Case Overview

This teaching case provides a hands-on learning experience for students to connect textbook audit knowledge with an activity regularly performed in audit practice: closing review notes. Workpaper review is an important quality control mechanism in the audit environment. However, appropriately responding to review notes is not commonly taught. Through the process of closing review notes, students practice auditing accounts receivable, including performing audit procedures related to internal controls and substantive audit work. The case also provides students with an opportunity to use Excel to complete electronic workpapers and to document their audit procedures. Further, the case requires students to use critical-thinking skills and apply professional skepticism when performing audit procedures, evaluating audit evidence, and making decisions. Finally, this case helps students understand how auditing standards apply to the procedures performed during an audit of accounts receivable. The case is designed for auditing courses at the undergraduate or graduate level.

Learning Outcomes for Students

• Can audit accounts receivable by using an audit program guide, applying audit firm guidance, performing audit procedures related to testing the operating effectiveness of a control, and performing substantive tests of details.

• Able to apply critical thinking skills and professional skepticism when performing audit procedures, obtaining and evaluating audit evidence, and making decisions.

• Able to identify and evaluate issues or exceptions in audit testwork.

• Can appropriately document audit procedures, including how to use tickmarks and respond to audit review notes.

• Understand how auditing standards and other auditing concepts apply to audit procedures performed during an audit of accounts receivable.

Access to Case Materials

Citation: Andiola, L. M., Lambert, T. A., and Lynch. E. J. 2018. Sprandel Inc.: A teaching case on closing review notes in an electronic audit environment. Issues in Accounting Education 33 (2): 43-55.

Access case materials: 
https://doi.org/10.2308/iace-52055

Access to the online case for students:
http://lindsay.fildred.com/teaching-cases/sprandel-inc/