Waste is Our Business, Inc.: The Importance of Non-Financial Information in the Audit Planning Process

The objectives of this case are: (a) to alert students to the importance of non-financial information in the audit process; (b) to develop students' ability to search for relevant financial and non-financial information in the audit planning process; and (c) to emphasize the importance of maintaining professional skepticism and to resist the natural tendency to over-rely on financial information when conducting the financial statement audit. Students are asked to consider both financial and non-financial information when evaluating the client's account balances. The client is in the waste business where there are a number of market, regulatory, and political factors that may affect the valuation of different accounts. Students are also directed to consider the importance of non-financial information in the integrated audit mandated by PCAOB Standard 2 and in fraud detection. The case can help students learn to explicitly consider non-financial information and understand the significance of integrating such information with financial data. The case is suitable for use in undergraduate or graduate auditing and assurance courses.