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This short interactive case introduces several auditing concepts in the context of a familiar activity: verifying the accuracy of a restaurant bill. You will work in student teams to first determine whether the bill is accurate, and then to decide whether you are willing to pay it. During the exercise, you will keep track of the various steps and procedures you used in making your decisions. After you complete the exercise, your instructor will relate the activity to various auditing topics in the auditing process such as audit evidence, internal control, materiality, professional responsibilities and the concept of “fairly stated.” Hundreds of students have completed this exercise and report that it has helped them grasp many essential features of the auditing process, while providing a useful frame of reference for more complex aspects of the audit process.

The current literature and Statement on Auditing Standards (SAS) 99 emphasize the importance of relating operational factors to financial factors when evaluating the risk of fraud. The following case is based on an actual company and demonstrates how an understanding of the relationship between operational factors and financial reporting can aid an auditor in assessing risk and identifying fraud. The case also gives students an opportunity to directly evaluate internal control in an operational setting. The case is intended to strengthen students' critical thinking and analytical skills and to give them exposure to the importance of internal controls in an operational setting.

The extensive computational and formatting capabilities of today's spreadsheets enable users to create sophisticated analytical models with professionally formatted outputs. But good-looking reports can mask a host of input errors, formula mistakes, and computational problems. This article examines the subject of spreadsheet error detection in detail and describes an experiment designed to identify those factors influencing the error-detection capabilities of a sample of spreadsheet users.

Business schools continue to grapple with the issue of curriculum integration. Although faculty are encouraged to work conjointly and students are told that theories, concepts, and techniques learned in one course will be used in future courses, the challenge of integrationfrom course to course remains elusive. This article presents a model for curriculum integration developed by the business school at the State University of New York at Geneseo. The model uses a comprehensive case based on a real-world insurance company. Incoming business students will be presented with a synopsis of the case in their first year of business school. The same case with the relevant topical additions will continue to be used in all subsequent primary business courses. The article presents the rationale, methodology, and curriculum development of the case. The article also outlines how the school plans to integrate the case into the upper-level business courses.

This paper describes an original AIS project and relates several of its features to ongoing discussion of curricular issues in accounting education. The Verhovek Company is a spreadsheetbased AIS exercise that prepares students for the Arens-Ward Systems Understanding Aid. It introduces systems concepts and competencies such as documentation and structured design in the context of procedures and software that are relatively familiar to accounting students. The exercise uses several topics from Intermediate Financial Accounting to illustrate specialized spreadsheet functions and to provide students with an opportunity to build a carefully structured set of worksheets that control the flow of information from data and assumptions through calculations, adjusting entries and then into the financial statements. Upon successful completion of the project students have a financial statement template readily adaptable to the preparation of financial statements for the SUA.

The Excess Earnings Method requires the estimation of two capitalization rates, and the difficulty of estimating these has been suggested as a deterrent to greater use in business valuations. This paper presents a mathematically-derived set of formulas which allow the valuator to derive capitalization rates from publicly traded comparables. The paper provides implementation guidance and surveys empirical research which supports the use of the Excess Earnings Model for practical valuation work.

One of the measures of the success of the educational process is its ability to prepare students for the challenges and opportunities of professional life. Educational institutions must consider and integrate the expectations of its professional as well as academic stakeholders when developing curricula. This paper presents a model that considers academic and professional dimensions in course design. The model incorporates levels of learning (Bloom's Taxonomy), the complexity of the learning environment, and the sophistication of professional skills development. The model can also be used to integrate the courses in the accounting curriculum along the three dimensions noted above.

This paper employs static and simulation analysis to consider the measurement properties of the currently active accounting standards for reporting compensation expense related to Employee Stock Options. We find that under a wide range of plausible scenarios the reported expense significantly understates the cash cost incurred by the entity at exercise. The paper includes a discussion of implications for practice and standards setters.