ABSTRACT

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.

You do not currently have access to this content.