Academic journal article Academy of Educational Leadership Journal

An Importance-Effectiveness Analysis of the Contemporary Auditing Course

Academic journal article Academy of Educational Leadership Journal

An Importance-Effectiveness Analysis of the Contemporary Auditing Course

Article excerpt

INTRODUCTION

Recent highly publicized business failures have cast doubt on the effectiveness of auditors and have led to a weakening of public trust in the auditing profession. Scandals such as Enron, Worldcom, HealthSouth and other public companies have alarmed the public and attracted the attention of Congress. The Sarbanes-Oxley Act (SOX), legislation enacted in 2002, increases SEC powers to police the profession and provides for greater oversight of reporting practices. It also requires public companies to attest to the effectiveness of their internal controls over financial reporting. SOX also introduced sweeping changes to the institutional structure of the accounting profession, including the establishment of the Public Company Accounting Oversight Board. All these changes potentially impact university auditing courses.

The university accounting curriculum provides students with an understanding of the accounting function and the activities of the accountant in order to prepare them to compete in the contemporary workplace. As part of the accounting curriculum, auditing is viewed as a significant course for all accounting majors, with more than 90 percent of accounting programs requiring an introductory financial auditing course at the undergraduate level (AAA Auditing Section Education Committee, 2003). On numerous occasions surveys of practicing CPAs have reported dissatisfaction with the university auditing course [AICPA, 1978; Martin & Whisant, 1982; and Kanter & Pitman, 1987]. Prompted by these and other studies [American Accounting Association, 1986; Kullberg et al, 1989; and Albrect & Sack, 2000], accounting practitioners, as well as educators, have taken a number of steps towards addressing meaningful curricula changes. The American Accounting Association (AAA) responded by creating the Accounting Education Change Commission to lead the effort to make meaningful changes in accounting education with the objective to improve accounting curricula so that entrants to the profession possess the skills, knowledge, and aptitude required for success in accounting. These undertakings concluded that, due to the dynamic nature of the profession, auditing educators should strive to constantly examine the content of the auditing course and take the necessary steps to maintain its relevance and effectiveness.

Partly in response to recent accounting scandals, the National Association of State Boards of Accountancy (NASBA) (2005) recently developed a proposal that attempted to change the curriculum requirements for all CPA candidates. Reckers (2006) offers a critical analysis and historical perspective of both the proposal and public reaction to the proposal. He contends that the formative education of accountants is now recognized as important; and public reaction indicates that all stakeholders, including politicians, legislators, and regulators have come to recognize the crucial role auditors and accountants play in protecting society. Unfortunately it has required financial disasters to achieve this recognition.

Previous research by Engle & Elam [1985] established a direct relationship between undergraduate auditing classroom emphasis and auditing textbook emphasis. In addition, a study commissioned by the American Accounting Association's (AAA) Auditing Section to assess the status of auditing courses in the undergraduate accounting curriculum [Frakes (1987)] found the content of the first auditing course to be textbook dependent. Bryan and Smith [1997] surveyed auditing educators to determine their perceptions concerning the importance of 31 auditing topics based on the content of several leading auditing textbooks. More recently, the AAA's 2000-2001 Auditing Section Education Committee (2003) conducted a survey in which course syllabi from 285 auditing and assurance courses were analyzed on a number of dimensions, including identifying auditing topics, and compared to prior surveys of auditing courses (Frakes 1987; Groomer and Heintz, 1994). …

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