revenue
Case 5.5 The Baptist Foundation of Arizona: Presentation and Disclosure of Related Parties
Case 5.6 Waste Management: Valuation of Fixed Assets
Case 5.7 Qwest: Occurrence of Revenue
Appendix Company Cases
Case A.1 Enron
Case A.2 Waste Management
Case A.3 WorldCom
Case A.4 Sunbeam
Case A.5 Qwest
Case A.6 The Baptist Foundation of Arizona
Case A.7 The Fund of Funds
288 pages , Paperback
