Shoe Zoo, Inc.: A Practice in Electronic Work Papers, Tick Mark Preparation, and Client Communication through the Audit of Property, Plant, and Equipment

Abstract

ABSTRACT In this case, students are required to audit a company's gross property, plant, and equipment and depreciation expense accounts. Students are provided with electronic working papers that include the audit program, as well as documents prepared by the client and select prior year working papers. In order to successfully complete the audit, students will have to obtain explanations and other assistance from the client. The case furthers audit education by illuminating to students how concepts learned in the classroom translate into practice. The case has several specific learning objectives. First, the case familiarizes students with electronic working papers which allows them to practice their Excel skills. Second, the case provides students with an opportunity to audit property, plant, and equipment additions using substantive details testing and to test depreciation expense using substantive analytical procedures. Third, students must consider internal controls and the implications errors have on internal control effectiveness. Fourth, the case helps students improve documentation skills by writing tick mark explanations. Finally, the case provides students practice with professional verbal communications through client interviews. The case is appropriate for an undergraduate audit or a beginning graduate-level audit and assurance class.