Abstract The Upper Plains Auto Rentals (UPAR) case presents an account of issues encountered during the client acceptance and planning stages of the audit of a private rental company (whose identity has been disguised). To facilitate classroom use, the case is divided into two parts. Part I of the case requires students to evaluate the various risks associated with accepting a new audit engagement and Part II addresses audit planning judgments. The case and teaching notes make tour contributions. First, by considering factors evaluated by auditors at the client acceptance stage, Part I of the case provides a convenient, yet realistic, means for discussing the AICPA's recent characterization of "Engagement Risk." This expanded view of risk encompasses not only the traditional audit-risk concepts, but also the risks that pertain to clients' and auditors' businesses. A second contribution is that the case requires students to integrate their knowledge of auditing, financial accounting, and information systems when evaluating risk and developing an audit plan. Therefore, the case is ideal for "capstone courses" that recently have been introduced into the accounting curricula. Third, the case demonstrates how risk assessments evolve as evidence is gathered during audit engagements. Finally, the case is a useful vehicle for introducing auditing research into the classroom, as demonstrated in the teaching note. In so doing, the case provides an opportunity for educators to overcome educational barriers discussed in Auditing Practice, Research, and Education: A Productive Collaboration (AICPA 1995).
Phillips et al. (Sat,) studied this question.