The Ex-Files, A Payroll Teaching Case

Abstract

Designed to be used in undergraduate or master’s level courses in auditing or forensic accounting, this case asks students to evaluate a private construction company’s financial information to determine if fraud has occurred. Through this evaluation, students develop knowledge of the payroll cycle, control risk, audit planning, audit evidence, and forensic analysis. Based on an actual incident, this case illustrates a fraud investigation and account analysis performed by a fourth-year undergraduate student. In conducting the case, students are asked to evaluate evidence, analyze internal controls, identify and evaluate financial evidence, and develop responses based on evidence gathered. The names of the organizations and individuals have been disguised to preserve anonymity.