Saurav K. Dutta

Considering Multiple Materialities for Account Combinations in Audit Planning and Evaluation: A Cost Efficient Approach

An analytic framework is provided for incorporating different user perspectives on materiality into the audit process. The framework serves as a tool for disaggregating materiality to specific accounts based on materiality criteria for accounts and account combinations. To improve audit efficiency, the planning method incorporates the relative cost of auditing various account balances. It extends existing models of audit risk and materiality by considering explicitly the materiality of account combinations (sums and ratios) to enhance audit effectiveness.

Enhancing environmental awareness in future business leaders

In this paper the limitations of the current business education paradigm are discussed along with the consequential adverse impact on business decision making and society. The leadership role undertaken by some corporations in internalising sustainability measures into their strategies are then briefly discussed. Some of the commonly taught topics in management strategy and accounting courses which typically ignore social concerns are then outlined. A framework is presented for inclusion of sustainability issues in the commonly taught tools of managerial decision making. The paper concludes by exploring the ramifications of incorporating these concepts into business education.

Analysis of accounting academe's response to structural changes in the profession using the disruptive technology framework

There have been numerous calls for reforming and updating accounting curriculum to meet the evolving needs of the profession. Despite these calls having come from influential sources, little change has taken place. The failure of accounting curriculum to adequately adapt to changes in the accounting environment is consistent with the predictions of the theory of disruptive technology. We enumerate the potential consequences from the failure to adapt and describe possible actions that can help mitigate them.

Managing group audit risk in a multicomponent audit setting

This paper considers the challenges in planning the scope of auditing procedures in a group audit setting for an entity with geographically dispersed components which vary in risk characteristics. Auditing all the components for a complex group entity is often infeasible, hence the auditor faces risk from components not audited, as well as the normal sampling risk resulting from applying audit procedures to certain components. Auditing standards do not explain how to consider the risk factors and consider what portion of a multiple component entity should be selected for audit to be able to issue an unqualified audit opinion on the group. In this paper we describe a step-by-step method for determining a minimum number of component audits needed to support an aggregate low level of audit risk of material misstatement. The paper responds to calls from academics, practitioners, and standards-setters for theoretically valid and practically feasible solutions to the group audit problem, using a method that combines professional judgment and experience with basic statistical principles in an ensemble approach.

CSR Initiatives Across the Value Chain

The possible effect of the Dodd-Frank Act on internal auditing and corporate culture has been the subject of wide speculation by experts. But the author of this article cautions that what it is feared to do at some point—and what it actually has done to date—are broadly different. Is it likely to rehabilitate corporate cultures from the inside out? Will it be effective? The author, an expert in forensic accounting, weighs in with his opinion.