ABC Electronics: An Instructional Case Illustrating Auditors' Use of Preliminary Analytical Procedures

Abstract

SUMMARYThis instructional case demonstrates auditors' use of analytical procedures during the planning/risk assessment phase of a financial statement audit. An Excel spreadsheet enables instructors to embed up to seven operating problems or potential accounting issues into a fictitious consumer electronics manufacturer's current year financial statements. Questionnaires from students at two universities indicate that the case is effective at helping undergraduate auditing students understand (1) auditors' use of analytical procedures during the planning stage of the audit, and (2) the types of accounting issues and operating problems that might be identified using analytical procedures.