An Example of

Library & Faculty Collaboration:

Lessons Learned from an Accounting CourseHarold Gee, Rita Ormsby, and Ryan Phillips

The William and Anita Newman Library

Baruch College, City University of New York

151 East 25th St., New York, NY 10010

www.baruch.cuny.edu

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The Delivery; Hands-on Library Workshop

Librarians’ Learning Goals for Students:

1. Identify and choose appropriate library resources relevant to the assignment

2.Understand the different types of content, features and functionality of various resources

3.Create effective search techniques for each resource

4.Gather and evaluate the information to form proper conclusions

Teaching Goals of Librarians:

1.Demonstrate how to find accounting journal articles, Wall Street Journal articles, and books on the assigned companies as well as broad topics such as inventory fraud detection, professional skepticism, audit risks, and U.S. and international accounting and auditing standards

2. Instruct students on how to use RIA Checkpoint, CCH Accounting Research Manager, ABI/Inform, Business Source Premier, SSRN, Mergent WebReport, Thomson Research, Moody’s Bank & Finance Manual, EDGAR Online I-Metrix, and LexisNexis Academic

3.Show how to locate professional auditing and accounting standards, along with explanatory information

4.Demonstrate how to locate SEC and SEDAR filings, including those made prior to electronic filings through EDGAR

5.Describe how to find information on “professional skepticism, “ “due diligence,” and “financial fraud”

6.Explain sources for and the significance of SEC Accounting and Auditing Enforcement Releases

7. Illustrate how to search PsycINFO and PsycArticles for the “people side” of business, such as “executive psyche,” and “financial stress” and “motivations”

8.Provide tips for analyzing information found in Knapp’s audit cases. What red flags existed?

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The Plan for Collaboration

An accounting professor, Dr. Julius Cherny, assigns one of 9 audit failure cases to 75 seniors for them to address the following main questions:

•What factors contributed to the audit failure?

•What are the problems?

•What are the recommendations to the problems?

Librarians met with the accounting professor to prepare the workshops. Three separate and concurrent hands-on library workshops were conducted for students.

•Students provide feedback to librarians at the workshop

•Librarians provide feedback to the professor

•The professor confers with librarians after grading case assignments.

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ACC 5400 Course Description

Principles of Auditing is an introduction to the profession of auditing with emphasis on the audit of financial statements.

Attention is given to:

•ethics, legal liability, report writing

•the concepts and methods of auditing, including sampling

•analytical tests

•computer-assisted techniques

•and risk assessment

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The 9 Audit Failure CasesFrom

Contemporary Auditing: Real Issues and Cases

By Michael C. Knapp

•Crazy Eddie Inc.

•Enron Corp.

•Health Management Inc.

•Lincoln Savings & Loan Association

•Livent Inc.

•The Leslie Fay Companies

•OAO Gazprom

•United States Surgical Corp.

•ZZZZ Best Company Inc.

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Lessons LearnedThe accounting professor and librarians found:

• Before the library workshop, most students go to Google for information as they view it as the “library.” Some students lack a knowledge of information standards. “Students need to develop a network of ideas and thoughts. They need more training to connect the dots.”

• The world is drenched with data and information. Students must develop effective skills and knowledge to navigate a vast array of sources to find relevant information.

• “The most important place on campus is the library. It’s underutilized.” The library is not just a repository for books but a place for information.

• Students learn the importance of investigation and communication in conducting an audit of a company.

• Students may have quick minds but they need more research experience. They need to develop appropriate critical thinking skills and perform proper research techniques.

• Some students have experienced an authoritative education structure. They dare not to question the teacher and think for themselves - making the concept of being “skeptical” difficult to grasp.

• “It’s best to teach not where to look, but how to look...” for information.

• An accounting student stated, “The library workshop in addition to helping me with my research project also opened my eyes to the wonderful possibilities of how one goes about finding information.”

• Students found the workshop “useful, helpful and interesting.”

• Compared to the previous year, the number of works cited in the students’ papers have increased and came from higher quality resources.

Some thoughts of Sam E. Antar, former CFO of Crazy Eddie, and convicted felon:

• Unexamined acceptance is the auditor’s worst mistake in judgment and the fraudster's greatest hope.• Critical thinking is an important skill. You cannot stop white collar crime or investigate it credibly with a "check the boxes" approach. Auditors must be taught investigative skills.• Criminals fear people who have good questioning skills. • "Don't trust, just verify" instead of "trust, but verify" should be the auditor's mindset. • Most white collar criminals are likable people. They use their personality as a tool. White collar criminals use your humanity, personality, and good intentions against you as weaknesses to be exploited in the execution of their crimes.

“‘Crazy Eddie wasn't crazy, he was crooked.’ - U.S. attorney in Newark after Eddie Antar pleaded guilty.”

1992

Barry Minkow served almost eight years of his 25 year in prison term and upon release became a campaigner against corporate fraud.

“When our stock went from twelve dollars to eighty dollars per unit I would get letters from people telling me how great I was and what a business genius I was. The media heralded be as the ‘soaring stock wiz kid.’ What people thought about me became the prize and an end in itself. Money was merely a tool to gain the approval and acceptance of people. “

“When it was time to release earnings to Wall Street, every quarter had to be a little better than the quarter before, despite how awful and unprofitable the business really was, because my worth as a person was tied up in the performance of the stock. What I did, my achievement, was far more important than who I was as a person. No auditor, investment banker, or board of directors was going to get in my way!”Excerpt from “Cleaning Up” by Barry Minkow.

1989

Keating Pleads Guilty to 4 Counts of Fraud

April 7, 1999

By CHRISTIAN BERTHELSEN

Banker Charles H. Keating Jr. pleads guilty to four counts of fraud and admits taking $1 million from American Continental Corp, parent company of Lincoln Savings and Loan, whose failure in 1989 cost taxpayers $3.4 billion; Keating will pay no fines and will not be returned to prison in exchange for pleading guilty; Government will dismiss fraud charges against Keating's son, Charles 3d, as part of plea agreement.

Two Livent Executives Are Convicted of Fraud

Photos by Chris Young/Canadian Press

Garth H. Drabinsky, left, and Myron I. Gottlieb were convicted on Wednesday. By IAN AUSTEN Published: March 25, 2009

OTTAWA — The Canadian impresario Garth H. Drabinsky, who served as the chief executive of the defunct Broadway production firm Livent, and his business partner Myron I. Gottlieb on Wednesday were convicted of forgery and defrauding shareholders of about 500 million Canadian dollars, or more than $400 million.