ABSTRACT

The aim of the case is twofold. The primary aim is to facilitate the embedding of the audit assertion constructs into students' knowledge. Students frequently have difficulty in grasping the audit assertions. This case has been developed to provide students with a visual technique to assist their understanding of the assertions. The second aim of this case is to facilitate student understanding of issues pertaining to the audit of inventory, including the role of internal control, the assessment of risks that may lead to material misstatement, including the need to specifically consider fraud risk, and the audit procedures that may reduce these risks. These aims are achieved through providing a rich set of background materials relating to the inventory audit for a company with an inventory of investment diamonds. The case material is presented in two separate modules that build on each other and may be combined to create increased case complexity. The module approach will allow instructors to select the case format most applicable to both their classroom structure and their student needs.

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