Waste is Our Business, Inc.: The Importance of Non-Financial Information in the Audit Planning Process

19 Pages Posted: 31 Jan 2008 Last revised: 5 Dec 2012

See all articles by Jeffrey R. Cohen

Jeffrey R. Cohen

Boston College - Department of Accounting

Ganesh Krishnamoorthy

Northeastern University

Arnold Wright

Northeastern University - Accounting Group

Date Written: April 1, 2009

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 maintaining professional skepticism and to resist 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 the 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 2 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.

Keywords: Audit Planning, Non-Financial Information, Professional Skepticism, Analytical Review

JEL Classification: M49, M41, G34

Suggested Citation

Cohen, Jeffrey R. and Krishnamoorthy, Ganesh and Wright, Arnold, Waste is Our Business, Inc.: The Importance of Non-Financial Information in the Audit Planning Process (April 1, 2009). Available at SSRN: https://ssrn.com/abstract=1088444 or http://dx.doi.org/10.2139/ssrn.1088444

Jeffrey R. Cohen (Contact Author)

Boston College - Department of Accounting ( email )

Carroll School of Management
140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States
617-552-3165 (Phone)
617-552-2097 (Fax)

Ganesh Krishnamoorthy

Northeastern University ( email )

360 Huntington Ave.
Boston, MA 02115
617-373-4651 (Phone)
617-373-8814 (Fax)

Arnold Wright

Northeastern University - Accounting Group ( email )

406 Hayden Hall
United States

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