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Waste Is Our Business, Inc.: The importance of non-financial information in the audit planning process

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  • Cohen, Jeffrey
  • Krishnamoorthy, Ganesh
  • Wright, Arnie

Abstract

The objectives of this case are: (a) to alert students to the importance of non-financial information in the audit process; (b) to develop students’ ability to search for relevant financial and non-financial information in the audit planning process; and (c) to emphasize the importance of resisting the natural tendency to over-rely on financial information when conducting the financial statement audit. Students are asked to consider both financial and non-financial information when evaluating a client’s account balances. The client is in the waste business where there are a number of market, regulatory, and political factors that may affect the valuation of different accounts. Students are also directed to consider the importance of non-financial information in the integrated audit mandated by PCAOB Standard 5 and in fraud detection. The case can help students learn to explicitly consider non-financial information and understand the significance of integrating such information with financial data. The case is suitable for use in undergraduate or graduate auditing and assurance courses.

Suggested Citation

  • Cohen, Jeffrey & Krishnamoorthy, Ganesh & Wright, Arnie, 2008. "Waste Is Our Business, Inc.: The importance of non-financial information in the audit planning process," Journal of Accounting Education, Elsevier, vol. 26(3), pages 166-178.
    • Handle: RePEc:eee:joaced:v:26:y:2008:i:3:p:166-178
    DOI: 10.1016/j.jaccedu.2008.08.004
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    References listed on IDEAS

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    1. Erickson, M & Mayhew, BW & Felix, WL, 2000. "Why do audits fail? Evidence from Lincoln Savings and Loan," Journal of Accounting Research, Wiley Blackwell, vol. 38(1), pages 165-194.
    2. Libby, R, 1985. "Availability And The Generation Of Hypotheses In Analytical Review," Journal of Accounting Research, Wiley Blackwell, vol. 23(2), pages 648-667.
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    Cited by:

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    3. Roxana Manuela Dicu & Ioan-Bogdan Robu & George-Marian Aevoae & Daniela-Neonila Mardiros, 2020. "Rethinking the Role of M&As in Promoting Sustainable Development: Empirical Evidence Regarding the Relation Between the Audit Opinion and the Sustainable Performance of the Romanian Target Companies," Sustainability, MDPI, vol. 12(20), pages 1-17, October.

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