A TEAM APPROACH TO AUDITING EDUCATION

1. A TEAM APPROACH TO AUDITING EDUCATION Robert E. Guinn, Ph.D., CPA Department of Accounting University of North Carolina - Charlotte

2. An Overview • Introduction • The Project • A Team Approach • Student Evaluation of the Project • Conclusion

3. Introduction • Bedford Committee (1986) - Students must not only learn the body of knowledge but also be able to apply that knowledge in creative and innovative ways. • Perspectives on Education (1989) Three categories of skills are necessary for success in practice - Communication, intellectual, and interpersonal. • Accounting Education Change Commission (1990) - Stressed the ability to locate, obtain and organize information and to identify and solve unstructured problems.

4. The Project • Initial Objectives • Apply and document audit procedures • Use accounting theory to identify and correct unstructured accounting errors • Provide for the use and understanding of audit software • Relate accounting and auditing theory to practice • Initial Approach • Individual assignment • Students Complete four modules - Cash, Inventories, Accounts payable, and Long-term debt • Prior year working papers were made available • Designed to simulate audit function of a first year staff member in public accounting

5. A Team Approach • Additional objectives • Assigning students to teams • Team characteristics and responsibilities • The evaluation process

6. Additional Objectives • Provide for senior review of staff work • Develop interpersonal skills through interaction with team members • Develop communication skills • Develop leadership skills

7. Assigning Students to Teams • Instructor selects students for each team based on performance on first examination • Primary objective is to provide teams with a balance of academic strength

8. Team Characteristics and Responsibilities • Team characteristics • Staff responsibilities • Senior responsibilities

9. Team Characteristics • Each team consists of three or four students • Students select senior for each team unless instructor is requested to do so • Guidelines are provided by instructor for completing assignments on timely basis

10. Staff Responsibilities • Each staff completes audit program of two modules (Cash and securities, Inventories and Accounts Payable, or Fixed Assets and Long-term Debt) • Applies audit procedures and documents working papers • Identifies accounting errors and proposes adjusting or reclassifying journal entries • Uses audit software to record adjusting and reclassifying entries, add accounts, redefine balance sheet items, update lead sheets and prepare conclusions • Evaluates senior

11. Senior Responsibilities • Prepares written suggestions for changes • Uses audit software to enter adjusting and reclassifying entries for all staff members to update working trial balance • Prints final working trial balance and financial statements • Reviews completed modules of each staff member • Assembles materials into notebook for team and submits to instructor • Evaluates each staff member

12. The Evaluation Process • Evaluation of Seniors by Staff • Evaluation of Staff by Seniors • Evaluation by Instructor • Student Evaluation of the Project

13. Evaluation of Senior by Staff • Each staff member provides completed evaluation form to instructor • Attributes evaluated • Team Leadership • Communication Skills • Cooperative Attitude • Technical Knowledge • Responsive and timeliness • Planning Skills • See Exhibit 1 attached

14. Evaluation of Staff by Senior • Seniors provide instructor with evaluation of each staff • Attributes evaluated • Quality of Work • Team Player • Cooperative Attitude • Timeliness of Work • Initiative • Preparedness • See Exhibit 2 attached

15. Evaluationby Instructor • Seniors • Quality of Overall Project • Evaluation by Staff • Staff • Quality of Completed Modules • Evaluation by Seniors

16. Student Evaluation of the Project • Table 1 • Characteristics • Results • Table 2 • Characteristics • Results

17. Table 1 - Characteristics • Team Approach (Team) • Senior/Staff Designation (S/S) • Audit Software (Fastleads) (F/L) • Documentation of Working Papers (Doc.) • Evaluation by Senior/Staff (Eval.) Note: Students ranked characteristics 1-5, “ 1 indicating “very dissatisfied” and 5 indicating “very satisfied

18. Table 1 - Results • Very satisfied with team approach (4.19), senior/staff designation (4.31), and evaluation by senior/staff (4.21). • Less satisfied with audit software (3.38) and documentation of working papers (3.79) • See Table 1 attached

19. Table 2 - Characteristics • Senior/Staff Member Functions • Senior/ Staff Evaluation Attributes • Point Values for Elements of Project • Achieves Project Objectives • Rank Project in Comparison with other Projects Note: Students ranked characteristics 1-5, 1 indicating “very dissatisfied” and 5 indicating “very satisfied”

20. Table 2 - Results • Students ranked evaluation attributes (4.25) and achievement of project objectives (4.16) relatively high • Project was ranked above average (3.4) when compared with other projects • Only significant difference noted was between senior (4.34) and staff (4.09) rankings of achievement of project objectives • See Table 2 attached

21. Conclusion • Students are involved in a simulated audit which requires them to apply auditing procedures, identify and correct accounting errors, document working papers, and use audit software. • A team approach enables students to learn from each other and to interact with other students with diverse backgrounds.

22. Conclusion- continued • Leadership and interpersonal skills are important in resolving audit problems in the team approach. • Students are generally “very satisfied” with project characteristics concerned with the “team approach,” the “senior/staff designation,” and the “evaluation process.” • Students indicate a high degree of satisfaction for the attributes used to evaluate team members and generally agree that the project relates theories of accounting and auditing to practice.

23. Conclusion • Questions ? • Comments?

24. Presentation Recommendations • Do not simply read your slides • Do not try to put too much information on one slide • Prenumber your slides • Provide a copy of your slides at least 24 hours before presentation • Try to give each team member equal time for presentation