A Comparison of Information Systems Coverage in the CPA, CIA and CMA Examinations for the Period 1987-1991

In recent years, three major accounting professional organizations, the American Institute of Certified Public Accountants (AICPA), Institute of Management Accountants (IMA) and Internal Auditors Institute (IIA) have considered and issued statements on the body of knowledge deemed necessary for practice as a Certified Public Accountant, Certified Management Accountant and Certified Internal Auditor. In each instance, knowledge and skills in information systems technology were included. This is not surprising, in view of the fact that changes in technology have dramatically altered the way in which accounting data is gathered, processed, stored, accessed and reported. Each of these professional organizations also requires or recommends the passing of an organization-sponsored certification examination for entry into or recognition within the various practice areas. While the examinations are not the only means of assessing the knowledge and skills necessary for certification, they are an important tool in evaluating the extent of the qualifications presented by a candidate. In view of the above, one may postulate that the certification examination, in each instance, would include coverage of the areas of knowledge included in the prerequisite body of knowledge. In particular, since each of the professional groups cite information systems (IS) knowledge as an important knowledge component, one would expect to observe test items addressing current IS in each exam

Internal Auditor Participation in Systems Development Projects

There are differing viewpoints in the internal auditing literature regarding the role of internal audit in systems development projects. One argument is that internal audit should act as consultants for such projects. A counter argument is that if internal auditors act as consultants this could impair in dependence. This study surveyed chief audit executives to determine their perceptions of the role of internal audit in systems development projects as well as the actual involvement of their departments in such projects. The findings show that chief audit executives place more importance on internal audit acting as consultants and less importance on independence in these projects. The results also suggest that internal audit has limited involvement in the different phases of the Systems Development Life Cycle of these projects

Interviewing the Client

This paper examines an assignment where students taking either an introductory auditing students or an accounting communications course interview a client to gain an understanding of internal control and the interview process. Students document the results of the interview in a memorandum. The paper provides detailed information regarding the design and implementation of a portion of the internal control system. The three main objectives of the assignment are 1) to provide students with the opportunity to demonstrate, develop, and enhance their communication skills; 2) to convey a realistic picture of the accounting environment; and 3) to familiarize students with a typical responsibility of entry-level accountants

An Empirical Examination of the Usefulness of the Motley Fool\u27s Flow Ratio

An item in the Motley Fool recently caught our attention. The article “Cisco vs. Lucent: The Flow Ratio Tells All” (by Matt Richey, June 6, 2000, in The Motley Fool.fool.com), introduced a new ratio that Richey claimed to be useful for measuring the investment worthiness of a company. Since our Financial Statement Analysis course covers traditional ratio analysis and since we were exploring some research ideas on measuring liquidity, the Fool Ratio seemed worthy of investigatio

Using Benford\u27s Law to Detect Fraud in the Insurance Industry

Benford\u27s Law is the mathematical phenomena that states that the first digits or left most digits in a list of numbers will occur with an expected logarithmic frequency. While this method has been used in industries such as oil and gas and manufacturing to identify fraudulent activity, it has not been applied to the health insurance industry. Since health insurance companies process a large number of claims each year and these claims are susceptible to fraud, the use of this method in this industry is appropriate. This paper examines the application of Benford\u27s Law to four health insurance companies located in the Midwest. For each company, analysis was performed on the first digit distribution, the first two-digit distribution, and providers with high volumes of claims. The results show that the populations are similar to the frequencies predicted by Benford\u27s Law. The findings also suggested possible fraudulent activity by specific providers, however, the companies determined that these results occurred due to abnormal billing practices and were not fraudulent. The insurance companies that participated in this study will continue to use this method to further detect fraudulent claims