This simulation affords an opportunity for learning to audit system development for an accounting application. The simulation responds to the growing emphasis on controlling system development for complying with the internal control assurance requirements of Section 404 of the Sarbanes‐Oxley Act of 2002 (U.S. House of Representatives). Because of the lack of detailed accounting standards for vendor incentives, learners have to construct a working definition of “systematic and rational” allocation of incentives in order to develop audit objectives and procedures. In the simulation, learners (1) develop objectives for auditing the specific project of migration of legacy code for vendor incentives and the system development for a group of projects, (2) design audit procedures to achieve the audit objectives, (3) execute the audit procedures by querying the databases, and (4) communicate objectives, procedures, and results in a report. The simulation is staged with conversations among audit staff members and the company's system development manager, databases containing application test data and program library transactions, and readiness questions. Although the databases are supplied in the form of Microsoft Access® files, the simulation can be worked with any database query tool. The simulation helps learners develop their capabilities for designing audit objectives and procedures for testing system development and for querying databases.
