Acknowledgements: The authors are indebted to Elaine Mauldin, two anonymous reviewers, and participants at the 2007 AAA IS Section Midyear Conference for helpful comments on an earlier version of the simulation. Note to UWCISA participants: The teaching notes with a suggested solution and Access databases with queries are available from the first author. Auditing System Development: Constructing the Meaning of “Systematic and Rational ” in the Context of Legacy Code Migration for Vendor Incentives Abstract: This simulation affords an opportunity for learning to audit system development for an accounting application. The simulation responds to the growing emphasis on controlling system development for complying with the internal control assurance requirements of Section 404 of the Sarbanes-Oxley Act of 2002. Because of the lack of detailed accounting standards for vendor incentives, learners have to construct a working definition of “systematic and rational” allocation of incentives in order to develop audit objectives and procedures. In the simulation, learners (1) develop objectives for auditing the specific project of migration of legacy code for vendor incentives and the system development for a group of projects, (2) design audit procedures to achieve the audit objectives, (3) execute the audit procedures by querying the