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Waste Is Our Business, Inc.: The importance of non-financial information in the audit planning process

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  • Cohen, Jeffrey
  • Krishnamoorthy, Ganesh
  • Wright, Arnie

Abstract

The objectives of this case are: (a) to alert students to the importance of non-financial information in the audit process; (b) to develop students’ ability to search for relevant financial and non-financial information in the audit planning process; and (c) to emphasize the importance of resisting the natural tendency to over-rely on financial information when conducting the financial statement audit. Students are asked to consider both financial and non-financial information when evaluating a client’s account balances. The client is in the waste business where there are a number of market, regulatory, and political factors that may affect the valuation of different accounts. Students are also directed to consider the importance of non-financial information in the integrated audit mandated by PCAOB Standard 5 and in fraud detection. The case can help students learn to explicitly consider non-financial information and understand the significance of integrating such information with financial data. The case is suitable for use in undergraduate or graduate auditing and assurance courses.

Suggested Citation

  • Cohen, Jeffrey & Krishnamoorthy, Ganesh & Wright, Arnie, 2008. "Waste Is Our Business, Inc.: The importance of non-financial information in the audit planning process," Journal of Accounting Education, Elsevier, vol. 26(3), pages 166-178.
    • Handle: RePEc:eee:joaced:v:26:y:2008:i:3:p:166-178
    DOI: 10.1016/j.jaccedu.2008.08.004
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    References listed on IDEAS

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    1. Libby, R, 1985. "Availability And The Generation Of Hypotheses In Analytical Review," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 23(2), pages 648-667.
    2. Erickson, M & Mayhew, BW & Felix, WL, 2000. "Why do audits fail? Evidence from Lincoln Savings and Loan," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 38(1), pages 165-194.
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    Cited by:

    1. Christina Chiang & Paul K. Wells & Peter Fieger & Divesh S. Sharma, 2021. "An investigation into student satisfaction, approaches to learning and the learning context in Auditing," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(1), pages 913-936, March.
    2. Chiang, Christina & Wells, Paul K. & Xu, Gina, 2021. "How does experiential learning encourage active learning in auditing education?," Journal of Accounting Education, Elsevier, vol. 54(C).
    3. Roxana Manuela Dicu & Ioan-Bogdan Robu & George-Marian Aevoae & Daniela-Neonila Mardiros, 2020. "Rethinking the Role of M&As in Promoting Sustainable Development: Empirical Evidence Regarding the Relation Between the Audit Opinion and the Sustainable Performance of the Romanian Target Companies," Sustainability, MDPI, vol. 12(20), pages 1-17, October.

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