Jack's Sports Bar

This two‐part case focuses on indicators or red flags of a possible fraud being committed by a majority shareholder against a minority shareholder. The student assumes the role of an accountant investigating the possible fraud. In Part 1 the student is provided with a whistleblower complaint and examines the draft financial statements that will be used for the purchase price of the sale of shares by the minority shareholder to the majority shareholder. In Part 2 the student is provided with further information on inventory controls and the accounting practices. Drawing on the student's knowledge of control systems and financial statement analysis, the student's task is to identify the possible fraudulent transactions and quantify their effect.     

Holliston Helping Hands

This case focuses on fraud investigation in a not‐for‐profit organization, along with an examination of governance and management control practices. The student assumes the role of an accountant investigating a possible fraud. The student is first presented with sample invoices paid by the organization that are fraught with irregularities and red flags of potential fraud. Drawing on the student's knowledge of control systems and corporate governance, the student's task is to identify suspicions of possible fraudulent transactions, identify key suspects, and develop an investigative plan. The class can also discuss recommendations to improve governance and control mechanisms to avoid future occurrences of fraud. The case is presented in three parts, and closely parallels a fraud investigation as additional information is revealed in each successive part of the case. This is much like peeling the layers of an onion which is a common way to describe the evolution of a fraud investigation. This case is based on a real fraud investigation conducted by one of the authors who was engaged by the province's Ministry of Health. Students who express disbelief about issues portrayed in the case can be reassured that these faithfully represent actual events.     

Identifying Fraud in Online Auctions: A Case Study

According to the FBI (IC3, 2011), losses as a result of auto‐auction fraud exceeded $8.2 million dollars in 2011. How can one detect deception in online auction transactions? The authors use a comprehensive case to teach students about deception detection processes, detection cues, and the e‐commerce environment. Students are challenged to make a professional judgment about whether the transaction under consideration is an attempt to deceive. The case is based on a real‐life situation and provides a valuable exercise for business students, educating them in the reality of online auction markets and developing their critical thinking skills. The case may be used with undergraduate accounting majors in Accounting Information Systems classes and with graduate students in an e‐commerce course either as an in‐class assignment or as a term project. Students provided favorable responses as to the value of the case.     

Bayesian Fraud Risk Formula for Financial Statement Audits

In this article we extend the work of Loebbecke et al. (1989 ) and illustrate the use of an evidential reasoning approach for developing fraud risk analysis models under the Bayesian framework. New formulations facilitating fraud risk assessments are needed because decision tree approaches previously used to develop analytical models are not appropriate in complex situations involving several interrelated variables. To demonstrate the evidential reasoning approach, a fraud risk assessment formula is derived and illustrated. The fraud risk formula captures the impact of the presence or absence of and interrelationships between the three ‘fraud triangle’ risk factors: Incentives, Attitude and Opportunities. The formula includes the impact of risks and controls related to these three fraud risk factors as well as the impact of forensic audit procedures and relevant analytical and other procedures that provide evidence for the presence or absence of fraud. This formula may be used in audit practice both to help plan the audit and to assess fraud risk sequentially as audit evidence is obtained.     

Castries Merchandising Inc.

This two‐part case focuses on red flags of attempted earnings management for a St. Lucian company that is moving from 100 percent family‐owned to selling 50 percent of the family's shares to an equity fund. In order to increase the earnings growth rate in the three years leading up to the proposed sale to an equity fund in 2021, the earnings for the most recent three years (2016–2018) have been artificially depressed. The resulting byproduct of the earnings management is the underprovision of income taxes for the past three years, which is detected by the tax authorities in St. Lucia. The student assumes the role of a tax auditor for the tax authority in St. Lucia assigned to audit Castries Merchandising Inc. (CMI), a merchandiser of building products, hardware, and automobile parts. In Part 1 the student is provided excerpts of the financial statements of CMI with some anomalies that have been detected by a software program. In Part 2 the student is provided with further information of excerpts from the trial balance and an interview with the CFO, who is a member of the family ownership group of CMI and also a Canadian CPA registered in Ontario. Drawing on the student's knowledge of auditing, accounting principles, and financial statement analysis, the student's task is to both reassess the income taxes for the years 2016 to 2018 and contemplate how management may be manipulating the financial statements in order to benefit from the planned future sale of CMI's shares to an equity fund.     

民事欺诈与刑事诈骗的类型化区分

刑事诈骗是民事欺诈中的严重部分,两者最主要的区别在于行为人主观上是否具有非法占有目的。刑事诈骗的行为类型多样,具体构造也存在一定差异,非法占有目的的认定应结合诈骗行为的具体构造展开。交易型诈骗中,作为交易对价的基础事实是否存在对于非法占有目的认定具有决定意义。使用型诈骗的场合,应重视对行为人取得财物后的用途和资金走向的考察,以确定非法占有目的是否成立。财物用途和资金走向无法查清的案件,不能简单地认为属于事实不清、证据不足。资格型诈骗中,非法占有目的的认定应同时考虑行为人是否具有特定资格以及财物的具体用途。民事欺诈与刑事诈骗的区分还要注意欺诈事实是否属于核心或者主要事实以及欺诈程度等。     

A Conceptual Framework for Learning Management Accounting

This paper demonstrates how Schoenfeld's ( 1985 ) conceptual framework for mathematics can provide an alternate framework for learning and thereby teaching management accounting. The four‐part framework—heuristics, resources, beliefs, and controls—is a refinement to problem‐based learning with three attributes in regard to management accounting. First, all aspects for teaching management accounting are integrated into a single framework or theory. Consistency among all parts of management accounting clarifies student and instructor roles in the learning process. Second, the framework's problem‐solving focus with linkages to explanatory materials or resources allows students to be rigorously informed about the functionality of management accounting heuristics. Third, transition or extension of relatively simple, standard problems to more complex nonstandard problems or cases is facilitated by introducing appropriate beliefs and controls. In effect, this approach enables management accounting, and particularly case analysis, to be taught with more structure.     

From Plagiarism‐Plagued to Plagiarism‐Proof: Using Anonymized Case Assignments in Intermediate Accounting

Plagiarism in accounting case assignments is a serious problem that undercuts the important objectives the case assignments are used to achieve: the development of students’ critical thinking skills and the advancement of their written communication skills. This paper examines plagiarism behavior through the lens of fraud theory by targeting two elements of the fraud triangle: rationalization and opportunity. Efforts to target rationalization by changing student perceptions of peer behavior were not effective. This led to a shift in focus to the assignment itself which was providing the opportunity for misconduct. Students were sidestepping authentic engagement in the assignment by gaining access to published solutions or peer submissions from previous semesters. One failsafe design response to this problem is to use only originally written cases. However, writing a large number of original cases each semester is unrealistic within many instructors’ workloads. This article instead proposes the use of a case refreshing strategy that makes cases appear unique to each group of students. When this strategy was introduced in an intermediate accounting course, there was a dramatic decrease in plagiarism and a corresponding improvement of the academic integrity environment in the course.     

Internal audit,alternative internal audit structures and the level of misappropriation of assets fraud

In recent years, the importance of good corporate governance has received significant public and regulatory attention. A crucial part of an entity's corporate governance is its internal audit function. At the same time, there has been significant public concern about the level of fraud within organizations. The purpose of this study is to assess whether organizations with an internal audit function are more likely to detect and self‐report fraud than those without. In this study, we use a unique self‐reported measure of misappropriation of assets fraud for the first time. The fraud data are from the 2004 KPMG Fraud Survey, which reported fraud from 491 organizations in the private and public sector across Australia and New Zealand. The internal audit data are from a separate mail survey sent to the respondents of the KPMG Fraud Survey. We find that organizations with an internal audit function are more likely than those without such a function to detect and self‐report fraud. Furthermore, organizations that rely solely on outsourcing for their internal audit function are less likely to detect and self‐report fraud than those that undertake at least part of their internal audit function themselves. These findings suggest that internal audit adds value through improving the control and monitoring environment within organizations to detect and self‐report fraud. These results also suggest that keeping the internal audit function within the organization is more effective than completely outsourcing that function.     

Accounting Students’ Planning,Writing, and Performance on a Time‐Constrained Case Analysis: Effects of Self‐Talk and Prior Achievement

When writing a case analysis, most students first allocate time to plan the content and structure of their response, and then proceed to write with differing degrees of urgency, the outcomes of which are case responses of differing quality. This study examines the extent to which planning time influences writing urgency and, ultimately, the quality of case responses in a time‐constrained setting. It also investigates whether these behaviors and outcomes depend on students’ frame of mind, by experimentally inducing differing types of pre‐examination self‐talk. Analyses show that planning time was negatively associated with writing urgency; students who spent more time planning subsequently wrote with less urgency. Writing urgency was positively associated with case response quality and, after controlling for differences in writing urgency, planning time was positively associated with response quality. Results indicate that different planning and writing behaviors can be induced by different forms of self‐talk prior to the writing task. Relative to interrogative self‐talk (“Will I …?”), exclamatory self‐talk (“I will …!”) caused higher‐achieving students to spend more time planning, but then write with less urgency and subsequently produce lower‐quality case responses. Conversely, after engaging in exclamatory rather than interrogative self‐talk, lower‐achieving students spent less time planning but then wrote with greater urgency and produced higher‐quality responses. These results indicate that (i) planning significantly affects writing and performance, (ii) students can influence their own planning behavior through pre‐task self‐talk, but (iii) pre‐task self‐talk can be beneficial or detrimental depending on students’ prior achievement.     

Paper and Hill: An In‐Class Corporate Governance Case

Corporate governance is a set of rules and processes that help ensure that firms are effectively run for the benefit of their stakeholders. Good corporate governance is predicated on having directors fulfill their fiduciary duties while acting as stewards of the corporation. The fact that good corporate governance is essential to a well‐functioning and prosperous society is reflected in CPA Canada's Strategy and Governance competency. Unfortunately, there are few in‐class Canadian corporate governance cases that instructors can use to help accounting students improve their understanding of these three fundamental governance concepts: director duty of care, director duty of loyalty, and the business judgment rule. This Canadian corporate governance case is based on the actual events regarding the approval of Steven Hill's employment contract as the Chair of Paper Enterprises Inc. The case is presented using PowerPoint slides, rather than in a traditional narrative format, as it intended to be used as an in‐class case that does not require advance student preparation.     

A Balanced Scorecard for Maple Leaf Consulting

Maple Leaf Consulting is the disguised name for an actual medium‐sized international engineering and environmental consulting firm. In its 35 years of operations, the firm has grown from a single 10‐person office in Canada to more than 3,000 employees worldwide. Despite the growth from providing only specialized geotechnical engineering to many related technical specializations, the firm retained its nonbureaucratic orientation. Now, while emphasizing innovative world‐class technical knowledge, the fictional firm must resolve a series of organizational transition issues, which the actual firm did through the use of the balanced scorecard. The purpose of this case is for students to develop a preliminary balanced scorecard with appropriate measures.     

Entebbe Ltd.: A Tax Case

This case is designed to integrate two major tax issues—wind‐up of a company versus sale of shares—with business valuations. Thus, it is designed to incorporate key tax and finance CPA competency areas. There are two valuations required in this case. One is the valuation of shares; the other is the valuation of an intangible asset (a patent). Students have to recognize that before they can decide whether a wind‐up or sale of shares is preferred, they first need to determine the fair market value (FMV) of the shares. However, to determine the FMV of the shares, the valuation of a patent must be done first, as its value will impact the FMV of the shares. Thus, this case requires students to sequence their analysis. Residency issues (“departure tax”) upon leaving Canada permanently are also indirectly identified in the case.     

Condominium Townhouse Investment

This accounting case involves the evaluation of various alternatives based on a real‐life personal property investment. The Condominium Townhouse Investment (CTI) case uses introductory management accounting concepts and analyses to introduce students to the case method of learning. The main concepts reinforced are relevant costs and revenues, including differentiating between opportunity and sunk costs. Students are not only asked to define and identify these items, but to consider choices centered on the decision alternatives in their role as accountants in public practice. This case is especially valuable because it offers students the chance to become engaged in an analysis and decision‐making situation that they can relate to both personally and professionally because, one day, they themselves are likely to become involved in a home ownership decision. The case focuses on real estate as a personal business investment, and requires both qualitative and quantitative analysis, with more emphasis on the qualitative aspect. In addition, the teaching notes include methods and strategies for students to use in an introductory managerial accounting class or level‐1 MBA class.     

IFRS within the Multi‐GAAP Canadian Reality: A Teaching and Learning Imperative for Intermediate Financial Accounting

Intermediate accounting instructors need to be engaged in the specific complexities and challenges of the new international financial reporting standards (IFRS) reality within the Canadian multi‐GAAP environment. Intermediate accounting courses are directly affected because they represent substantive coverage of the corporate reporting environment. In this article I make the case that these courses should primarily reflect IFRS standards in order to entrench IFRS competencies in students who wish to pursue a professional designation, to prepare students for the global environment, and to concentrate IFRS expertise issues in a robust instructor group. The competency maps of each of the three Canadian professional accounting bodies clearly reflect IFRS. Students can analyze the implications of major areas of policy differences between IFRS and private enterprise GAAP (PEGAAP) through specific targeted course coverage, but also through active learning elements, particularly research elements. This commentary reflects some of the active debate occurring regarding postsecondary curriculum as Canada adapts to IFRS and PEGAAP, and encourages action.     

Mountain City Transit: Management Control and Performance Measurement

Mountain City Transit (MCT) is a short in‐class case based on a real‐life city transit department, a context with which students are very familiar. The case allows three delivery options for instructors. A first option is for instructors to use the case to introduce various elements of management control—the case is rich, thereby allowing students to identify multiple issues facing the organization. As a second option, instructors can use it as a performance management case wherein students build a balanced scorecard and receive a completed strategy map to analyze. As a third delivery option, the case can be used twice during the course, both to introduce management control and to discuss performance measurement. Students will also discuss real life implementation challenges that MCT and other organizations face.     

Corporate fraud culture: Re‐examining the corporate governance and performance relation

We analyse the corporate governance and performance relation, when conditioning on corporate fraud, for fraud firms during 2000 – 2007. Fraud firms are identified as either self‐ reported fraud events, or subject to regulatory investigation. We use the inverse Mills ratio procedure to account for firms' (unobservable) fraud culture in the dynamic system GMM model of the performance‐ governance relation. We find that corporate governance is an endogenously determined characteristic that has no causal impact on firm performance when conditioning on fraud. Fraud is a significant regulatory event but its overall economic impact at the firm level is highly variable.     

Fraud at a public authority

This case describes a fraud committed at a public authority which operated a municipal facility that was used for sporting events and concerts. The fraud was committed by the authority’s chief accounting officer who stole tens of thousands of dollars in cash over a period of several years. The case describes how the cash was stolen and concealed by the authority’s chief accountant. Case questions ask students to identify internal control weaknesses that allowed the fraud to be committed, recommend improvements to internal controls, and identify how the auditor should have searched for the fraud. Assessment evidence indicates that the case is effective in meeting identified learning objectives. The case has been used in the first auditing course, and it would also be suitable for use in a forensic accounting course.     

Fraud: from national strategies to practice on the ground—a regional case study

The intentions of a number of national strategies and other initiatives to address fraud are reviewed in the context of one UK region. This paper considers how far various agencies in that region have responded to fraud. It then discusses which factors appear to have influenced the role of the strategies and other initiatives as an anti-fraud framework or to deliver anti-fraud work.