Accountancy students taking the Fraud Examination class at the UNL College of Business Administration are not only learning what it takes to perform a fraud risk assessment – they’re actually doing one in class. The service learning module of the course gives students the opportunity to perform a fraud risk assessment of internal controls for a local non-profit organization. This lets the students practice what they learn in the classroom and at the same time give back to the community.
Dr. Janice Lawrence, the instructor of the class and director of the CBA Business Ethics program, believes service learning is a win-win for everyone.
“There have been a rash of frauds that have occurred locally in small non-profits,” Lawrence said. “These small groups often don’t have the resources to hire an audit or personnel to separate their financial activities as they should. So our accounting students are taking what they learn in class, and then performing an assessment and providing suggestions to strengthen the internal controls of a local not-for-profit.”
Scott Stepanek, an MPA student from Papillion Neb., was one of the students tasked with making the final class presentation to the non-profit that students were assessing this semester. He explained how the team approach helped everyone learn the entire process that it takes to complete a comprehensive review.
“We broke the assessment up into the different parts of the fraud review,” Stepanek said. “One group wrote the letter to the organization, one group interviewed the client, one group identified the weaknesses, one group identified solutions and the last group that I’m in will present it to the president of the organization we are trying to help.”
The students noted that without this experience many of them would not be as prepared to perform a fraud risk assessment professionally.
“It’s been a really good experience to get the hands-on experience, because for most of us this is what we want to go on and do in our careers,” said Rachel Heeney, an MPA student from South Sioux City, Neb. “I never had any fraud or auditing experience, so everything we did was important for me to learn.”
Another member of the presentation team was Rachel Manning, an MPA student from Exeter, Neb. She recognized the positive impact of working with a real world client.
“It’s kind of exciting that we’re going to be presenting our findings to the president of an organization, and that we’re getting the experience on a professional level,” Manning said. “The interview team did go out earlier in the semester and got to talk with them one on one, but this is the first time that our whole class will meet with the client.”
Kristen Seda, an MPA student from Albion Neb., was one of the students who interviewed the non-profit granting organization that students audited this semester.
“It was important to convey to the organization early on that we didn’t think that fraud was occurring, but that we were just trying to help them improve their policies so that it wouldn’t happen in the future,” Seda explained. “We took detailed notes and came back and conveyed what we found to the rest of the class. We learned how to better communicate those things in the future because we found that even toward the end of the class there were things that those of us on the interviewing team knew, that other people in the class still didn’t know.”
Alex Wachholtz, an MPA student from Papillion, Neb., pointed out that another value to the class was that it gave students insights into financial considerations regarding a small organization compared to larger companies.
“My group identified red flags, or internal control issues that the non-profit might have, and then discussed it and sent it off to the next group to identify ways to mitigate those risks,” Wachholtz said. “It was interesting to look at a smaller non-profit organization like that compared to a large organization which we often times study. There weren't any big red flags, but we came across things such as not having a required vacation policy, looking at the petty cash funds or controlling credit cards which are significant for a smaller organization.”
Lawrence reiterated those concerns in terms of the risk small entities are under when they don’t have the ability to audit or knowledge to fully segregate all of their own activities.
“Fraud is, unfortunately, way too common in small organizations,” Lawrence said, “and when you’re dealing with a small non-profit, fraud can threaten their very existence. Our students are giving back to the community by helping these small groups that can’t afford to have a full audit, and the students learn a lot in the process.”