How a hands-on project changes students’ minds about auditing

A community outreach project at Ohio Northern University (ONU) has been successful in changing accounting students’ minds about auditing as a career and taking the CPA Exam.

For the past several years, ONU students have performed agreed-upon procedures (AUP) engagements for three churches in Ada, Ohio, as part of Auditing 2, a class offered in the spring. The project allows for the hands-on application of various audit techniques and methodologies in a real-world setting. So far, 33 students have participated in the last three years.

All participants were asked about the effect the project has had on them. Seventy-five percent said the experience improved their perception of auditing as a career because auditing proved to be more engaging and impactful than they previously thought. Sixty-five percent said they feel more motivated to pursue the CPA Exam.    

The church audit project was conceived to expose students interested in an accounting or finance career to a real-life audit, understand the complexities and nuances of financial statement audits, and encourage them to ask questions and apply classroom knowledge.

Participating helps students develop a range of skills, from technical accounting abilities to power (aka soft) skills like teamwork, leadership, communication, and problem-solving. The diverse composition of audit teams, including individuals with varying levels of experience, fosters an environment of peer learning and knowledge sharing. It also provides a concrete example for discussing ethical dilemmas and the impact of financial mismanagement or fraud.

The church audit project is a particularly good opportunity for students who are not going to intern or have not yet interned. Exposing students to the work environment is important for their early career development. Students often are not able to connect what they are learning in the classroom with real-life settings and do not feel comfortable enough to ask questions.

The project was also intended to provide a service that these churches might not otherwise be able to afford, and we hope it helps build a sense of social responsibility among participants.

The project is included in ONU’s accreditation report.

Planning the audits

Participating students are assigned to three AUP engagement teams. Some of the students will have completed audit internships and are able to share knowledge gained during the internships with others on their team.

One individual per group is chosen to be the engagement leader. This person is responsible for delegating tasks and communicating with the church treasurers. Then, each team meets with their church treasurer and begins the planning process. 

During the initial meeting, each team inquires about the church’s operations, financials, and internal controls. The teams then assess risk and determine a materiality threshold, which is the financial amount at which misstatements could influence decisions of the users of the financial statements. Once this is complete, the teams send the churches a list of requested documents and policies to begin the fieldwork. 

Fieldwork testing and wrap-up

Next, the teams start with fieldwork testing, which includes the following:

• Cash disbursement and receipt testing;
• Bank reconciliation testing;
• Bank confirmation testing;
• Checking account reconciliation testing; and
• Fund balance report testing.

Each team makes its selections of each testing area above through generating a sample of transactions. Within each control testing workpaper, the teams examine the support received in the document requests. The class instructor and church contacts are available to address questions.  Oftentimes, these questions relate to timing of the performance of a control, consolidation of cash accounts of the financial statements, and degrees of responsibility of the control owners.

Once the majority of the testing is complete, each team schedules an individual meeting with its church representatives to update them on the project.

After completing all fieldwork, the workpapers are reviewed by the class instructor, who checks them and approves them for accuracy and completeness. The teams then prepare final reports and representation letters to discuss their findings. Fieldwork takes about eight weeks to complete.

Each team then meets with representatives of their church to discuss and present the findings. 

Participants value the experience

After presenting the findings to the churches, students reflected on the impact the project has had on their professional development:

• 85% said the experience significantly improved their auditing skills, particularly in practical application areas relevant to the CPA Exam.

• 90% reported a deeper understanding of auditing standards and practices, feeling better prepared for both the CPA Exam and professional challenges.

• 72% of students expressed a higher likelihood of pursuing a career in auditing after the project, with many citing a newfound sense of purpose and clarity in their career path.

• 63% felt that the experience contributed positively to their professional identity as future auditors, emphasizing the role’s societal importance.

• 95% recommended more real-world auditing experiences be integrated into the curriculum, suggesting it as essential for bridging the gap between theoretical knowledge and practical application.

• 88% believed additional hands-on auditing projects would better prepare students for the CPA Exam and careers in auditing, calling for partnerships with more local organizations for audit projects.

— Steven Ward is a current graduate student and CPA candidate, and Jacob Crowley, CPA, is an assistant professor of accounting, both at Ohio Northern University. To comment on this article or to suggest an idea for another article, contact Jeff Drew at Jeff.Drew@aicpa-cima.com.