Understanding, Evaluating, and Monitoring Internal Control Systems: A Case and Spreadsheet Based Pedagogical Approach

Abstract

This paper describes a case approach for teaching internal control evaluation (ICE) using an Excel spreadsheet patterned after software from Grant Thornton LLP (Grant) named INFOCUS. Although INFOCUS is not used or supported anymore by Grant, it was used for many years in training and development for ICE theory and application at the firm. Grant allows use of their software and approach for classroom use. From a conceptual pedagogy perspective, this approach is still applicable to current practice standards and guidelines for ICE and provides a systematic application to help students take the role of an auditor to document the accounting system, document the controls, select key controls, and make the preliminary control risk assessment. The case and spreadsheet application can also be applied to the COSO 2013 Framework focusing mostly on Risk Assessment, Control Activities, and Monitoring Activities to internal control systems. The spreadsheet application can accommodate cases that provide differing company sizes and levels of automated control environments for internal audit and management perspectives. This case and spreadsheet application provides students an opportunity to deeply understand and analyze the accounting processes, the internal controls, and the interrelationships between the processes and controls. Exposure to such a case and spreadsheet application helps prepare students to successfully complete internal control evaluations in the "real world."

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“…However, incorporating Excel also presents challenges. One major concern is the disparity in students' pre-existing skills, which can lead to frustration and hinder learning for those with limited proficiency (Davis et al, 2017). Additionally, the time commitment required to teach and troubleshoot Excel functionalities can encroach upon valuable class time dedicated to core accounting concepts (Mosbah, 2022).…”

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“…As such, the quality of service and support provided from the other systems will determine how successful the accounting information systems will be in the organization [12].…”

“…System security is an important aspect to consider because the data have been always important for organizations and ensuring that the systems are protected against any form of harm brought to them. System downtimes can be stressing to users in systems, hence having systems that can withstand any possible downtimes and that can also handle large amounts of data without crumbling is a measure of a good quality system [12].…”

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