Effectiveness of Auditing Curricula Revisted

INTRODUCTIONAn important entry-level position for a large number of accounting students is that of auditor. Thus, it is important that these students are well prepared to undertake the duties and assignments of an auditor and to understand the importance of auditing to the overall accounting function. Not surprisingly, more than 90 percent of accounting programs require an introductory financial auditing course at the undergraduate level (AAA Auditing Section Education Committee, 2003). Triggered by highly publicized financial scandals that alarmed the public, Congress passed the Sarbanes Oxley Act (SOX) in 2002 that called for stricter corporate accountability, the establishment of additional oversight of CPA firms auditing publicly-held companies, and is considered by many to be the most significant legislation affecting accounting since the 1933 and 1934 Securities Acts.Interviewing corporate directors Cohen et al (2013) found that the legislation influenced both audit committees and internal auditors. For the former, the perception is that the Act led to a more structured formal approach to accounting policy decision making by audit committees and external auditors. With respect to the latter, they found that SOX led to a substantial improvement in the scope, responsibility, and status of internal auditors. Other influences are found at the SEC and the security exchanges. The SEC now requires executive compensation plans to be fully disclosed and new rules of professional conduct for corporate lawyers and accountants have been enacted (Reed et al, 2007). At the exchanges a greater independence requirement for boards of directors has been adopted in new exchange listing requirements by both the NYSE and NASDAQ. Arens and Elder (2006) report that auditing today is performed significantly differently than before the legislation, and that these changes in the accounting profession have a significant effect on the knowledge and skills students need to be auditors. As a result, they emphasize the SOX legislation will also result in needed changes in auditing curriculum.Reed et al (2007) studied the impact SOX and related regulatory changes will have on undergraduate business and four-year accounting programs. They noted many undergraduate business programs will most likely have to incorporate SOX material into existing courses given the inability to increase required credit hour requirements. BizEd conducted a survey of accounting department chairs and faculty that focused on how SOX was incorporated into their curricula (Bisoix, 2005). Twenty eight of thirty six schools surveyed responded either they slightly changed a course or redesigned courses. Only one school changed its curriculum by adding a new course or program just on SOX.Revising curriculum is part of the continuous improvement process adopted by many schools. Accordingly, auditing professors have to determine which current material is more worthy of being retained in a course and which material should be removed to include the more current and necessary SOX material. The purpose of this study is to help faculty make these decisions in an undergraduate auditing course as they reevaluate curriculum in light of SOX expectations and requirements.Past research confirms the content of the first auditing course is strongly connected to textbook content. Previous research by Engle & Elam (1985) established a direct relationship between undergraduate auditing classroom emphasis and auditing textbook emphasis. In addition, a study commissioned by the American Accounting Association's (AAA) Auditing Section to assess the status of auditing courses in the undergraduate accounting curriculum found the content of the first auditing course to be textbook dependent (Frakes, 1987). Bryan and Smith (1997) surveyed auditing educators to determine their perceptions concerning the importance of 31 auditing topics based on the content of several leading auditing textbooks. …