Including audit regulation in the accounting curriculum

Research in Accounting Regulation 26 (2014) 118–131

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Research in Accounting Regulation journal homepage: www.elsevier.com/locate/racreg

Including audit regulation in the accounting curriculum David Gilbertson ⇑, Terri Herron Western Washington University, United States The University of Montana, United States

a r t i c l e

i n f o

Article history: Available online 11 March 2014 Keywords: Audit regulation Audit education PCAOB Peer review Disciplinary action

a b s t r a c t Audits and auditors are regulated to uphold audit quality, thus regulation is important to the public interest and clearly impacts firms and CPAs. Moreover, the reach of audit regulation has expanded greatly in the last decade with the establishment of the Public Company Accounting Oversight Board (PCAOB). Recent research and calls from the profession point to enhancing the coverage of audit regulation in the accounting curriculum so that students understand the consequences of failing to adhere to professional standards. In this paper, we propose regulatory content for inclusion in the curriculum, we survey and catalog existing auditing textbooks and other educational materials for regulatory content, and we suggest flexible alternatives for incorporating this topic into the curriculum. It is our hope that, with these resources, faculty can more effectively include audit regulation in the classroom and achieve a high level of student comprehension and learning on the topic. Ó 2014 Elsevier Ltd. All rights reserved.

1. Introduction/motivation With the passage of the Sarbanes–Oxley Act in 2002 (hereafter ‘‘the Act’’) and the birth of the Public Company Accounting Oversight Board (PCAOB or the ‘‘Board’’) shortly thereafter, a multi-faceted regulatory model has emerged for the auditing profession, governing auditors themselves and the audits that they perform. Though states are the final regulators of CPAs licensed in their jurisdictions, and the Securities and Exchange Commission (SEC) regulates auditors as needed, the PCAOB and the American Institute of Certified Public Accountants (AICPA or the ‘‘Institute’’) regulate the profession through routine inspections and the fielding and investigation of complaints. The PCAOB’s periodic inspection program applies to a firm’s public company audit practice; the AICPA’s Peer Review Program (PRP) applies to a firm’s non-public client ⇑ Corresponding author. E-mail addresses: [email protected] (D. Gilbertson), terri. [email protected] (T. Herron). http://dx.doi.org/10.1016/j.racreg.2014.02.013 1052-0457/Ó 2014 Elsevier Ltd. All rights reserved.

audit practice. AICPA members must also comply with the AICPA’s ethics standards through a separate Professional Ethics program. Firms and CPAs with negative findings in inspection, PRP, or ethics investigations risk fines, penalties, or losing their ability to practice in the public company audit arena and/or their membership in the AICPA. These consequences may result in the loss of licensure if a state board so acts. The PCAOB was created in 2002 by the Sarbanes–Oxley Act (SOX), in response to public outrage over financial statement frauds perpetrated by major companies such as Enron, WorldCom and Tyco. The Board inspects auditors, establishes audit standards and disciplines lawbreakers. The same public scrutiny of the audit profession led the AICPA to overhaul its Quality Control Standards in 2010. PCAOB Chairman James Doty has stated ‘‘the global audit firm is not too big to fail; it is too important to leave unregulated’’ (Doty, 2011). In short, accounting regulation is a topic vitally important to both firms and individuals in the profession.1 1

See Appendix D for a list of acronyms related to audit regulation.

D. Gilbertson, T. Herron / Research in Accounting Regulation 26 (2014) 118–131

Regulation is imposed to uphold audit quality, thus it is important to the public interest and clearly impacts firms and CPAs. Something of such importance should be incorporated into the accounting curriculum (Arens & Elder, 2006), but typically it receives only tangential coverage. AACSB’s Accounting Accreditation Standards include ‘‘the ethical and regulatory environment for accountants’’ in its list of curriculum content areas in Standard A6 (AACSB, 2013). In January 2007, the American Accounting Association’s Auditing Midyear Conference included a panel titled ‘‘The PCAOB Inspection Process: What Your Auditing Students Should Know.’’ The goal of the discussion was to offer educators suggestions to prepare students for careers in auditing. ‘‘Panel members emphasized that students, especially those planning to take positions at firms that audit public companies, should have knowledge of SOX, the PCAOB, and its inspection process, as well as the SEC’s regulatory role, including an understanding of the regulations affecting auditors of public companies.’’ (Riley, Jenkins, Roush, & Thibodeau, 2008, pA20). A more recent survey of staff/senior auditors at five large firms confirmed the importance of studying regulation, ranking SEC regulation2 as ninth out of the 23 topics considered most important to their positions as auditors and as sixth for needing more emphasis in the accounting curriculum (Frecka & Reckers, 2010). Accounting educators have also emphasized the value of regulatory materials in the classroom. Miller (2007) suggests using PCAOB inspection reports as a way to underscore the relevance of topics covered in an auditing course. Daughterty and Pitman (2009, p81) propose using cases based on PCAOB inspection reports to ‘‘reinforce students’ understanding of the practical matters involved in appropriately obtaining, evaluating, and documenting audit evidence.’’ Gilbertson and Herron (2009, pA16) find similar outcomes using PCAOB enforcements as case studies of audit failures. They report that ‘‘this ‘watching the train wreck’ approach is a very vivid, effective teaching method.’’ Gramling and Watson (2009, pA2) argue that analysis of peer review deficiencies ‘‘provides educators of current and future auditors of non-public clients with areas of focus for improving audit quality.’’ The purpose of this paper is to provide alternatives for including auditor3 regulation in the accounting curriculum. First, we propose regulatory content for inclusion in the curriculum. Second, we survey and catalog existing auditing textbooks and other educational materials for regulatory content. Third, we propose flexible alternatives for incorporating the content into the curriculum. 2. Regulation of auditors – What students should know Regulation of the auditing profession is a complex maze of various groups responsible for promulgating standards or monitoring compliance with various rules, while the ultimate authority to license individuals and firms rests with 2

No other topics on the list referred to regulation. We use the terms auditor regulation and audit regulation interchangeably to refer to regulation applicable to firms conducting audits and individuals holding a CPA license. 3

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State Boards of Accountancy. Some of the rules apply to audit engagements, some apply to firm practices, and yet others apply to behavior of individual CPAs. To start, students should know which regulatory bodies do what in this regulatory puzzle. We have grouped these regulators into three functional categories: Gatekeepers, Standard Setters, and Enforcement Authorities. Gatekeepers are bodies that have authority to admit auditors to practice or to bar them. Standard Setters establish standards that govern the firms’ quality control, conduct of audit engagements, and individual CPA behavior. Enforcement Authorities monitor firms’ and CPAs’ compliance with those standards. Note that some entities play multiple roles in accounting regulation. Fig. 1 depicts these bodies and their roles. 3. Auditor regulation curriculum resources The above discussion demonstrates the multi-dimensional nature of auditing regulation. Many bodies are charged with multiple roles. Faculty need to facilitate the inclusion of audit regulation in the accounting curriculum. Partial motivation for this paper is the authors’ conviction that there are very few resources to support faculty who wish to include auditor regulation in their classes and that resources that do exist are highly fragmented. To assess this belief, we surveyed the content of six leading auditing textbooks4, and summarized the results in three ways: number of in-chapter pages in each textbook devoted to discussion of regulatory bodies and programs with regulatory roles (Table 1); extent of end-of-chapter (EoC) items available in each textbook (Table 2); and an overall summary of the learning domain distribution addressed in EoC materials for all six textbooks combined (Table 3).5 We reviewed the six chosen textbooks and tallied the number of cumulative pages that related to bodies with regulatory roles (Table 1, Panel A) or the regulatory programs (Table 1, Panel B). We excluded pages that discussed actual audit standards for public, private, or nonprofit entities, since this is the primary role of auditing textbooks, and most of an audit text’s pages are devoted to these standards. The exception was Generally Accepted Government Auditing Standards (GAGAS); because some audit textbooks cover GAGAS while most do not, we included coverage of actual GAGAS in the page count for the Government Accountability Office (GAO) presented in Table 1 combined with coverage of the GAO per se. Overall, coverage of regulatory topics varied widely between textbooks and between topics. Instructors can review this table as an initial cue on regulatory topics included and emphasized in a particular textbook, then use this information in selecting curriculum resources to enhance the textbook. It should be noted that, without exception, regulatory 4 We surveyed the five most popular texts according to a 2003 AAA study [10], plus one new text. 5 In providing information on regulatory topics within textbooks, we do not intend to reflect positively or negatively on any single book. We took a quantitative approach and limited our evaluation to regulatory topics, admittedly a very minor portion of auditing textbooks. The analysis is intended to provide a picture of regulatory coverage for these textbook’s adopters. It is not intended to direct an adoption decision, as many factors are considered in this decision.

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CPA Firms

Engagements

Gatekeepers

State Boards

Individual CPAsb State Boards

PCAOB

SEC

Standard Seers

AICPA (QC, SECPS) PCAOBa

AICPA (SAS, ET)

AICPA (ET)

PCAOB (AS, Rules) SEC (Ind. Rules) GAO (GAGAS)

Enforcement Authories

AICPA (PRP)

† a

b

PCAOB (Inspecons)

AICPA (PRP)

AICPA (JEEP)

PCAOB (Inspecons)

PCAOB (Enforcements)

SEC (AAERs) State Boards

State Boards

See Appendix D for a lisng of acronyms. The PCAOB has the authority to establish standards for pracce review; however, it has adopted the AICPA’s QC standards and the SEC Pracce Secon rules in effect on 4/17/03. Doed border indicates the potenal for a separate PCAOB role. In addion, SOX (through the PCAOB) mandates certain firm personnel rotate off the audit at various intervals. The PCAOB is also exploring audit firm rotaon and partner signature on reports. Individual behavior excludes behavior on engagements (middle column) or behavior related to firm pracces (le column). Examples include behavior of CPAs in non-public pracce and acts discreditable to the profession.

Fig. 1. Regulatory Bodies and Roles.  See Appendix D for a listing of acronyms. aThe PCAOB has the authority to establish standards for practice review; however, it has adopted the AICPA’s QC standards and the SEC Practice Section rules in effect on 4/17/03. Dotted border indicates the potential for a separate PCAOB role. In addition, SOX (through the PCAOB) mandates certain firm personnel rotate off the audit at various intervals. The PCAOB is also exploring audit firm rotation and partner signature on reports. bIndividual behavior excludes behavior on engagements (middle column) or behavior related to firm practices (left column). Examples include behavior of CPAs in non-public practice and acts discreditable to the profession.

topics are scattered throughout the book. None of the textbooks had a regulatory chapter or major section of a chapter that grouped the majority of regulatory coverage in one place. Comments on the textbook discussion of specific bodies and programs follow. 3.1. Bodies with regulatory roles The state board is the first contact for those aspiring to enter the auditing profession, as they register to sit for the CPA exam and subsequently apply for licensure. Every CPA should know about the workings of their State Board and the scope of their regulation, yet textbooks devote almost

no coverage to this topic. The AICPA is the largest organization of auditors in the U.S. It leads the way in development of standards and represents the profession in public, before the Congress, and in the courts. Despite the importance of the AICPA to auditors, only one textbook has significant coverage of the Institute and how it functions. The PCAOB has broad regulatory power over persons and firms who conduct audits of public companies, brokers, and dealers. Although all textbooks mention the Board, only two devote meaningful text discussion to the PCAOB. The SEC has overarching responsibility for the securities markets in the U.S., including the accounting standards used in SEC filings and the conduct of audits of financial statements

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D. Gilbertson, T. Herron / Research in Accounting Regulation 26 (2014) 118–131 Table 1 Coverage in leading textbooks – discussion within text.a Auditing textbook

Panel A: bodies with regulatory roles

Arens, Elder, and Beasley (2006) Hooks (2011) Louwers, Ramsay, Sinason, Stawser, and Thibodeau (2011) Messier, Glover, and Prawitt (2010) Rittenberg et al. (2012) Whittington and Pany (2012)

Panel B: specific regulatory programs

State Boards

AICPA

PCAOB

SEC

ASB

GAO

AICPA peer review

AICPA ethics programs

PCAOB inspections, enforcement programs

None ⁄ <1

1 1 ⁄

<1 2 <1

2 <1 <1

⁄ ⁄ ⁄

2 3 4

2 1 3

<1 None 2

None None 2

None ⁄ 1

<1 1 3

<1 2 1

1 ⁄ 1

<1 <1 1

⁄ ⁄ <1

3 <1 2

<1 <1 1

1 ⁄ <1

⁄ = One paragraph or less; <1 = less than one page; all others = approximate number of pages in total. Counts exclude pages devoted to actual audit and independence standards for public, private, and nonprofit entities (which consume most pages in audit textbooks). Counts include pages devoted to government audit/independence standards and quality control standards, where applicable (which varies by textbook). Counts are approximate and consider non-contiguous paragraphs as if they were contiguous. a

Table 2 Coverage in leading textbooks – end-of-chapter items.a Auditing textbook

Arens et al. (2006) Hooks (2011) Louwers et al. (2011) Messier et al. (2010) Rittenberg et al. (2012) Whittington and Pany (2012)

Panel A: bodies with regulatory roles

Panel B: specific regulatory programs

State boards

AICPA

PCAOB

SEC

ASB

GAO

AICP peer review

AICPA ethics programs

PCAOB inspections, enforcement programs

None Min Min None None

Adeq Adeq Min Min Min

Adeq Subst Min Adeq Subst

Adeq Adeq None Subst Adeq

Min Min None Min Adeq

None Min Min Min Adeq

Adeq Adeq Min None Adeq

None None None None None

None Min Min None Subst

Min

Adeq

Subst

Adeq

Min

Min

Subst

None

Adeq

None = 0 items; Min (minimal) = 1–3 items; adeq (adequate) = 4–6 items; subst (substantial) = >7 items. a Coverage is classified in broad categories based on numbers of end-of-chapter (EoC) questions, exercises, problems, cases, or other such assignable items. Categories are based on counts of items, regardless of type or depth, identified across all chapters/modules in the textbook. Any supplementary items that may be available in instructor resource guides, study guides, or textbook websites were not included.

contained in those filings. Auditors who violate those standards face serious disciplinary sanctions from the SEC, and AAERs can be effectively used as a teaching tool in auditing courses (e.g., Hansen, 2010). Yet, only one textbook has meaningful coverage of the SEC as a regulator of auditors. Auditing textbooks devote hundreds of pages to standards issued by the Auditing Standards Board (ASB), but most devote virtually no coverage to the composition or organization of the ASB, which also issues Quality Control (QC) standards, or how it functions. In its regulatory role, the GAO issues the Yellow Book for audits of government organizations, programs, and activities. Most practicing auditors will encounter GAO standards at some point in their careers. Coverage of the GAO and its standards vary widely, with a 2003 survey indicating that fewer than 15% of first audit courses include coverage of government auditing topics (American Accounting Association, 2003). Three of the six textbooks had meaningful coverage of this topic, while the other three had very little coverage or none at all. 3.2. Specific regulatory programs The AICPA oversees its PRP, and the peer review is administered by an entity approved by the AICPA, typically

a state CPA society. While QC standards are written by the ASB, the standards for conducting a peer review are written by the AICPA Peer Review Board. In this heading, we included coverage of the AICPA’s PRP per se as well as QC standards. Understanding deficiencies reported in the peer review process is important in furthering audit quality (Gramling & Watson, 2009). Coverage varied substantially, from three pages in two textbooks to less than one page in another. The AICPA’s Professional Ethics Division investigates potential disciplinary matters involving members of the AICPA and members of those state CPA societies participating in the JEEP program. Discussion of this regulatory program ranged from two pages in one textbook to no coverage in another text. The PCAOB has an extensive inspection program, with detailed reports on each inspection made available to the public. When investigations are conducted and violations are found, the PCAOB can impose appropriate sanctions. The publicly available inspection and enforcement reports provide a rich source of examples for use in the classroom, and professional journals have summarized findings of this relatively new regulatory program and compared it to the AICPA’s PRP (Gramling & Watson, 2009; Hermanson & Houston, 2008; Herron & Gilbertson, 2011). Most textbooks have very little coverage of this topic; two have none at all.

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3.3. End-of-chapter (EoC) items on regulatory bodies and programs Next, we evaluated the EoC items6 included in each of the six textbooks that related to bodies with regulatory roles or the regulatory programs (Table 2). The purpose is to give instructors a sense of the classroom-ready assignments (with solutions) available within the textbooks that could be used to incorporate regulation in the curriculum. Coverage was determined by counting EoC items of all types – discussion questions, multiple choice, problems, cases, and internet assignments – regardless of where the items were located, treating each item equally. Though this is an imperfect picture of ‘‘coverage,’’ it does give a sense of in-textbook resources with solutions available to the instructors. A few observations regarding EoC items are of note. Because auditing textbooks are written with different emphases (e.g., public vs. non-public audits) and scope (e.g., include GAGAS or not), it is no surprise to find variance in EoC item availability across the regulation topics. Textbook authors must pick and choose how to use the page space. That said, it is clear that some textbooks provide more regulatory EoC items than others. It is also apparent that EoC items rarely address some regulatory bodies or programs. EoC items on state boards – what they are, how they function, their composition, how they regulate – are very sparse. There were no items identified in any of the six textbooks that addressed the workings of the AICPA Ethics Programs. Yet, this is one of the most active regulatory programs and touches almost all CPAs and CPA firms. On the upside, all but one textbook had either adequate or substantial EoC items on two regulatory bodies – the PCAOB and the SEC. Yet, none of the six textbooks included at least adequate (four or more) EoC items on all the bodies and programs listed in Table 2. One interesting observation is the inconsistency between extent of topical coverage within the textbook discussion and number EoC items available in a textbook. Half of the textbooks had three pages of coverage on a body or program within the textbook discussion; however, those books had either minimum (1–3) or no EoC items on those same topics. Conversely, three textbooks devoted one or fewer pages of in-text discussion to a regulatory body or program; yet, these same textbooks provided substantial (7 or more) EoC items throughout the text on these topics. 3.4. Summary of end-of-chapter (EoC) items by learning domain

in analysis). Thus, instructors desiring a higher level of learning should include assignments that progress from the basic to the higher levels in Bloom’s taxonomy. Using a method similar to Davidson and Baldwin (2005), we examined the EoC materials available in the six textbooks to determine to what learning levels the regulation materials relate. The most basic level is knowledge. Students learning at this level are asked to learn basic facts about a regulatory body or program. The next level is comprehension, where students might describe or differentiate between regulatory bodies and programs. The application learning level then involves applying knowledge and comprehension about a regulatory body or program to a specific situation. Analysis would require a more in-depth application of knowledge and comprehension. For our purposes, we combined the application and analysis levels, because they are essentially the same in this context. The highest levels are synthesis and evaluation. Synthesis involves using a larger and perhaps competing fact set in analyzing a scenario. Evaluation is the highest level of learning and includes decisions and judgments requiring justifications for a conclusion or position. For the reason mentioned above, we combined the synthesis and evaluation levels into one category. Thus, we used a simplified version of Bloom’s taxonomy that combined the four highest levels into two categories. Table 3 presents the results of this analysis. Combining all the selected textbooks’ EoC materials on regulation, we categorized those materials in the four categories derived from Bloom’s taxonomy and provided examples of EoC items appropriate for each category. The purpose of this analysis is to illustrate the general availability of EoC materials as they relate to the progression in the learning process. As Table 3 illustrates, 82% of the EoC materials on regulation apply to the two most basic levels of learning – knowledge and comprehension – while only 5% of the EoC materials provide opportunity for synthesis or evaluation regarding audit regulation. Faculty desiring higher levels of learning on regulation will have a more difficult time finding appropriate advanced EoC items in textbooks, indicating a need for faculty to search for additional assignments outside of textbooks. The lack of EoC materials applicable to higher levels of learning is consistent with Davidson & Baldwin’s (2005) findings regarding EoC materials on two intermediate accounting topics found in multiple editions of 14 textbooks. They examined and classified more than 6000 EoC items, with only 9% of the items being classified at the synthesis or evaluation levels. 3.5. Other considerations

Faculty determine to what extent students should master knowledge of auditing regulation in designing content to include in the curriculum. They then align the level of learning desired with the assigned readings and EoC materials. One theory of learning that is useful in evaluating course assignments is Bloom’s taxonomy (Bloom, 1956). Bloom describes six levels of learning through which learners progress, starting with knowledge (learning facts, definitions) and ending with evaluation (using arguments, justifications 6

One text included discussion questions interspersed within the chapter, and we counted those as if they were end-of-chapter items.

Audit education is trending towards increased use of team projects, student presentations, cases, and online research (American Accounting Association, 2003), all of which have potential to promote higher learning levels. In their oft-cited ‘white’ paper, the largest accounting firms emphasized the importance of developing higher-level intellectual skills: ‘‘. . .to use creative problem solving skills in a consultative process. . .to solve diverse and unstructured prob-

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Table 3 Combined coverage in leading textbooks – end-of-chapter items by learning domain. Category

Coverage

Knowledge

40%

Comprehension

42%

Application/ analysis

13%

Synthesis/ evaluation

5%

Example            

Describe the role of the AICPA in developing auditing standards For how long do PCAOB standards require auditors to retain documentation? Go to the PCAOB web site. Are there any auditing standards currently proposed but not yet final? Identify the most recent auditing standard and discuss the reason that the board issued it What is meant by the term quality control as it relates to CPA firms? What is the relationship between the AICPA Code of Conduct and the codes of the various states? Comment on the PCAOB inspection process and how it may improve audit quality Associate the following procedures [from a list] with the applicable element of quality control How was SEC Rule 2(e) associated with Arthur Andersen going out of business? What are the pros and cons of having the same auditing standards for public and non-public entities? Evaluate whether the Sarbanes-Oxley Act and PCAOB regulation are worth their cost In assessing the [PCAOB disciplinary order], indicate whether the sanctions against the auditor/audit firm seem reasonable

lems in unfamiliar settings. . .to comprehend an unfocused set of facts; identify, and, if possible, anticipate problems; and find acceptable solutions.’’ (Arthur Andersen & Co, 1989, p6). We believe that textbooks should include more advanced EoC materials if students are to adequately understand the issues related to audit regulation at these higher levels. One way to do this is to include a comprehensive project that provides opportunity for progressive learning. Appendix A illustrates such a project. Bonner (1999) suggested 13 different teaching methods available to accounting instructors. Assuming some traditional lecture on regulation occurs, adding a project such as that in Appendix A would include at least six of these 13 methods of teaching. This project also provides the opportunity for an instructor to teach multiple learning objectives and address multiple learning styles. Another approach is to use EoC materials in such a manner that a comprehensive curriculum results. Appendix B illustrates how readings and assignments from Rittenberg, Johnston, and Gramling (2012) could be sequenced to achieve the higher levels of learning. We selected this textbook for our illustration since it was the only one that touched on all of our identified topics within text discussions and had EoC material on all topics except the AICPA Ethics programs (for which no textbook had EoC materials). Appendix C lists sample resources found outside of textbooks that can be used to teach audit regulation. 4. Designing a regulation curriculum The final decision in creating a curriculum covering audit regulation is where to place the resources and instruction within the overall accounting curriculum.7 With the volume of information, complexity of organization, number of regulatory agencies, and variety in audit practices amongst firms, it is not feasible to cover all topics at the greatest level of depth (Ballou, Cashell, & Heitger, 2008). Faculty will need to make that choice based on their programs’ mission and learning goals, which reflect what is most appropriate for their 7 Some topics may be covered in non-accounting courses such as business law or introduction to business courses. For simplicity, we are assuming the curriculum will be placed exclusively in accounting courses.

particular students and employers. We suggest four approaches for integrating audit regulation topics into the accounting curriculum: vertical, spiraled, compartmentalized, and stand-alone. The first two approaches involve multiple courses, while the latter two approaches involve single courses. While each approach has advantages and disadvantages, each institution will need to weigh these with the overall mission of the accounting program, resources available, and fit within the existing curriculum structure. 4.1. Curriculum approaches The vertical curriculum approach segments the curriculum into successive course coverage, where material covered in prerequisite courses is assumed mastered and not repeated in later courses. For the regulation curriculum, this could be accomplished by placing information on the regulatory bodies within appropriate courses such as Intermediate I and/or Accounting Information Systems, followed by information on the regulatory programs, standards, and outcomes in the first auditing course. An alternative example is using a two-sequence auditing course. The advantage of vertical integration is that course time is used efficiently by not repeating concepts from course to course. The disadvantage is that students may not appropriately retain what is learned in early courses, making the curriculum in the later courses less effective. Vertical integration also requires coordination and buy-in amongst multiple course instructors. The spiraled curriculum approach is similar to the vertical approach in that successive courses are used but different in that the material covered in earlier courses is repeated in later courses, with successively more in-depth exposure. For example, regulation concepts covered in Intermediate I would then be repeated in a first auditing course, followed by more basic learning on programs, regulatory standards, and outcomes that would also be in a first auditing course. This could be followed by a second audit course that reviews the regulatory basics and programs and then requires in-depth analysis of the programs. The main advantage to a spiraled curriculum is that concepts are reinforced, increasing the likelihood that students can more ably achieve higher levels of learning. The disadvantage is it takes more space and time in the curriculum.

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The compartmentalized approach places the entire regulatory curriculum within one course, most logically the first auditing course. Schools with shorter terms may find this fits better in a second term of auditing. The advantage is that the learning is concentrated in one place, and the importance of regulation can more easily be emphasized. The disadvantage is that achieving the higher levels of learning may be challenging due to time constraints within a single course. The stand-alone approach uses a short-course that is entirely devoted to audit regulation. Such an approach allows more in-class discussions and a pointed focus on the complexities of auditing regulation. This side-steps the issue of making room within the existing auditing courses, but it adds the constraint of finding resources to add such a course to the curriculum.

4.2. Example implementations The authors’ institutions (two different medium-size public universities) have incorporated regulation into their curricula using three different approaches. The first implementation was a compartmentalized approach using regulatory reports to illustrate auditing standards in a first undergraduate auditing course. The course learning objectives included understanding the environment of auditing, including regulation of auditors and the professional standards that govern the conducts of audits. In winter 2013, the instructor introduced the PCAOB regulatory model. Later in the chapter covering audit documentation, the class discussed PCAOB Release No. 105-2012-008 (November 13, 2012), a disciplinary order dealing with falsification of audit documentation. The instructor collected informal feedback after the discussion. Comments ranged from positive to enthusiastically positive. Students liked the realworld example, felt they gained a better understanding of the PCAOB disciplinary process, and said it reinforced their learning of audit documentation. The second implementation was a compartmentalized approach more comprehensively addressing regulation and was used in the same undergraduate course as the first implementation, but in a later term (see relevant learning objectives above). In spring 2013, 27 students completed assignments #1–#5 in the sample case in Appendix A. Some assignments were completed individually, and some were completed in groups. Students made a class presentation at the end. On the mid-term essay exam, students answered the following questions:8 (1) ‘‘For five of the following organizations, briefly describe its role in the regulation of audits: The AICPA, State Boards of Accountancy; the SEC; the PCAOB; the Auditing Standards Board; the GAO.’’ (2) ‘‘Compare and contrast the AICPA’s Peer Review Program with the PCAOB’s Inspection Program.’’

Students’ scores on these questions ranged from 80% to 100%, with the exception of one outlier (30%), indicating that they had learned both the knowledge of the regulatory bodies (question 1) and critical analysis of the two programs (question 2). The third implementation was a stand-alone approach in a short elective course for graduate accounting students (1 semester credit) at the other author’s institution. The entire course was focused on the AICPA peer review and PCAOB inspection/enforcement programs. Course learning goals included mastering quality control standards, understanding roles of regulatory oversight from government regulatory bodies, and understanding the self-regulatory process administered by the AICPA. The course ran during two weekends in September 2012. The culminating project was analyzing a PCAOB inspection report and an AICPA peer review report, with assigned questions ranging from summarizing the reports (knowledge level) to commenting on whether the reports protect the general public (synthesis). In April 2013, all students who took the course were surveyed (see Table 4). The questions were of three types: content retention, perceived learning, and course feedback. Retention questions indicate that students had retained selected content seven months after completion of the short course, with most students answering on the correct end of the response scale. Table 4 summarizes mean responses to these statements. Students appropriately recognized that inspectors hired by the PCOAB carry out the PCAOB’s inspection program and that the PCAOB does have the ability to restrict practice privileges. They also recognized that the peer reviewers conducting the PRP are not selected by the AICPA and that the AICPA cannot restrict practice privileges. Table 4, Panel B presents results of perceived student learning, indicating that students felt that they had learned the concepts about the two regulatory programs. Mean agreement scores ranged from 3.8 out of 4.0 (I can more easily locate PCAOB inspection reports) to 3.1 (I have a better understanding of how the PCAOB regulatory program protects the public interest). Table 4, Panel C presents results for feedback questions. Students’ perceptions of the course were positive, with the strongest response being that the course should be offered in the future (mean 3.9 with 4.0 = strongly agree). Importantly, students agreed that the course helped them learn about audit regulations (mean 3.1), audit deficiencies (mean 3.0), and audit standards (mean 3.2), as well as differences between the PCAOB and AICPA regulatory programs (mean 3.5). Importantly, these measures were all captured seven months after the conclusion of the course, indicating residual learning and positive perceptions about learning and the course. Overall, students positively received inclusion of audit regulation in the curriculum in these three very different implementations. In addition, students learned and retained concepts on audit regulation. Students enjoy the topic, and it is effectively learned. 5. Summary

8 Students chose five out of seven essay questions, with two of the seven being these regulation questions. Out of 27 students, 17 answered question 1 and 20 answered question 2.

This paper identifies important topics related to audit regulation, as well as curriculum resources and possible curriculum approaches. We find that in-textbook

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D. Gilbertson, T. Herron / Research in Accounting Regulation 26 (2014) 118–131 Table 4 Stand-alone course post-assessment.a

Meanb

a b

Panel A: content retention The PCAOB’s regulatory program is carried out by inspectors hired by the PCAOB The AICPA’s regulatory program is carried out by reviewers hired by the AICPA The PCAOB does not have the ability to restrict certain practice privileges through its regulatory program The AICPA has the ability to restrict certain practice privileges through its regulatory program

3.8 1.6 2.1 2.2

Panel B: perceived learning I have a better understanding of the environment in which auditors are regulated I have a better understanding of the role of the PCAOB in regulating certain auditors I have a better understanding of the role of the AICPA in regulating certain auditors I have a better understanding of how the PCAOB regulatory program protects the public interest I have a better understanding of how the AICPA regulatory program protects the public interest I can more easily locate PCAOB inspection reports I can more easily locate AICPA peer review reports I could have a brief but intelligent conversation with an auditor about audit regulation I am more comfortable reading an AICPA peer review report I am more comfortable reading a PCAOB inspection report

3.4 3.4 3.4 3.1 3.2 3.8 3.7 3.2 3.4 3.3

Panel C: course feedback I found the assignments and project useful in helping me to learn about audit regulation I found the assignments and project useful in helping me to understand what audit deficiencies are The assignments and project helped illustrate the differences between the PCAOB and AICPA regulatory programs I enjoyed these assignments and project The learning value in assignments and projects was worth the time spent on them The assignments and project were engaging The assignments and project generated my interest in the class The topic of audit regulation fit nicely into the context of MAcct curriculum The assignments and project facilitated classroom discussion I would like to read more PCAOB inspection reports in this class I would like to read more AICPA peer review reports in this class The assignments and project helped me understand auditing standards The class should be offered in the future The assignments and project increased my interest in auditing as a career choice

3.1 3.0 3.5 2.8 3.0 2.9 2.8 3.7 3.5 2.7 2.4 3.2 3.9 3.1

17 out of 17 students in the course responded to the survey, administered seven months after course completion. Response scale: 1 = strongly disagree, 2 = somewhat disagree, 3 = somewhat agree, 4 = strongly agree.

discussions of regulation can be sparse, as can end-ofchapter items in textbooks. We also find that the extent of in-textbook discussions can be incongruent with the quantity of end-of-chapter items. Instructors wishing to adequately cover audit regulation will likely need to rely on non-textbook resources and assignments to achieve higher levels of learning on the subject of audit regulation. Given the critical role of regulation in the audit profession, students entering the profession should be well versed in the regulatory mechanisms to which they and their firms will be subject. Though adding topics to or redesigning the curriculum is always a challenge, we believe doing so answers calls to integrate ‘‘quality, integrity, transparency, and accountability’’ in the curriculum, including ‘‘helping new entrants understand what it means to be a member of the profession’’ (PricewaterhouseCoopers, 2003, p5–6).

Appendix A. Illustrative comprehensive regulation project Note: The instructor can select one or more of the assignments listed, which start with basic knowledge and progress to synthesis and evaluation. Some assignments lend themselves to group work. Purpose: The purpose of this project is to provide the opportunity for students to obtain a clear understanding of the regulatory environment over U.S. audit firms.

Method: Students will (1) read information in the textbook, (2) read supplemental articles, (3) obtain information from websites, and (4) learn detailed information about firms’ peer review and PCAOB inspection/enforcement results and individual CPAs’ disciplinary sanctions. Unless stated otherwise, all assignments are to be in a written format. The students will present certain findings to the class. Background Reading: Students will first learn about bodies involved in accounting regulation. Then, students will learn about the regulatory programs, ultimately examining specific cases of violations made public through the regulatory process. A partial reading list is provided here.  Read pp ______ of the textbook.  Read the following articles: o Graham, G. (2009, May). Introducing the new principles-based peer review standards. Journal of Accountancy, 39–43. o Hermanson, D., & Houston, R. (2008, December). Quality Control Defects Revealed in Smaller Firms’ PCAOB Inspection Reports. The CPA Journal , 36–39. (found online at www.nysscpa.org) o Herron, T. & Gilbertson D. (2011, May). When auditors fail to audit: Themes from PCAOB enforcements. The CPA Journal, 50-57 (found online at www.nysscpa.org).

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o Roybark, H. (2009). PCAOB Inspection Report Card. The CPA Journal (February), 65–69. (found online at www.nysscpa.org). o Riley, R., Jenkins, J., Roush, P., & Thibodeau, J. 2008. Audit quality in the post-SOX audit environment: What your auditing students must know about the PCAOB inspection process. Current Issues in Auditing, A17–A25. o Wegman, J. 2008. Government regulation of accountants: The PCAOB enforcement process. Journal of Legal, Ethical, & Regulatory Issues, 11(1), 75–94. Read information on the PCAOB Inspection Program on its website. http://pcaobus.org/Inspections/Pages/defau lt.aspx. You may also want to explore the ‘‘Rules’’ that the PCAOB uses for its inspections (see Rules of the Board tab; go to Section 4 of the Rules). Read information on the PCAOB Enforcement Program on its website (http://pcaobus.org/Enforcement/Pages/ default.aspx). You can read the enforcement ‘‘Rules,’’ but they are pretty detailed and focus on procedures. So they may not be too helpful. Read information on the AICPA’s Peer Review Program on its website. (www.aicpa.org). Go to the ‘‘Interest Areas’’ tab and select ‘‘Peer Review.’’ You may find the Q&As document particularly easy to understand. (http://www.aic pa.org/InterestAreas/PeerReview/Resources/FAQs/Dow nloadableDocuments/qandaprp.pdf). Read additional information on the AICPA’s Peer Review Program as it applies to [insert your state] CPAs. This is on the [State] society of CPAs’ website. Read information on the AICPA’s Ethics Enforcement program and ethics standard setting (Professional Ethics Executive Committee). Go to the AICPA website (www.aicpa.org), under ‘‘Interest Areas’’, and select ‘‘Professional Ethics’’ to find this information. Read information about the GAO. On the GAO website (www.gao.gov), read ‘‘About GAO,’’ and then under ‘‘Resources For,’’ select ‘‘The Auditing and Accountability Community.’’

Assignment #1: regulatory bodies and their roles This assignment should demonstrate your understanding of the following regulatory bodies and their roles. At a minimum, address the following points for each organization listed: State Board of Accountancy, AICPA, PCAOB, SEC, ASB, and the GAO.  Organization type (government, private, nonprofit, or some hybrid)  Organization size (and if it has a standard-setting board, how many board members, board composition, how are they appointed, and for how long)  Who the body reports to  Powers the body has to approve or deny practice privileges, and for what market segment  Disciplinary powers of the body, if any  Standard setting authority of the body, if any

Assignment #2: ethics enforcement Briefly describe how CPAs are regulated for their compliance with ethics rules issued by the AICPA or their state boards. Include two examples of an AICPA member disciplined for failure to comply with ethics requirements (found under ‘‘Enforcement’’ in the Professional Ethics section of the AICPA website). Then, include one example of your state board disciplining a CPA licensed in your state for failure to comply with state ethics requirements. For each example, cite the standard or rule violated and discipline handed down. Do you think the disciplinary actions taken by the AICPA and your state board was appropriate? Why or why not? Assignment #3: regulation of audit practice This part of the assignment should demonstrate your knowledge of the two regulatory programs aimed at audit practice (AICPA Peer Review and PCAOB Inspections). At a minimum, this assignment should address who must participate in each program, frequency of the reviews/inspections, what the reviewers/inspectors are looking for, who actually does the reviews/inspections, what is included in the report, and what report contents are publicly available. Be thorough and clear regarding the differences between the regulatory programs. Assignment #4: inspection reports Go to the PCAOB’s web page on Inspections. Select one annually inspected firm and one triennially inspected firm and read their inspection reports. You will know a firm is an annually inspected firm if you see an inspection report posted for each year. There are only about 10 such firms (the largest) falling into this category. Summarize the findings of the inspections, including examples of audit standards violated and audit areas with deficiencies. Did you find the inspection report informative about the audit firm? Did the firm have a response, and if so, what was the tone in the response? Do you think it is a fair picture of that firm’s audit practice? Why or why not? Assignment #5: enforcement reports Go to the PCAOB’s web page on Enforcements. Propose via email two reports you would like to study (send them to your instructor, who will evaluate your proposed reports). Please select a report that focuses on audit issues (not auditor issues like independence or noncooperation). Also, acquire the client’s 10-K or 10-KSB for the audit year in question (the client and SEC filing date will be specified in the enforcement report). This will give you some perspective on the audit deficiencies. Summarize the findings in the enforcement report for this audit firm. You should cover the facts of the case, the PCAOB findings, characteristics of the audit firm, characteristics of the client, and problems noted in the enforcement. If an individual CPA was disciplined as a result of the enforcement, go to the

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appropriate State Board of Accountancy’s website and see if you can determine if the person is still licensed in that state (most states have CPA lookups for this purpose). Reflect on the enforcement report and outcome. Did you perceive it as fair? Were you surprised at the findings and/or disciplinary action? Explain.

the peer review reports on the enforcements; peer review reports do not always stay posted if they are old). Judge whether you think the peer review report or the PCAOB’s reports were more informative, and explain why.

Assignment #6: reporting analysis

Students will make a presentation to the class that covers the high points of cases selected for Assignments #4, #5, and #6. It should include a personal opinion on the regulation of auditors – is it adequate and serving the public under the circumstances?

Select one of the firms that you analyzed in either Assignment #4 or Assignment #5. Locate their peer review report on the AICPA’s website (Your instructor has some of

Assignment #7: final evaluation and presentation

Appendix B. Sample Regulation Curriculum Using Rittenberg et al. (2012) Textbook Regulatory Bodies Bloom’s Taxonomy Levela

EoC Item Recap

Knowledge

1-55

Comprehension 1-48

Comprehension 1-53a

Comprehension 1-62

Comprehension 17-50a

Application/ Analysis

2-46

Access PCAOB, AICPA, IAASB, and GAO websites, answer questions about board membership (appointment, composition, legal authority, public vs. CPA members). Describe roles and responsibilities in standard setting and monitoring quality for the AICPA, IIA, GAO, SEC, PCAOB, and IAASB. Use the SEC webpage to identify recent litigation against a public company or accounting firm, and comment on the litigation. What is the PCAOB’s authority to discipline, what are potential sources of violations invoking discipline, how many orders have been issued to date. Access a specific PCAOB disciplinary order (Taylor, 4/10). Describe violations and sanctions. Are they appropriate? Read a 2005 and 2008 AAER related to one case (specified in EoC item). What was the type of improper professional conduct, what was the SEC’s response in 2005 and 2008? Why did Congress establish the PCAOB, what are the PCAOB responsibilities, how do inspections affect public practice, why can no more than two CPAs serve on the board, who are current board members, to whom do PCAOB

Regulatory Programs

State AICPA PCAOB SEC ASB GAO AICPA AICPA PCAOB Boardsb Peer Ethicsb b Review X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

(continued on next page)

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Appendix B (continued) Regulatory Bodies

a

Bloom’s Taxonomy Levela

EoC Item Recap

Application/ Analysis

6-52

Application/ Analysis

10-86

Application/ Analysis

18-43

Synthesis/ Evaluation

1-56

Synthesis/ Evaluation

1-61

standards apply. How is the PCAOB inspection program related to audit quality, what problems were found in the inspections (quoted in EoC item), why did the PCAOB care about those problems. Questions on IT control issues. Select two inspection reports from the website and be prepared to discuss. From three PCAOB disciplinary orders listed in the EoC item, select and read one. Identify key deficiencies related to revenue cycle, the action the auditor should have taken. Assess whether the auditor had professional skepticism, unethical behavior, and the reasonableness of the sanctions. Read a specified PCAOB enforcement action dealing with a change in materiality. When is it appropriate to change materiality, why was the PCAOB concerned, how was professional skepticism not used. Discusses the role of the PCAOB vs. the ASB in standard setting. Discuss the pros and cons of having the same audit standards for both public and non-public clients. This item addresses a GAO report on Superfund activity. How would the GAO develop evidence for its conclusions, why is the topic important, do you think this GAO activity is an audit (why or why not). How is GAO audit work different from public accounting.

Regulatory Programs

State AICPA PCAOB SEC ASB GAO AICPA AICPA PCAOB Boardsb Peer Ethicsb Reviewb X

X

X

X

X

X

EoC items with multiple parts can address multiple learning levels. We list the highest learning level addressed by the entire EoC item. b To achieve a comprehensive regulation curriculum, the instructor would likely want to supplement student assignments/ activities in this area.

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Appendix C. Non-Textbook Resources PCAOB

Generally

Inspection

Enforcement

AICPA

Generally ASB

QC

Peer Review

Overview of the PCAOB, its organization and its activities: http://pcaobus.org/About/ Gradison, B. & Boster, R. (2010). The PCAOB’s first seven years: A retrospection. Current Issues in Auditing, 4 (1), A9–A20. Moehrle, S., Jonas, G., Kozloski, T., & Reynolds-Moehrle, J. (2012) Developments in accounting regulation: A synthesis and annotated bibliography of evidence and commentary in the 2009 academic literature. Research in Accounting Regulation, 24(2): 45–67. (similar literature reviews are published in earlier issues of this journal). Riley, R., Jenkins, J., Roush, P., & Thibodeau, J. (2008). Audit quality in the post-SOX audit environment: What your auditing students must know about the PCAOB inspection process. Current Issues in Auditing, 2 (2), A17–A25. Links to published inspections reports: http://pcaobus.org/Inspections/ Blankley, A., Kerr, D., & Wiggins, C. (2012) A content analysis of CPA firms’ correspondence following PCAOB inspections: 2004–2010, Research in Accounting Regulation, 24(2): 74–89. Carcello, J., Hollingsworth, & Mastrolia, S. (2011). The effect of PCAOB inspections on Big 4 audit quality. Research in Accounting Regulation, 23(2): 85–96. Daugherty, B., & Pitman, M. (2009). Auditing the auditors: A case on PCAOB inspection reports of registered public accounting firms. Current Issues in Auditing, 3(1), B1–B18. Hermanson, D., & Houston, R. (2008). Quality control defects revealed in smaller firms’ PCOAB inspection reports. The CPA Journal (December), 36–39. Roybark, H. (2009). PCAOB Inspection Report Card. The CPA Journal (February), 65–69. Defond, M. (2010). How should the auditors be audited? Comparing the PCAOB inspections with the AICPA peer reviews. Journal of Accounting and Economics, 49, 104–108. Links to published inspections reports: http://pcaobus.org/Inspections/ Spillane, D. (2004). PCAOB enforcement: What to expect. CPA Journal, 74(9), 32-35. Wegman, J. (2008). Government regulation of accountants: The PCAOB enforcement process. Journal of Legal, Ethical, & Regulatory Issues, 11(1), 75–94. Gilbertson, D., & Herron, T. (2009). PCAOB Enforcements: A Review of the First Three Years. Current Issues in Auditing, A15–A34. Herron, T., & Gilbertson, D. (2011). When auditors fail to audit: Themes from PCAOB enforcements. The CPA Journal (May), 50–57. Overall description of the AICPA, with links to history and governance: http://www.aicpa.org/ about/ Overall description of the ASB, with member and staff bios: http://www.aicpa.org/Research/ Standards/AuditAttest/ASB/Pages/AuditingStandardsBoard.aspx Thorough description of the ASB, its task forces, and its operating policies (22-page PDF): http://www.aicpa.org/Research/Standards/AuditAttest/ASB/DownloadableDocuments/ ASB%20OPERATING%20POLICIES%20DOCUMENT%20(2009-10).pdf Allen, C. (2011). Benefits of Effective Quality Control Systems in Accounting Firms. CPA Journal, 81, 52–57, (January). Schmutte, J., & Thieling, J. (2010). Addressing the New Quality Control Standards. CPA Journal, 80, 52–55, (January). Links to PR Standards, Interpretations, & Guidance: http://www.aicpa.org/InterestAreas/ PeerReview/Pages/PeerReviewHome.aspxhttp://www.aicpa.org/interestareas/peerreview/ resources/standards/pages/default.aspx Explanation of Peer Review program for the public (5 pgs): http://www.aicpa.org/Research/ Standards/PeerReview/DownloadableDocuments/PRSummary.pdf Exhibit A from the Peer Review Standards (flowchart of systems review, about p17; flowchart of engagement review, about 27): http://www.aicpa.org/Research/Standards/PeerReview/ DownloadableDocuments/PeerReviewStandards.pdf FAQs on the Peer Review Program: http://www.aicpa.org/InterestAreas/PeerReview/ Resources/FAQs/DownloadableDocuments/qandaprp.pdf Questions and Answers About the AICPA Peer Review Program. Update No. 9 (October 2010). AICPA: NY. http://www.aicpa.org/InterestAreas/PeerReview/Resources/FAQs/ DownloadableDocuments/qandaprp.pdf Gramling, A., & Watson, M. (2009). Analysis of peer review reports: A focus on deficiencies of the top 20 triennially inspected firms. Current Issues in Auditing, 3(2), A1–A14. Graham, G. (2009). Introducing the new principles-based peer review standards. Journal of Accountancy (May), 39–43. (continued on next page)

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Ethics Programs SEC

GAO

State Boards

Links to the Code of Professional Conduct, the PEEC (‘standard setting’) and Enforcement: http://www.aicpa.org/InterestAreas/ProfessionalEthics/Pages/ProfessionalEthics.aspx Overview of the SEC, its history, its operation, and the five divisions: http://www.sec.gov/ about/whatwedo.shtml Floyd Advisory Group’s quarterly summary of AAERs: http://www.floydadvisory.com/ summary.html Hansen, J. (2010). Where were the auditors? Using AAERs in introductory or advanced auditing courses. Journal of Accounting Education, 28, 114–127. Skousen, K, Glover, S., & Prawitt, D. (2005). An Introduction to Corporate Governance and the SEC . South-Western. Mason Ohio. Overview of the GAO and its activities: http://gao.gov/about/ The AICPA’s Center for Governmental Audit Quality: http://www.aicpa.org/InterestAreas/ GovernmentalAuditQuality/Pages/GAQC.aspx Dalkin, J. R. Proposed Changes to GAO’s Yellow Book. Journal of Accountancy. v 210(6) December, 36-41. Steffee, S. 2010. GAO Proposes Revised Standards. Internal Auditor; v 67(5) October, 16. Overall description of NASBA, and its activities: http://www.nasba.org/about/, http://www. nasba.org/files/2010/01/NASBA_Annual_Report_2011.pdf List of ‘Boards of Accountancy’ (with links), also tabs for ‘Exams/Licensure/Education: http:// www.nasba.org/stateboards/ The Uniform Accountancy Act is the model for most states’ public accounting statutes: http:// www.nasba.org/files/2011/04/UAA_Fifth_Edition-Jul07.pdf ‘Model Rules’ for the UAA: http://www.nasba.org/files/2007/11/UAA_Model_Rules_0707.pdf

Appendix D. Regulation Acronyms

AAER AS ASB CPE GAAS GAGAS GAO JEEP PCAOB PEEC PRP QC SAS SEC

Accounting and Auditing Enforcement Releases (of the SEC) Auditing Standard (of the PCAOB) Auditing Standards Board (of the AICPA) Continuing Professional Education Generally Accepted Auditing Standards Generally Accepted Government Auditing Standards (Yellow Book) (U.S.) Government Accountability Office Joint Ethics and Enforcement Program (of the AICPA) Public Company Accounting Oversight Board Professional Ethics Executive Committee (of the AICPA) (AICPA) Peer Review Program Quality Control Statements on Auditing Standards (of the ASB) Securities and Exchange Commission

Note: This is a list of acronyms commonly used in the audit profession related to audit regulation.

References American Accounting Association (2003). (AAA) Auditing Section Education Committee, Challenges to audit education for the 21st century: A survey of curricula, course content, and delivery methods. Issues in Accounting Education, 18, 241–263. Arthur Andersen & Co., Arthur Young, Coopers & Lybrand, Deloitte Haskins & Sells, Ernst & Whinney, Peat Marwick Main & Co., Price Waterhouse, & Touche Ross, Perspectives on education: Capabilities for success in the accounting profession, Position paper. (1989). [Accessed 10.10.12].

Arens, A. A., & Elder, R. J. (2006). Perspectives on auditing education after Sarbanes–Oxley. Issues in Accounting Education, 21, 345–362. Arens, A. A., Elder, R. J., & Beasley, M. S. (2006). Auditing and assurance services: An integrated approach (14th ed.). New Jersey: Pearson Education, Inc. Association to Advance Collegiate Schools of Business International (AACSB). Accounting Accreditation Standards, Standard A6. (2013). [Accessed 15.07.13]. Ballou, B. J., Cashell, J. D., & Heitger, D. L. (2008). Alternatives for addressing major challenges in teaching introductory audit courses. Journal of Accounting Education, 26, 231–244.

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