A real-life case study of audit interactions—resolving messy, complex problems

Real-life accounting and auditing problems are often complex and messy, requiring the synthesis of technical knowledge in addition to the application of generic skills. To help students acquire the necessary skills to deal with these problems effectively, educators have called for the use of case-based methods. Cases based on real situations (such as the one presented in this paper) are viewed as being of most educational value. This case is based on interviews with each of the three key parties involved with the final stage of the audit—the finance director, the audit engagement partner and the audit committee chair. The valuation of intangibles in business combinations (IFRS 3) is the issue which causes the audit interactions described. Although some suggestions are included, the case may be used very flexibly, depending on time constraints, the nature of the course and programme in which the case is embedded, and instructor preferences.