This instructional case provides students with the opportunity to perform realistic audit tasks using evidence obtained from an actual company that experienced fraud. Designed for use in auditing courses that cover internal control, these materials help instructors develop their students' understanding of the control environment concepts presented in SAS No. 78 (AICPA 1995), Consideration of Internal Control in a Financial Statement Audit, and fraud risk assessment presented in SAS No. 99 (AICPA 2002), Consideration of Fraud in a Financial Statement Audit. The case involves making a series of fraud risk assessments based on company background information and a realistic control environment questionnaire. Students also are required to write a professional memo to the audit manager explaining and providing support for their assessments.
An integral part of the learning process for this case is the debriefing of students, along with the resulting class discussions. Many students are shocked to learn that an actual fraud occurred at the company upon which the Dickinson case is based. Students' recognition that control environment weaknesses may result in the opportunity for fraudulent activity increases their appreciation for what might otherwise seem to be mundane questioning and evidence collection. Thus, the Dickinson case provides a very practical and concrete way to develop students' knowledge of the control environment component of internal control. Further, this case provides students with exposure to a higher‐level audit task that requires a more global understanding of the audit. This can enhance their appreciation of the audit function and the critical role of professional judgment.
