From the start, the AIEM materials were developed to help students learn about core concepts, real-world applications, and prevailing rules related to auditor independence.
The student materials include videos on auditor independence, a set of discussion questions accompanying each video, and five revised case studies exploring each topic in greater detail. Please see below for information on how to access each of these materials.
Videos on Independence
Video Discussion Questions
Case Studies
The following three videos portray a college student, Theresa Irwin, who undertakes a video project as part of an auditing class assignment to demonstrate an understanding of the meaning and purpose of auditor independence. The video is presented in three sections, which may be viewed separately or in its entirety using the links below.
College student Theresa Irwin interviews a college professor. The professor analogizes the role of an independent auditor to that of a baseball umpire and then discusses how auditor independence helps our capital markets. Theresa learns about the auditor's obligation to exercise professional skepticism and protect the public interest, and begins to research the history of the auditing profession and independence.
Theresa interviews a group of graduate students in the school cafeteria. These students suggest practical applications and additional analogies about independence and discuss how auditor independence in appearance is important to the public. The students also talk about the importance of obtaining a CPA license and ethics in the accounting profession.
Theresa visits her mother, who is a partner in a public accounting firm. She learns how independence affects auditors, both personally and professionally. She finds out that independence rules address five primary areas: (1) financial interests, (2) business relationships, (3) employment relationships, (4) scope of services, and (5) fee arrangements. Her mother introduces each area and provides examples. In the final scene, Theresa summarizes what she has learned throughout her video adventure (sections I-III) about the importance of being independent.
The below links provide discussion questions which accompany the above videos. These discussion questions further expand on the topics discussed in the videos, however, can be answered without viewing the videos. Click on the links below to access the discussion questions to each section of the video.
The discussion questions in this section focus on the public interest, professional skepticism, financial statement users, and independence in fact and appearance.
The discussion questions in this section focus on professionalism, professions, and independence in appearance.
The discussion questions in this section focus on personal independence, application of independence rules, and five primary areas of independence.
In the handout you will assess whether you believe certain auditor characteristics are correlated with an auditor's tendency to acquiesce to the client management's preferences.
Click HERE>> to access the Student Handout.
The case studies will introduce you to independence by describing a public accounting firm's audit relationship with a company – from the firm's proposal to become the company's auditor to its ongoing audit relationship. The case studies explore five areas of auditor independence described in section III of the video: 1) financial interests, 2) business relationships, 3) employment relationships, 4) scope of services, and 5) fee arrangements. There are five case studies all consisting of simple rule-based, complex rule-based, and conceptual questions. See below for the links and short descriptions of each of the case studies.
You will evaluate relationships between the public accounting firm and the client, and determine whether the public accounting firm is independent and may propose to perform the client's audit.
The public accounting firm communicates the new engagement to its professionals. As a result, several professionals identify possible independence issues, which you must evaluate for compliance with independence.
You will evaluate potential audit team members' financial interests and business and employment relationships with the client to determine whether they are independent.
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You will prepare for a meeting with the client's audit committee to discuss the public accounting firm's independence, including relationships and services that may affect the firm's independence. In addition, you will review independence exceptions and the related consequences.
In this case study you learn that an audit team member was considering employment with the client and must determine an appropriate course of action. The consequences of impaired independence are also explored.
The Auditor Independence Educational Materials (the "Materials") are provided as an educational tool by Deloitte & Touche LLP ("Deloitte & Touche"). The purpose of the Materials is to inform and educate students about auditor independence and various auditor independence viewpoints. Deloitte & Touche does not endorse the views expressed or the academic research cited in the Materials. The Materials do not address all possible fact patterns and the guidance and rules presented are subject to change. All situations presented are hypothetical and suggested solutions and teaching notes do not represent Deloitte & Touche's conclusions on any specific independence matter or situation. Deloitte & Touche is not, by means of the Materials, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. The nonexclusive right to reproduce these Materials without explicit written permission is hereby granted to faculty in connection with classroom use, academic research, and other educational endeavors of a not-for-profit nature.
