Sparked Intuition Power: An Audit Risk Activity

Michael Barnes (), Kathryn Enget and Mitchell Heberer
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Michael Barnes: Department of Accounting, School of Business, Truman State University, Kirksville, MO 63501, USA
Kathryn Enget: Division of Accounting and Finance, Beacom School of Business, University of South Dakota, Vermillion, SD 57069, USA
Mitchell Heberer: Audit & Assurance, Deloitte US, St. Louis, MO 63102, USA

JRFM, 2024, vol. 17, issue 6, 1-15

Abstract: This case explores the subjective nature of professional judgment related to audit risk through the lens of a fictitious company, Sparked Intuition Power (SIP). SIP has just been accepted as a new audit client by an international accounting firm. Students play the role of associates on the audit engagement team. As part of their work on the audit, the students identify potential risks present at SIP as part of the initial risk assessment process. Once these risks have been identified, the students decide how to assess the potential severity of each risk and determine the resulting effect on the overall auditor workload. Through interaction and discussion with their instructors, the students should be better able to navigate the decision-making process related to risk evaluation in an audit engagement.

Keywords: audit risk assessment; audit risk model; judgment and decision-making in auditing; professional judgment (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2024
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