This application scenario asks students to assume the role of an auditor and use their professional judgment to perform a fraud risk assessment as part of the audit planning process for Jameson Family Farms, a family-owned business that grows and sells peanuts. As a result of the assessment, students are then asked to modify select audit procedures to address the identified risk.
The format of the case seeks to simulate a real-world experience by providing students a variety of sources of information to gain necessary insights, requiring students to directly reference auditing guidance, providing audit work paper documents for review and by including a diverse complement of case characters representing typical individuals they would encounter in the audit environment.
Four videos are integrated into part I that do not require download. Closed-captioning functionality is available. A separate video transcript document is available for distribution to the students. However, to better simulate a real-world audit interview experience, students could be asked to take notes during the client interviews to force them to rely on information gathering in this manner alone.
Part II: students are told that the risk of material misstatement due to fraud has been assessed as high as compared to the prior year being assessed as low. Students are then asked to review prior year audit procedures related to revenue, accounts receivable and the allowance for doubtful accounts (provided) and make suggested changes to the nature, timing and extent of audit procedures based on this change in risk assessment. Prior to completing this step however, the students are first asked to identify the audit assertions that each audit procedure addresses.