The Valentine Company Case: A Review of Internal Controls Simulation Involving Practitioners

• In Event: Teaching Learning and Curriculum

Abstract

The fictitious Valentine Company Case is designed to give students a simulated experience in conducting an audit of internal controls over financial statement reporting as required in PCAOB Auditing Standard No. 5. In order to distance the case from a GAAS audit and focus student attention on internal controls, the purpose of the engagement in this case is to conduct a review of internal controls required by a bank in order to approve a construction loan to Valentine Company, a privately-held corporation. Information provided about Valentine Company focuses on internal controls related to the revenue cycle. After reading the case narrative, teams of student “auditors” interview six practitioners portraying specific Valentine Company employees. All of the information the students need to create the required deliverables is obtained through the case narrative and the interviews they conduct. In addition to providing students with an opportunity to apply what they have learned about the revenue cycle, internal control frameworks, documentation and assessing process risks, this case also provides accounting educators with an opportunity to involve accounting professionals in the educational process as recommended by Albrecht and Sack (2000) and the 2012 Pathways Commission report.

Authors

• Carol J Normand, University of Wisconsin–Whitewater

• Alka Arora, University of Wisconsin–Whitewater