ISBN#    978–0–912503–68-4

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Integrated Audit Practice Case

7th Edition (2017)
Kerr, Elder and Arens

An integrated audit practice case to help students learn to solve audit problems by applying knowledge from different sources. Completing Integrated Audit Practice Case is ideal preparation for students to learn these skills. Students are required to use a wide variety of information to make audit decisions and integrate that information throughout an audit.


  • Help students understand the interrelationships among the many audit decisions involved in audit planning, audit testing, and the formation of the auditor′s opinion.
  • Help students learn how auditors make decisions and perform audits when they are confronted with information about an entire company where some data may be irrelevant or contradictory.
  • Familiarize students with audit workpapers and good workpaper techniques by having them prepare actual working papers.

  1. Review client background information.
  2. Review engagement letter.
  3. Perform preliminary analytical procedures.
  4. Evaluate client’s financial condition.
  5. Assess fraud risk.
  6. Assess acceptable audit risk and inherent risk.
  7. Determine planning materiality and performance materiality.
  8. Assess control risk and plan tests of controls and substantive tests of transactions.
  9. Perform tests of controls and substantive tests of transactions.
    • Uses statistical attribute sampling.
  10. Perform audit of accounts receivable.
    • Option A: Nonstatistical sampling.
    • Option B: Monetary-unit sampling.
    • Option C: Difference estimation.
  11. Perform audit of accounts payable.
  12. Perform audit of cash.
  13. Perform audit of inventory.
  14. Completing the audit and issue auditor’s report.

Four sets of materials are provided:

1. Assignments Booklet: Contains the instructions for each of the 10 audit assignments for the Integrated Audit Practice Case.

2. Documents File: Contains copies of the invoices, checks, receiving reports and other documents used to perform many of the audit tests.

3. Current Workpapers: Includes more than 150 working papers, some completed and others for students to complete while doing assignments. Planning, tests of controls, and substantive tests of transactions workpapers include financial statements, detailed accounts by division for analytical procedures, engagement letter, planning documentation, risk assessment information, and information about internal controls including flowcharts and questionnaires. Tests of balances and completing the audit workpapers contain papers for cash, accounts receivable, inventories, accounts payable, summary of possible misstatements, subsequent events, representation letter and management letter.

4. Workpapers in Microsoft Excel: Includes workpapers that can be conveniently prepared either in Microsoft Excel or in the workpaper file.

Designed for Use With Any Auditing Textbook

The case project is relevant for use in any auditing course, regardless of the text, if the faculty member wants students to understand such topics as audit risk, inherent risk, audit planning, understanding and testing internal controls, analytical procedures, and substantive tests of account balances.


A Supplement to the First Auditing Course

Integrated Audit Practice Case can be used in one of two ways:

  • To emphasize the concepts you teach as you proceed throughout the course. Students will do assignments shortly after they are discussed in class.
  • To emphasize the concepts you teach after you have covered the basic auditing concepts. Assignments will be made near the end of the basic auditing course.

Using Integrated Audit Practice Case, students:

  • analyze information,
  • make decisions,
  • perform audit tests,
  • prepare workpapers,
  • reach conclusions in several segments of an audit.

Emphasis on Decision Making

Doing the case requires students to integrate information and decisions from earlier assignments into later ones. Education research shows that students learn best by making the decisions and doing the audit work.

A file of workpapers is provided to illustrate effective working paper preparation for sales and cash receipts. Students prepare workpapers for the acquisition of goods and services, cash disbursements, accounts payable, and other related accounts. Many of the workpapers are partially completed.

Students start by making accept/reject decisions for an audit client, and then proceed through the audit process making key decisions in planning the audit, performing tests, and evaluating results. Background information and detailed instructions are provided to challenge and guide the students.


Realism and Relevance


Materials in Integrated Audit Practice Case have been reviewed and class tested by professors and practitioners with extensive practice experience. Carol Borsum, CPA, is a practicing auditor with years of auditing experience who worked on the audit staff of a large CPA firm. She has spent more than five-hundred hours completing the entire case, making recommendations for revisions, and making certain that the materials and related workpapers are relevant and realistic. Two other practitioners reviewed the materials in detail.