A Practical Method in Getting a Taste of the Accounting Profession in Intermediate Accounting

• In Event: ED Talks-short (e.g., 10-minute TED-like talks) talks about Teaching and Learning:

Abstract

DESCRIPTION OF THE SESSION

Example Regarding Property, Plant & Equipment – Fixed Assets

A general introduction is given about the components of PPE, their location on the balance sheet, components of major classes of ppe, initial measurement, how its cost is allocated to the income statement, methods used to allocate cost, impairment, subsequent adjustments, and footnote disclosure requirements. Identification of the relative Accounting Standard Codification principles is also identified at this time, along with recent leasing standards and how they effect PPE are briefly mentioned with effective dates, and if any recent exposure draft are available.

Case Study Example is Introduced

The client replaced a substantial number of trucks during the year by trading in old trucks and paying an additional amount of cash. What problems does this present to the auditor? Research material is provided covering the topic such as ASC from FASB through AAA. I place various resources in blackboard to be used in the case such as a fixed asset audit program to identify the procedures used to gather evidence for reaching a conclusion about management’s assertions, and what those assertions are, at the financial statement level for PPE. A financial statement disclosure checklist is used to see if all the necessary reporting and disclosure requirements have been satisfied for PPE for a set of financial statements.

Students will identify what must be done during the acceptance phase of a client, what agreement must be made with management, what communication must be made with a predecessor accountant, purpose and basic requirements of workpapers, workpaper organization and arrangements, legal liability considerations for audit documentation, concluding the audit, and required communication with those charged with governance. Remember this is not focused on auditing but provides a basic understanding of what and audit is, what preconditions must exist to accept an audit, etc.

Author

• Donald A May, University of Hartford