Accounting Forum 35 (2011) 61–72

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SCAM: Design of a learning and teaching resource

Louise Crawford, Christine Helliar, Elizabeth Monk ∗, Lorna StevensonSchool of Accounting & Finance, University of Dundee, DD1 4HN, Scotland, United Kingdom

a r t i c l e i n f o

Keywords:AuditingEducational learning theoriesComputer-based learningTransferable skillsCase studyGroup work

a b s t r a c t

University accounting students often have to assimilate technical auditing knowledgewithout practical audit experience. The desire to develop an appropriate experiential oppor-tunity motivated this research – to create an audit teaching and learning resource tosimulate audit experience and facilitate the development of transferable skills. Literaturefindings and dedicated questionnaire survey results suggested that such a resource should:(i) use a web based case-study to simulate a real-life audit scenario; (ii) require group work-ing of the participants; (iii) facilitate the use and development of a range of transferableskills; and (iv) encourage a consideration of the wider business context. The web-basedresource SCAM (www.scam-plc.co.uk) was developed to address these aims. This paperdetails this development process.

© 2010 Elsevier Ltd. All rights reserved.

1. Introduction

Teaching auditing to undergraduate students involves outlining contemporary and theoretical issues in auditing as wellas teaching practical audit requirements. Indeed, the professionally accredited content of an undergraduate audit modulefocuses primarily on imparting knowledge about the technical and functional practice of corporate audit, such as auditplanning, the gathering and evaluation of audit evidence and audit reporting (see for example the professional body auditsyllabus: ACCA, 2010). Teaching materials such as textbooks, professional training manuals and lecture handouts can providethe required intellectual knowledge of auditing but the application of this knowledge to the practical reality of an audit isdifficult to simulate in a classroom or in student study time.

To address this problem, this paper outlines the process involved in designing a computer-based learning and teachingresource, known as SCAM. This motivation came from the authors teaching on an undergraduate degree programme andfound that students had difficulty in understanding an audit in practice. Students could comprehend theoretical issues suchas independence but found it harder to conceptualise other parts of the course. SCAM was thus developed to provide apractical element to audit teaching and to also integrate the development of technical and transferable skills as required bythe International Education Standards (IFAC, 2008). The Institute of Chartered Accountants of Scotland (ICAS) was approachedto provide funding for developing this resource: the authors are involved in various ICAS committees and knew that thedevelopment of an audit resource would be of interest to ICAS.

The development of the SCAM resource is grounded in three theoretical foundations of education: constructivism; expe-riential learning; and information processing. The constructivist approach to learning, where students build new conceptsonto their existing knowledge structures, is complemented by an awareness of experiential learning; this cognisance isdesigned to help students gain a deeper understanding of their audit studies by linking concepts to practice (Bruner,

∗ Corresponding author. Tel.: +44 1382 384789; fax: +44 1382 388421.E-mail address: e.a.monk@dundee.ac.uk (E. Monk).

0155-9982/$ – see front matter © 2010 Elsevier Ltd. All rights reserved.doi:10.1016/j.accfor.2010.08.008

62 L. Crawford et al. / Accounting Forum 35 (2011) 61–72

1966; Siegel, Omer, & Agrawal, 1997). Additionally, the information processing theory of education is also used in theSCAM resource which emphasises the importance of linking items together to aid their transfer into long-term memory.This paper describes the SCAM development process: it is a web-based teaching and learning resource designed to givestudents a simulated audit experience. The rest of the paper is set out in four sections: the theoretical context and liter-ature review; an outline of the research questions and methods; the research findings and SCAM resource design; and aconclusion.

2. Theoretical context and literature review

2.1. Constructivism, experiential learning and information processing theories

The general education literature highlights a number of learning theories. Many of these theories overlap, and developover time, making it difficult to formally define them. It is easier, therefore, to explore this area in terms of proponents oftheories, and their particular interpretations of the theories.

Particularly relevant in accounting education is the theory of constructivism (Bruner, 1960, 1966; Piaget, 1953, 1954;Vygotsky, 1978). Bruner (1966) contends that learning occurs by learners constructing new concepts which build uponcurrent knowledge bases. One example Bruner uses is how a child may learn about prime numbers by laying out beans anddiscovering that certain handfuls of beans cannot be laid out in completed rows and columns, but need either to be laid outin single file, or in an incomplete row/column pattern. These incomplete patterns are prime numbers. From here, a childcan go on to recognise that a multiplication table is simply a record of the number of beans in completed multiple rowsand columns. Thus, learning one concept allows for a second, related concept to be learnt more easily (Bruner, 1973). Thisexample shows how concepts can be added together sequentially to achieve new learning outcomes. There is evidence thatthis theory applies to learning accounting, and in particular to auditing. Auditors need to relate the evidence gathered duringan audit to pre-existing knowledge bases in order to assess that evidence and make decisions based upon it (Bonner, Libby,& Nelson, 1997; Bonner & Walker, 1994).

Another view of constructivism focuses on learning as a social activity where peer to peer interaction is a vital componentof the learning process (Vygotsky, 1978). In particular Vygotsky argues that students can master concepts and ideas that theycannot understand on their own with help from adults or children who are more advanced. Learning within the context ofsocial interaction may be important in an auditing context as teamwork and interaction with clients are significant aspectsof auditing (Okike, 1999).

Closely linked to constructivism is the theory of learning through experience. Through instruction and experience traineesgain the necessary knowledge to perform audits (Libby, 1995); experiential learning is a continuous process that is a grad-ual and cumulative process of acquiring knowledge (Kearsley, 1994) such that each past experience can be built upon asnew experiences are encountered (Locke, 1961). In this way, the process of education must incorporate the students’ lifeexperiences. The design of learning material must therefore take into account students’ past experiences which, when facedwith new situations, will help their understanding and appreciation of new problems and experiences. It is this interac-tion of prior and new knowledge and experience which leads to reflection on all these experiences and, thus, to learning(Dewey, 1938). A founding view of experiential learning is provided by Rogers (1951) who believes that direct confrontationwith a problem facilitates the learning process and that students are more likely to learn if they participate completelyin the learning process and have control over its direction. He defines two styles of learning: cognitive (meaningless) andexperiential (significant). Cognitive learning corresponds to academic knowledge, such as learning multiplication tables,memorisation of chemical formulae or of the vocabulary of ancient languages, rather than application within a context.Experiential learning addresses the needs, or wants, of learners and refers to the application of knowledge that comes fromdoing something, such as trainee mechanics learning about engines in order to repair a car; the learning process can onlybe seen as complete when the learner can actually perform the task, and is only meaningful and significant if the subjectmatter is related to the student’s interests and needs (Kearsley, 1994). In auditing, Libby (1995) argues that the concreteexperience of an audit forms the basis for reflection upon audit experiences; these lead to generalisations about these expe-riences that can then be applied to the next audit. Thus, it is only by actually performing an audit that a trainee can apply theconceptual knowledge that they have previously learnt, resulting in a more complete, or deeper, learning (Marton & Saljo,1976).

In more recent times, experiential learning has become typified by Kolb’s (1984) cycle of experiential learning. Kolbdefines learning as “the process whereby knowledge is created through the transformation of experience” (1984, p. 38); thisview is described by Loo (2002) in the following way:

“Learning is conceived as a four-stage cycle starting with concrete experience which forms the basis for observation andreflection upon experiences. These observations are assimilated into concepts and generalisations about experienceswhich, in turn, guide new experiences and inter-actions with the world.” (350)

Applying Kolb’s (1984) cyclical and experiential learning may be particularly relevant to accounting degree programmes,as there has been concern that Kolb’s primary phase of concrete experience has often been missing from such teaching. Forexample, in the context of teaching audit, Siegel et al. (1997) state:

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“Experiential learning can be an important instrument in improving the teaching effectiveness in auditing. Experientialeducational theory recommends that students be moved through all four steps of the learning cycles. In auditingcourses the initial learning phase, concrete experience, is most often missing.” (224)

Lucas (1997) argues further that it is the lecturers’ role in university accounting and auditing teaching to provide this“concrete experience” phase. This, in turn, relies on developing a teaching strategy that allows students to engage withpractical accounting problems. Teaching methods such as case studies, videos, computerised simulations, virtual factories,and games have all been used in an attempt to improve students’ understanding of a variety of accounting topics througha “concrete experience” phase that builds on their world view (Helliar, Michaelson, Power, & Sinclair, 2000; Maltby, 2001;McCourt-Larres & Radcliffe, 2000; Okike, 1999). The use of case studies to facilitate learning and simulate ‘concrete experi-ence’ has become increasingly popular as evidenced by recent audit textbooks such as Maltby’s ‘Cases in Auditing’, (1996)and Beasley, Buckless, Glover, and Prawitt’s ‘Auditing Cases’, (2009). In addition, many professional bodies use case studiesin their materials for teaching and assessing the advanced stage professional skills and knowledge of trainees (for example:CIMA, 2010; ICAEW, 2010; ICAS, 2009).

One final educational theory which may also be relevant to teaching auditing is information processing theory wherelearning is assumed to occur most efficiently when learners are able to link items into meaningful chunks that can then betransferred from short-term to long-term memory. Miller’s (1956) seminal work suggests that seven items at a time, plus orminus two, can be accurately converted in this way. One simple example of chunking is the way in which it can be used toremember telephone numbers. Rather than trying to remember a string of numbers, it is easier to group these into smaller,logical units – 8 and 0 becomes 80. This idea can then be extended to allow a memory task to be split into manageable chunksor categories. Schunn’s (1999) “category” knowledge reflects this learning by grouping objects or ideas into meaningful setsso that when students encounter new concepts they learn both the meaning and the categories to which they belong; if onemember of a data category possesses a property then other members of the data category may also possess this property.For example, a domesticated house cat is a member of the cat species and may therefore show the same behaviour as a lionwhich is another category of cat; a lion stalking prey on the savannah or a domesticated cat stalking birds in the garden willboth demonstrate similar behaviour.

Bonner et al. (1997) suggest that category knowledge is used in auditing as auditors look for logical groupings within theevidence that is collected. Other researchers suggest that category knowledge allows people to use their past experience torespond to new situations; experiences from one audit can be applied to similar situations in subsequent audits (Rehder &Hastie, 2004). For example, when performing an analytical review, an auditor needs to be able to see relationships and pat-terns between financial and non-financial data (American Institute of Certified Public Accountants (AICPA), 1978). O’Donnelland Lehman (1999) argue that experienced auditors use a configural processing approach and link a number of related itemstogether to form patterns that can then be evaluated. The ability to develop these categories of knowledge grows over timeand with experience, as does the ability to make judgments based on these (Fredericks, Heiman-Hoffman, & Libby, 1994; Lin,Fraser, & Hatherly, 2002). Both Bonner et al. (1997) and Fredericks et al. (1994) recommend that an awareness of categoryknowledge and knowledge structures should be introduced to accountants as early as possible; indeed Nelson, Libby, &Bonner (1995) suggest that this experience should be introduced during undergraduate accounting studies.

The three educational theories highlighted above informed the development of the SCAM teaching resource; discussionnow turns to a consideration of teaching approaches and transferable skills in accounting education.

2.2. Teaching approaches and skills development

Professional accountancy bodies have issued a series of warnings over a number of years that audit teaching may notbe reaching either the needs of students or those of employers. Indeed, a survey by the American Institute of CertifiedPublic Accountants (AICPA) as far back as 1978 reported dissatisfaction with university audit teaching in the US and, inparticular, criticised the fact that the theory that was being taught did not relate to practice. The AICPA survey was especiallyconcerned with the lack of ‘how-to’ instruction in US universities, but the final report also commented that there was an‘inadequate emphasis’ on skills in communication – particularly for employment – and in human relations (AICPA, 1978);subsequent reports by the Accounting Education Change Commission (1990, 1992) also highlight concerns with the lack of‘soft’ or ‘transferable’ skills development in accounting students. More recently, Howieson (2003) has mooted the need foruniversity accounting teaching to develop in response to changes in business; he calls for a reappraisal of teaching methodsthat are used to develop the skills that new graduates will need. Howieson (2003) suggests that the growth in computeravailability and power, advances in IT proficiency amongst graduates, and the widespread availability of accounting-relatedsoftware is leading to a reduction in compliance work for accountants and auditors. As even the smallest businesses cannow buy software that allows them to keep their own accounting records, the accountant of tomorrow needs to become abusiness advisor rather than a compliance-worker; consequently today’s students may need a different set of skills than areperhaps traditionally taught.

A potentially positive consequence of the increasingly ubiquitous computer has been highlighted by Boyce (1999); heclaims that computer-based learning (CBL) could be used to “contribute positively to the process of reforming accountingeducation” (1999, p. 192), and thereby address many of the concerns highlighted above. This reformation could, for example,include web-based learning packages that develop a range of ‘key’ skills, including communication skills and critical thinking

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skills. Web-based simulations have two main specific advantages: firstly, they can encourage the development of generaleducational and transferable skills (Boyce, 1999; Patel & Russell, 1999); secondly, as no additional software is needed oncea web-based simulation has been developed, access becomes easy and a server-wide approach only requires one copy ofa program to be uploaded rather than each workstation requiring processor space. In addition, web-based simulations canbe developed to facilitate group work; thus it may be possible to create the experience of a real life audit that is usuallyundertaken in teams.

Despite this potential, however, Boyce (1999) cautions that CBL has to be used within a “well thought-out pedagogicalcontext” (1999, p. 192), and Collins (1983) maintains that there is little benefit to be gained from simply adding computinginto teaching unless it enhances existing courses.

In designing SCAM to be most effective in the context of auditing, the authors thought that computer-based stand-alonematerial could be used to simulate a variety of problems that would enable students to apply their audit knowledge andtheir knowledge and experience from other courses in making decisions and judgements relating to planning, gatheringand evaluating audit evidence and communicating with clients. Such integrated knowledge and experience would includethe application and development of transferable skills such as IT skills, critical-thinking skills, analytical skills and ethicalconsiderations, that should all be part of current accounting and business degree programmes (Chung & Munroe, 1999;Fraser, Hatherly, & Lin, 1997; Helliar et al., 2000; Libby, 1991).

Mabey, Topham, and Kaye (1998) highlight that simulations can help to encourage conjectural learning and the formu-lation of hypotheses, develop learner autonomy and the analytical skills that are necessary for decision-making. Studentsare then able to choose how to learn and when to study and are responsible for organising the material and deciding whichmaterial to examine (Bagranoff, 1993; Boyce, 1999; Dowling, Godfrey, & Gyles, 2003; Oglesbee, Bitner, & Wright, 1988).Simulations may, in particular, help students to develop an active learning philosophy1 and provide a degree of freedom inthe learning process that can, in turn, encourage a positive learning approach, resulting in a meaningful educational experi-ence and achieve Rogers’ (1951) aspirations for experiential learning, as discussed above. Indeed, if simulations are modular,rather than linear, students can explore data further and deeper and create meaningful relationships within the data. Usinga simulated case study can “illustrate real-world institutions and practices” (Libby, 1991, p. 195, emphasis in original) asMaltby’s (1996) and Beasley et al.’s (2009) texts illustrate. The use of case studies in audit teaching can improve both analyt-ical reasoning and judgemental skills and encourage students to participate in their own learning (Campbell & Lewis, 1991;Hassall, Dunlop, & Lewis, 1996). In addition, case studies can help students develop the ability to probe for information, tomanipulate data, to analyse information, and to undertake independent research (Davies, 2000; Drake, 1999).

As auditing in practice is usually performed by a team, the development of students’ skills in group work is also animportant issue to consider. Research has focused on the advantages of using computers to encourage group-work, oftenregarded as a method for encouraging a “deeper” approach to learning (Marton & Saljo, 1976). For example, Tempone andMartin (1999) suggest that students can learn better within a group rather than alone, particularly when the purpose ofthe group is “advancing individual and collective knowledge” (1999, p. 185). Other work by Reckers and Schultz (1993)and Johnson (1994) shows that group decisions can be superior to those of individuals and Michaelson, Helliar, Power, &Sinclair (2001) find similar results in their study evaluating a group-based learning and teaching resource called FINESSE –Finance Education in a Scaleable Software Environment; students strongly agreed that group work improved their individualpresentation, communication and negotiation skills and that working in groups resulted in better grades than the individualsmight otherwise have expected.

However, a potential concern when requiring students to work in groups is that there may be personality clashes, or“freeloading”, where the balance of the work is not equal between the group members. Thatcher and de la Cour (2003)examine the free-loading issue of group work to determine whether there is any difference in the decision-making perfor-mance between groups using computers to communicate and those meeting face-to-face. They investigate whether groupdynamics encourage synergy between group members, even if the members of the group do not meet physically and losethe opportunity for non-verbal communication. Although there were differences between the performance of those groupsmeeting face-to-face and those meeting via computers these differences did not have a significant impact on the decision-making process. Further, the study found that the individuals interacting by computers were more likely to be satisfied withthe decision-making process, and by inference, more satisfied with the decisions that were made. Good communicationskills are required by International Education Standards 3 ‘Professional Skills and General Education’ (IFAC, 2008) and thedevelopment of such skills through the use of computer packages will ensure that students of the 21st century are equippedto communicate and negotiate as the profession requires.

The three education theories of constructivism, experiential learning and information processing led to the developmentof SCAM as a teaching resource for auditing covering transferable skills development using case studies, CBL and group work.The resource design allows students to build on current knowledge bases, participate in the learning experience, interactwith their peers, and be able to see patterns or categories within the data. The next section details the research method thatwas undertaken to develop SCAM.

1 Active Learning is a method of teaching and learning that gives students an active role in the learning process. Instead of the lecturer presenting thematerial, the students teach themselves through simulations and the lecturer becomes a facilitator in their learning process (Gibbs, 1992).

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Table 1Computer-based activities used in teaching and self study in audit courses.

Teaching Self-study

Currently use % Would consider using % Currently use % Would consider using %

Word Processing (e.g. MS Word) 88% 8% 83% 4%Web browser/Internet (e.g. Netscape) 83% 17% 79% 10%Presentation software (e.g. PowerPoint) 83% 13% 79% 5%Email 70% 15% 64% 27%Spreadsheets (e.g. MS Excel) 40% 40% 50% 30%Games/Simulations 22% 61% 32% 47%Instructional CD-ROMs 13% 80% 20% 33%Accountancy ledger packages (e.g. SAGE) 15% 54% 15% 39%Drill and practice computer aided learning (e.g. EQL) 15% 55% 14% 71%Statistical packages (e.g. Minitab or SPSS) 13% 47% 11% 50%Databases (e.g. MS Access) 0% 64% 8% 61%Flowcharting or Drawing packages 0% 56% 0% 40%

This table shows academics’ perceptions of the use of computers as a teaching resource and as a self-study resource, ranked in descending order ofimportance.

3. Research questions and methods

The audit teaching and learning resource was to use a case-study approach to simulate a real-life audit scenario integratingthe use of CBL and facilitating the development of transferable skills, team working and engaging students in thinking aboutthe broad business context. The first stage of the resource design was to identify if the theoretical context and findings fromthe literature were relevant to teaching auditing and a questionnaire survey, sent to accounting academics, was used todetermine: (i) the teaching methods currently used in auditing and accounting modules and the potential use of CBL; and(ii) the relative importance of various audit topics for a student’s understanding of the audit process.

A postal questionnaire survey was sent to all academics that taught or researched auditing, selected from the BritishAccounting Review Research Register (Helliar, Gray, & Monk, 2002). One hundred and forty two questionnaires were sent outand 56 questionnaires were returned, representing a response rate of 39%. The questionnaires comprised four sections onrespondents’: (i) background information; (ii) views about broad-spectrum educational issues; (iii) experiences of the use ofcomputers in education; and (iv) topics that should be covered in audit courses. In addition, each questionnaire had a finalsection for comments. Most of the questions asked were on a 5-point Likert scale, where strong agreement/very importantwas rated ‘1’ and strong disagreement/little importance was rated ‘5’. A few questions asked for a set of variables to beranked in order of importance, and some questions had a set of variables where respondents were asked to indicate thelikelihood of them being used in their teaching. The questionnaire findings were then used to inform the next stage of thisresearch: the actual development of the SCAM audit teaching and learning resource software.

4. Research findings and SCAM resource design

4.1. Questionnaire survey

The questionnaires sought to determine the current and potential teaching methods used by university lecturers toassess the extent to which they integrated, or were likely to integrate, computer-based packages in their courses. Themethods of instruction used by lecturers were not surprising – virtually all of them used formal lectures and small grouptutorials and seminars. In addition, over half of the academics reported that they used participative teaching methods such ascase studies, interactive lectures and student presentations supporting the constructivist (Morris, 2001) and experientialist(Davies, 2000) approaches to teaching. Computer based packages such as EQL were suitable for student self study. Table 1shows that, although few lecturers currently used any computer packages, most of them reported that this was an area thatthey would consider using much more in the future. Indeed, 61% were prepared to consider using games/and simulationsand 80% would use instructional CD ROMs.2 This finding suggests that accounting academics are keen to make greater useof computers and technology in their teaching and welcomed the development of a CBL teaching resource.

An important area in the design of the teaching resource was to consider which part of the audit should be built into thedesign of the package. The academics were asked to rank the importance of 41 audit topics that are typically included inprofessionally accredited audit courses. The results reported in Table 2 show that the more conceptually demanding topics,such as: independence and ethics; audit risk including inherent risk; materiality; fraud and auditor responsibility; and typesof audit evidence, are ranked highest in importance for audit teaching and student understanding. Planning and reviewingare also ranked highly by respondents (mean = 1.74), as is analytical review, with a mean of 1.61. This confirmed to the

2 Use of web-based packages was not included in the survey as, at the time of distributing the questionnaire survey, there were none available to theknowledge of the authors.

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Table 2Academic ranking of audit topics for student understanding and for importance in teaching.

Rank Mean

Independence 1 1.04Control risk 2 1.30Inherent risk 3 1.35Fraud 3 1.35Detection risk 5 1.39Professional ethics 5 1.39Audit risk 7 1.35Legal liability of auditors 8 1.43Materiality 8 1.43Evidence-types, sources, working papers 10 1.48Auditing standards (UK) 11 1.52Audit reports 11 1.52Corporate governance 13 1.57Analytical review procedures 14 1.61Internal control evaluation 15 1.65Substantive testing 15 1.65Computer auditing 17 1.74Planning and reviewing 17 1.74Compliance testing 19 1.78Subsequent events review 20 1.96Sampling 21 2.00Information systems auditing 22 2.04Auditing standards (International) 22 2.04Non audit services 22 2.04Organisation of the profession 25 2.13Rotation of auditors 26 2.22Collusion 26 2.22Auditor change 28 2.27Auditing history 29 2.30Assurance services 30 2.35Debtors circularisation 31 2.70Auditor concentration 32 2.71Stock counts 33 2.74Fee setting procedures 34 2.87Gearing/Leverage 35 2.91Flowcharts 36 3.00Control accounts 36 3.00Batch and processing controls 38 3.23Sales and Purchase ledgers 39 3.38Bank reconciliations 40 3.73Advertising and marketing by audit firms 41 3.82

This table shows ranked questionnaire responses in order of mean scores. These are based on a 5-point Likert scale where 1 indicates ‘very important’ and5 ‘not at all important’.

authors that these ‘important’ knowledge areas should be incorporated into the teaching resource. For example, studentsshould be encouraged to analyse risks and look at different types of evidence to ascertain whether any malpractices weretaking place, and also to link different pieces of evidence together to make audit judgments. The idea of building on classroomknowledge and chunking data into recognizable patterns reflects the learning theories of constructivism and informationprocessing.

The findings from the questionnaire survey reinforced the findings from the literature review and led the authors todesign a computer based teaching resource using a case study format that simulated a real-life audit scenario. The resourceembeds within the design the three educational theories of constructivism, experientialism and information processing byencouraging interaction and participation and developing students’ category knowledge. This teaching and learning resourcewas web-based to maximize the advantages of such a platform: students could self-manage the resource and use it at timesand places that suited them. In addition the resource embedded those topics that academic questionnaire respondentsidentified in Table 2 as being the most important for audit students to understand.

4.2. Resource design and use

In accordance with Howieson (2003), the authors wished to develop a resource that encouraged a wider understandingof the business environment and to do so it was essential that a sector was chosen that most students would be ableto identify with; the resource became based on a fictitious supermarket group, supposedly listed on the London StockExchange, called SCAM. The SCAM case study has been written as a series of web pages; it is based on a real company’saccounts, adapted to suit the needs of the resource. The supermarket sector is familiar to many students, either as customers

L. Crawford et al. / Accounting Forum 35 (2011) 61–72 67

Exhibit 1.

68 L. Crawford et al. / Accounting Forum 35 (2011) 61–72

Exhibit 2.

or employees, thus encouraging a constructivist style of learning by enabling them to build upon their existing knowledgebases of the supermarket industry, of business in general, and of auditing. In addition, as there are a limited number of largeUK supermarkets groups it becomes feasible for students to examine real life competitors such as Tesco, Sainsbury’s andWall Mart’s subsidiary Asda. Other reasons for choosing a supermarket group included: the variety of stock that is held; theshelf life of stock and the issue of perishable goods; the logistics of the supply chain; head office functions such as humanresources; and the variety of considerations around local high street and out of town stores.

By allowing students to participate in, and control, their learning experience through an interactive web interface usingreal world examples, an experiential learning mode is facilitated. The constructivist approach is also utilized as a numberof different existing knowledge bases are used initially, which are then built upon as information is gathered and analysed.Finally, using information processing theory, the students collect and evaluate evidence in the case study which makes themcategorise the data and use knowledge links which are then used to form audit judgments. Thus, students have to apply theirknowledge and experience to evaluate issues of: independence and ethics; audit risk and materiality; threats of malpractice;and the collection of different sources and types of audit evidence.

In the SCAM resource a tutor assigns students to groups and each group plans the audit of the “case” company. Thesuccessful Tutor and Group Support Scheme (TAGS)3 system was employed in order to develop a platform independent andeasily accessible web-interface for the resource (Allison, Bramley, Serrano, & Michaelson, 1999).

The SCAM case material comprises four main elements: (i) the un-audited financial statements and annual report of thelarge fictitious supermarket SCAM plc, including notes to the accounts, previous year comparisons and corporate governanceinformation (see Exhibit 1 for the Income Statement); (ii) management information showing current profit margins andwaste food management; information on the company’s systems for recording purchases, sales, fixed assets and payroll;and other day-to-day operational information (see Exhibit 2 for the waste food data); (iii) brief biographies of a number ofkey staff members from the CEO and FD to a warehouse manager, a checkout assistant and payroll administrator (see Exhibit3 for CEO); and (iv) an interview module where students can ask key staff any questions that might help them to plan theaudit (see Exhibits 4(a) and (b) for the interview module).

When using the resource, students are required to socially interact in teams in a constructivist style of learning, and to usethe information presented within the case to plan the final audit of SCAM plc. Such planning enables students to use all the

3 TAGS is a modular and generic framework for Distributed Learning Environments, capable of supporting arbitrary relationships between tutors, studentsand learning resources. It allows any web browser to be used, all users can see their resources on their “home page” and the TAGS framework offers facilitiesfor simple yet powerful web-site construction and organisation. Each user generates an activity record when using the system which means that user activitycan be easily monitored and any apparent “free-loading” can be identified, and penalised, if necessary.

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Exhibit 3.

available information, together with their knowledge and understanding of supermarkets, the latest business developmentsin the sector and the state of the current economy, in order to identify areas that might require extra investigation duringthe audit. Students build on their existing knowledge in a constructivist manner, and determine patterns within the datareflecting an information processing approach; routine audit tests need to be planned as well as recognising those areas ofaudit risk specific to SCAM plc that will require more detailed audit testing. Students are expected to review the financialstatements of SCAM plc and to evaluate the risk and materiality specific to the case study information of SCAM plc. Addition-ally, students need to consider issues of independence and ethics emerging from their review of the staffing, managementand corporate governance information. The name ‘SCAM’ is (unsubtly!) intended to signpost students to the possibility ofunethical or fraudulent practices in the case and encourage a healthy professional scepticism to the information supplied;such an attitude is required by IES 8 ‘Competence Requirements of Audit Professionals’ (IFAC, 2008). The SCAM case containssome such examples of bad practice which the students should discover. For example, the payroll manager does not deletestaff from the database as they leave, but instead changes their bank account details to his own. This shows a lack of propersupervision and poor internal controls. Further, students develop their judgemental skills as they analyse the evidencegathered and determine how much credence to give to the information from various sources. In order to achieve the auditplanning objective, students need to use their prior knowledge of auditing, business and accounting from the classroom andfrom their own work and daily experiences; such a combination illustrates the constructivist and information processingelements of their learning. As the case is web based, the students can choose which area of the case to explore at any time,allowing a more self-directed learning approach which facilitates experiential learning (Rogers, 1951).

70 L. Crawford et al. / Accounting Forum 35 (2011) 61–72

Exhibit 4.

In their audit planning, students use the interview module to ask online questions directed to the various key staff of SCAMplc; 24 members of SCAM’s staff have their biographies listed on the resource. These online questions go to the tutor whoanswers them appropriately. An automated database of answers has been created to reduce the tutor’s time commitmentand to ensure that all students receive consistent answers to similar questions. The interview module encourages studentsto develop their communication skills, critical thinking skills and their ability to ask concise, well-thought out questionsdirected to the relevant staff member of SCAM in preparing the audit plan. The development of such interpersonal andcommunication skills, and the prioritization of information, is enhanced further by restricting students to the number ofquestions their audit team can ask SCAM staff each week; each student group has to determine the questions that they wantto ask the notional SCAM staff as only a limited number of questions are permitted each week which ensures that tutors arenot overburdened; such a constraint also reflects practical audit situations. To review the case and question the audit client’sstaff, students have to learn to allocate and schedule workloads so that the most efficient use is made of their collective

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time. Working in groups or “audit teams” adds an element of concrete experience to the use of SCAM. Although studentscan access the resource from any computer with Internet access, the report detailing their audit plan has to be submittedwithin a certain time limit; this encourages the development of transferable skills such as negotiation, time managementand planning skills. Student participants need to be able to communicate with each other so that all of the team gain access tothe same information to agree on their conclusions. The use of teams also helps to develop category knowledge, an importantaspect of information processing theory, as inexperienced auditors often lack the necessary category knowledge to knowwhich questions to ask (Bonner et al., 1997). SCAM has also been designed to expose students to contradictory information,encouraging the development of category knowledge using an information processing approach and encourage discussionsamongst the team. In addition, working in groups can also help students to gain experience in making and defending decisionsbased on the information to hand; this also illustrates the experiential and constructivist approach to learning. Overall, thedesign of SCAM has met the initial objective of the authors: to develop a teaching resource for audit students.

5. Conclusion

This paper documents how a web-based resource – SCAM, was developed to enhance the audit teaching at universitiesand bridge the perceived gap between theory and practice. The three educational theories of constructivism, experientiallearning, and information processing were used to design the resource in simulating a concrete experience of auditing forstudents and facilitate the development of transferable skills including IT proficiency skills, team working, analytical skills,communication skills, critical thinking skills and self-study skills. Responses to a questionnaire survey confirmed that casestudies and “games” could be used to enhance audit teaching. A case study approach formed the starting point for theresource development, based on the familiar business setting of a supermarket group. SCAM is currently in use at a UKuniversity; a longitudinal questionnaire survey is underway to assess the extent to which it meets the needs of academicsand students. The resource can be accessed at http://www.scam-plc.co.uk and is free to all users. Please contact the authorsfor a username and password; we welcome any feedback on your experience of using it.

Acknowledgement

The authors would like to thank The Institute of Chartered Accountants of Scotland (ICAS) for funding this project.

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Louise Crawford BSc, CA, PhD is a Lecturer at the University of Dundee. A member of ICAS having trained with KPMG, she began lecturing in 1995and is interested in professional accounting education, financial reporting and governance in developing nations and the not-for-profit sector.

Christine Helliar BSc, FCA, PhD, FRSA, FHEA, MISTC is Dean of the School of Accounting & Finance at the University of Dundee. She trained as CharteredAccountant with Ernst and Young in London and then moved into investment banking in the City of London. She has a number of research interestsincluding: accounting and finance education; auditing; corporate governance; derivatives and treasury risk management; financial reporting; risk andcontrol. She was part-time Director of Research at The Institute of Chartered Accountants of Scotland from 2003 to 2009 and is currently chair of theBritish Accounting Association.

Elizabeth Monk BA (Hons), MSc, FHEA, PhD is a Lecturer at the University of Dundee. Her PhD was in audit education and she continues to researchin this area. She is also interested in corporate governance in developing countries and in the management of accounting information.

Lorna Stevenson BA, CA, MAcc, FHEA is a Senior Lecturer at the University of Dundee. A member of ICAS, she began teaching in 1993 and is interestedin the social, environmental and economic consequences of accounting, and the implications of these both for wider forms of accountability andaccountants’ education.