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Audit Quality and Agency Cost
Since the advent of industrialization, there has been the presence of a bond between the people who invest and the people who manage those investments, forming a vital relationship amongst the two groups. Although with the rise of such relationships, the soaring issues of trust and confidence have been a hindrance in economic growth. Viewing the high percentage of the capital of investors or shareholders in companies being utilized to cover the costs of bearing these barriers, it is clear that the audits are being considered a necessity in the business model for the shareholders so that they are assured that their investments are secure and are ensured that they are being properly rewarded in return.
The fundamental purpose of audits has been to reinforce trust and promote confidence in the financial information that the management publishes for the shareholders. Bearing this in mind, it…… [Read More]
Audit planning is the first step in establishing the basis of the nature, timing, and extent of the overall audit strategy to determine the validity of the financial statements. An efficient and effective audit plan provides for a thoroughly and properly planned audit (The Importance of Audit Planning). It helps to reduce audit risk to a low level. Audit planning ensures appropriate attention to critical areas and that potential problems are identified on a timely basis.
Determine Acceptance of Engagement
Request permission from Keystone Computers & Networks, Inc. (KCN) for authorization to inquire with Adams, arnes, & Co. And for consent to reviews Adams, arnes, & Co. working papers for current year and prior year audits (AU Section 315).
Inquire for specific and reasonable information.
Information that might bear the integrity of management.
Disagreements with management concerning principles, procedures, and significant matters.
Communications to audit committees or others with equivalent…… [Read More]
The most notable include:
The inability to account for risks from customers with poor credit.
The way sales are recorded with the income booked once the transaction is closed (versus when the income is received).
Preparing for sudden shifts in the economy or from competitors.
The substantive test is when we are determining if the current strategy will be effective in addressing the risks facing the firm. This is accomplished through examining the accounts receivables.
The substantive tests for KCN revealed that there are a number of risks to the balance sheet to include:
The use of allowances for bad debts.
The combination of these factors can cause the firm to face more risks. The best way that this can be addressed is through the test of balances. This is when the transaction must be posted in the ledger and balance sheet simultaneously. (Srivastava, 2008, pp.…… [Read More]
Audit Quality and Agency Theory
Auditors have existed since the 1300's and for most of that time, their role remained the same. Auditors were the life-line of governments and businesses, helping establishments maximize profit and efficiency, the benefits of which were enjoyed by everyone. As time passed, auditors were given new roles and worked routinely to assure the maximum profit of the company that employed them.
In the past 50 years, however, a tension arose between the role of the modern auditor and their employer. This tension, known as the agency theory and audit risk concept led initially to much criticism of the role of auditors in the business world. This role was further complicated as companies began giving company share incentives to their auditors to produce desirable reports. The primary case example for this abuse of accounting is the Enron case, in which the company intentionally ignored their internal…… [Read More]
3. The widening of the audit functions to include other elements outside employee hours, especially safety conditions within the workplace.
4. The decentralization of the control processes in the meaning of data collection and processing at the individual level of each of the three plants. This strategy would insure that the results are relevant and applicable in the context of the uniqueness of each plant.
5. The simplification of the control processes with the direct impact of decreased workloads for the personnel team and a sustainable increase in operational efficiency.
Question B: Internal control relevant for audit process
The organizational audit encompasses the totality of controls to ensure that the company is operating within the legally imposed standards. The first step in this assessment is represented by the internal control, which is conducted by parties internal to the organization and who will focus on a multitude of elements considered of…… [Read More]
Inadequate ecords: The auditors found that the Commission did not have sufficient records about the evnt fees due from promoters. The lack of documentation prevented the verification of correct amount payable by certain promoters on account of broadcasting rights. To rectify the shortcoming, the report recommends establishment of procedure to ensure prompt deposit of contracts for broadcasting rights etc.
Improper Use of Outside Bank Accounts
The Commission improperly used its outside bank account to deposit unauthorized revenue to pay employee overtime and inspector fees totaling $2,100. These expenditures should have been recorded in the Commission's budget account as the outside bank account is supposed to be used for payments to "licensed officials" such as referees, judges, timekeepers and ringside physicians rather than the Commission employees. The Commission also assessed some promoters for inspector fees and staff overtime despite being not authorized to do so.
The report recommends that promoters should…… [Read More]
This suspicion seems to have become more prevalent in the wake of the collapse of the dot-com sector and Enron. Long-term investors polled about earnings accuracy for companies in 1990 and 2000 indicated that trust in the audit process had slightly eroded, while 34.1% of respondents said auditors had become less independent over that period (Hodge 42, 45). This, in turn, contributed to the generalized crisis of confidence that accelerated the equity market's declines in the summer of 2002 (amirez 68) and eventually drove the adoption of the Sarbanes-Oxley regulatory environment.
So far, investors seem to have regained their trust in financial reporting; the recent market decline was motivated more by a crisis of confidence in the credit rating industry and a shift in the overall economy than by any focused concern that earnings had been systematically misstated. Still, trust takes work and time to repair, and investors' memories are…… [Read More]
The management team is literally flying in the dark with no compass, altimeter, or method of navigating just how they are doing, which strategies are working or not, and what corrective action to take to improve. This lack of measurement is exacerbated by the cultural differences between guests, who may be from international locations. With no method in place for capturing the variation in expectations vs. experiences, the management team running the ocks esort Hotel is completely oblivious to how they are also being perceived by foreign guests as well.
From an International HM standpoint, the lack of measurement with regard to service efficiency, customer satisfaction by nationality visiting the resort, and areas needing the most improvement all underscore the need for a new governance model to unify all the changes necessary to ensure the success of the Thailand venture. The PCH management team needs to consider implementing a Lean…… [Read More]
The internal audit process is a complex system that can be managed in a variety of ways. Many organizations prefer to exercise a hierarchical structure, whereby managers at the top level are the only persons authorized to make decisions on behalf of the organization. Since the business arena has transformed itself within a complex global environment, hierarchical organizations are no longer able to accommodate the demands of business needs and competitive pressures. As a result, firms must evaluate and often reorganize their management structures to satisfy customer and market needs. The following will provide a discussion of the consultant's role in identifying potential opportunities for internal audit departments in order to meet ever-changing environmental, economic, and market needs.
The roles that internal auditors play in complex organizations have changed in recent years in light of economic turmoil and technological advancements. In addition, the organizational environment…… [Read More]
People in the company were not attentive to the amount of loans that were delinquent, who should be allowed to borrow, and how many people were making deposits. Banks like these do not realize the amount of loss they can create without properly regulating anything.
Regulation and constant updates on company or, in this case, bank spending is crucial in understanding how much the financial institution has in reserve. hat also must be taken into consideration is how much money is flowing out. HBO has most likely a lot of money going out in the form of large salaries or pensions as well as missed payments. If more communication took place to warn HBO of impending loss from missed payments or too high pay scales, perhaps they would have known just how much money would be needed when they gained losses.
Provisions are hard to determine and entail a lot…… [Read More]
Qantas isk Factors
Qantas Case Study
isk Factor Identification
Some of the risk factors for Qantas are general and specific to the airline industry more than they are specific to Qantas, but yet should be mentioned anyway. Other risk factors are things that Qantas in particular is enduring and are not something endemic to the industry as a whole, at least not at this time. The different risks, both specific to Qantas and more general in nature often cause or otherwise feed each other but will each be mentioned in their own section as they all stand in their own right to at least some extent if not significantly.
isk Factor I -- General Transparency
The first risk factor that Qantas needs to be very wary of, and this is specific to all publicly traded and operating industries, would be general corporate transparency and visibility of operations. This factor is…… [Read More]
Best Practice/Making Improvements
A clinical audit is an integral part of the healthcare system. Ferris (2002) defined linical Audit as the comparison of the actual clinical practice against the agreed and documented evidence-based standards in an effort of improving the level of patient care as cited in AGW and Daly (2008,p.4).
Importance of linical Audit
There are several reasons as to why a clinical audit is crucial in clinical practice. The main reason is that it is important in improving the quality of health care service that is offered to patients and the general community. The absence of a clinical audit would make it extremely difficult to gauge if one is practicing effectively. A demonstration of one's performance is also made difficult. The benefits of clinical audit are;
Its importance in the identification as well as demonstration of good practice that can lead to the improvement on the level of…… [Read More]
KPMG served as the independent audit firm of several of the largest subprime mortgage lenders. Identify the advantages and disadvantages of a heavy concentration of audit clients in one industry or sub-industry (40marks).
KPMG did indeed serve as the independent audit firm of many of the most massive subprime mortgage lenders in the nation. There are concrete benefits and drawbacks to such strong relationships in on particular field. The most fundamental benefit is that of industry expertise. "A report on the U.S. audit market issued by the U.S. General Accounting Office (GAO) in 2008 also acknowledges the importance of industry expertise, noting that 'a firm with industry expertise may exploit its specialization by developing and marketing audit-related services which are specific to clients in the industry and provide a higher level of assurance" (Minutti-Meza, 2010). Ideally, industry expertise leads to a greater knowledge of details, a higher level of quality…… [Read More]
Internal Audit Can Improve Social Media isk Management in Financial Institutions
Internal audit in social media risk management for financial institutions
In the wake of the competitive financial service industry, the financial institutions are increasingly adopting technological advancements to engage, acquire, attract, and retain customers. The recent developments in the information technology sector are the social media platform, which is growing at a fascinating pace. Institutions, businesses and other organizations continue to invest in exploiting these services. The financial institutions use the social media platforms just as the other business entities use them. This is from the positive impacts the social media platform brings to the success of the institution engaging the media. However, as the other platforms of doing business constitute risks to the institution, the financial institutions are not any safe in the social media platform (Marta, 2006, p. 292). Thus, as the financial institutions continue expanding their…… [Read More]
Care and Diligence and Audit Committee Members
"The duty of due diligence and due care has been defined, generally, as a requirement that each director and officers exercise the care which ordinarily prudent and reasonable persons would exercise under the same circumstances (Duty of Diligence and Due Care)."
The concept of due care and diligence is intended to hold those with a fiduciary responsibility to a standard of care that makes them responsible for knowing what a prudent person might have known. It remains the standard for determining legal duty.
In the financial and legal community, due care and diligence is expected when audit committee members exercise their responsibilities. Audit committees first came into being when the SEC recommended that publicly held companies establish them in 1972. Audit committee roles and responsibilities have since evolved over time. That evolution included the establishment in 1987 of six specific audit committee recommendations…… [Read More]
Apollo Shoes, Inc.
Internal Audit has completed a review of the Apollo Shoes Corporation in conformity with the fiscal year 2005-2006 plan and as advised by the Sarbanes-Oxley federal requirements. The objective of this review was to contribute to the improvement of risk management and the control systems within the Apollo Shoes Company by identifying and evaluating the company's exposures to risks and the controls designed by management to reduce those risks.
The Apollo Shoes Company attempts to distinguish them by focusing on footwear that is connected to extra-galactic exploration. Combining technological advances in light and sound, Apollo Shoes has fashioned rugged footwear to enable galactic sports participants to realize their fullest potential.
Apollo Shoes also streamlines original footwear two of which have been particularly successful: Spotlight for athletes who compete at night, and Siren for police who work graveyard shifts in notorious districts.
A leader in innovative design and…… [Read More]
Financial Audit SOW
Financial Audit Statement of Work
The objectives of this work order is for the contractor to express an opinion on the fairness in which the financial statements are fairly presented, in all material aspects, financial position, results of operations, and cash flows in conformity with generally accepted accounting principles (Arens, 2006).
P.1.1. The requirements of this work order include testing of internal controls, examining the accuracy of the financial statements, examining whether financial statements are in compliance with GAAP and SOX regulations, as well as examining whether the business is capable of "going concern" quality.
The testing of internal controls should include examining company policies, human resource records, and testing the information system, more especially in the area of bookkeeping, for the quality of internal control to examine the adequacy and risks associated with the internal controls (Codjia). The emphasis should be on rules when employees record…… [Read More]
Company audit occurs when there is need to examine the performance of a big company especially the financial and the accounting records over a given period of time. Professionals such as the certified public accountant always do the auditing. The audit of a company is significant in the verification of accuracy particularly in the accounting records. A company like coca cola will need an audit to help in verifying their financial records because of the large market they are serving. Coca Cola Company is undeniably the world's largest distributor when it comes to beverages, majorly used as refreshment by the consumers. The company enjoys a larger number of distribution countries and in the number of consumers using their products. This paper gives the audit about the coca cola company. In auditing the company, there is need to study some of the agreement that the company had engaged itself in.
The…… [Read More]
Admiralty may be pressured to raise funds and misstate financial information to soothe investors and attract new investors. The risk of misstatements to the financial reports in light of reduced financing due to the global recession may hit Admiralty if their fundamentals were not in order to begin with, hence pressuring the company to alter their financials to appear in a growth position when they might not actually be so.
To: Partner X, Auditor
From: Partner Y, Auditor
Re: Inherent Risks to the Financial Report Audit for Admiralty Resources NL.
This memo is to discuss some specific areas of risk to the Audit Plan for Admiralty Resources NL. Admiralty Resources is a global diversified mining company, with primary operations in South America (Chile and Argentina) and Australia. They mine and explore for iron ore, nickel, zinc, and cobalt. Admiralty owns three subsidiaries directly involved in the mining process, with…… [Read More]
One of the most significant disadvantages, and potentially dangerous aspects, to outsourcing is the transfer of sensitive data, according to Klosek.
Auditing outsourcers may subcontract their services, unless it is specifically stated in the contract that they cannot do so without the organization's consent. If subcontracting does occur, and is not provided for in the contract, the outsourcer may not be liable for functions that were subcontracted.
However, just as financial scandals such as Enron and orldCom have highlighted the importance of having the absolute highest quality of internal audit performed, in order to safeguard the interests of stakeholders, these scandals also have provided evidence that outsourcing this critical function may not be the best move, for an organization.
Smith sees Enron as proof positive that the outsourcing of internal audit services is not in the best interest of the organization.
Enron's services as external auditor, outsourcer of internal auditing,…… [Read More]
Their satisfaction is the only true test of the effectiveness of the organization and its staff. ut unless these needs and preferences are promptly and adequately communicated to the right recipients, the objective cannot be achieved. The head of clinical audit must posses this attribute because he must be able to transmit the goals of his section clearly to those under it, those above it and those with which it functions or deals.
Leadership Strategy of Personal Vision leader who is highly attuned to himself and his personal vision and the greater world will be most effective (McKee 2006). Unprecedented global change, pressure from all directions, and ever-increasing competition in the field require personal vision in a leader. Today's leader is not just an effective worker who works harder. He must now create powerful, positive relationships and healthy organizational environments, which will establish optimism, innovation and team work, necessary in…… [Read More]
Auditing, Monitoring, Intrusion Prevention, Detection, and Penetration Testing
The network vulnerability is a major security weakness that allows an attacker reducing computer information assurance. Vulnerability intersects three elements: a system flaw, the attacker is having access to the flaw, and ability to exploit the flaw. Thus, a security risk is classified as a vulnerability that is tied to a great significant loss. The vulnerability can erode data confidential, system integrity and availability of data.
The objective of this study is to carry out analysis of two research articles that discusses the network vulnerabilities in the IT environment. (Jackson, et al.2008, Sommer, et al. 2003). Both articles believe that attackers exploit the network vulnerabilities to inflict damages in the information systems. Moreover, the two articles agree that the traditional securities such as network IDS (intrusion detection system) (Sommer, et al. 2003) and DNS pinning (Jackson, et al.2008) are no more effective…… [Read More]
In the field of nursing, both qualitative and quantitative data are useful and needed. The qualitative approach comes much from the patient and/or stakeholders. How does the patient "feel," what are some not quantittiative things one notices. Often, though, in charting a patient, a medical professional is able to quantify some of the qualitative data (e.g. complexion pale or wan; skin temperature, palor, attention span, etc.). The quantitative data are data that can be easily measured and work in tandem to provide a way to make a cogent diagnosis for the patient. Qualitative data is also part of the nurse's ability to make judgments about the quality and morality of situations, indeed, taking the principles of nursing ethics (beneficence, autonomy, etc.), many of those decision types are qualitative based. Some of this is, of course, related to secondary data sets from other research studies outside the purvue of patient-care,…… [Read More]
Audit Planning Control
The American Institute of CPAs (AICPA) has published guidelines for preparing an audit plan. The first step is the preliminary engagement activities, which is focused on establishing an understanding of the terms of engagement for the audit. The steps in the planning process are to identify the scope of the audit; to determine the reporting objectives; to consider the results of the preliminary engagement and to determine the resources that are going to be required to conduct the audit -- and the timing of when those resources will be needed (AICPA, 2015).
To audit Home Depot, it is important first to determine what the scope will be, as this will help to determine the resource requirements. A preliminary meeting with the company will help to determine this -- for example is it necessary to visit stores? Conduct inventory? Talk to Canadian HQ? Or is a visit to…… [Read More]
financial condition of a hypothetical town; Swobodaville. The paper analyzes the town's revenue structure, and expenditure profile among others. In addition, paper outlines how public organizations within this town use data from audits and assessments to increase their effectiveness.
There are several factors that are likely to influence the town's revenue structure. These factors are economic growth, taxations among others. The town has taxation waivers which may have led the increase in revenues from the first to the fifth year. There is a likelihood that the town has been having an increasing revenue base which has led to the increase in revenues. The level of government spending has steadily risen. The increase in government spending on state-provided goods and services including public and merit goods is likely to result in increased revenues for the town's households (Kirchler, 2007). Besides, incorporating revenue neutral individual income tax change that integrates…… [Read More]
eal Good Food company lost money in 2014, in comparison with turning a profit in 2013. One of the red flags that an auditor should look for is when a company records better performance -- there is little incentive to be gained from losing money. The gross margin in 2014 was 12.2% and in 2013 it was 14%. Because the company lost money, it did not pay the same rate of tax as when it made money, but that should not be the biggest red flag in the world -- again, losing money is not usually considered to be desirable.
The company noted an increase in inventories, from ?15 million to ?19.1 million. Thus, the inventory turnover went from 17.7 times to 14.2 times. Trade payables were ?21.28 million in 2013, but ?29.82 million in 2014. This is a significant increase, much larger than the increase in revenue that the…… [Read More]
Areas of Heightened Audit isk
Audit risk = Inherent risk x Control risk x Detection risk. Audit risk can be referred to as the probability that an audit team will give an outright and absolute judgment when the financial statements of an institution are in actual fact materially misstated. To start with, inherent risk is the possibility that material frauds and errors will get into the accounting system employed to cultivate and improve the financial statements. On the other hand, control risk is the possibility that the internal control system of a client or company is not able to prevent or detect material misstatements (Griffiths, 2005). Lastly, detection risk is the probability that an auditor's audit procedures will not able to detect material misstatements. Taking into consideration the financial statements and the management commentary in the annual report of Havelock Europa there are a number of areas of…… [Read More]
Auditing, Monitoring, Intrusion Prevention, Intrusion Detection, and Penetration Testing
"Unlike IP fragmentation (which can be done by intermediate devices), IP reassembly can be done only at the final destination. What problems do you see if IP reassembly is attempted in intermediate devices like routers?" [ ]
IP fragmentation is defined as the IP (Internet Protocol) that breaks datagrams into smaller fragment to assist packets passing through links and forming a smaller MTU (maximum transmission unit) than its original size. However, the fragments reassemble themselves when reaching the receiving hosts. After the receiving hosts have received the fragmented IP packet, they have to reassemble the datagram before passing it to the higher layer. In practices, the reassembly happens in the receiving hosts, however, a reassembly may be carried out by the intermediate router. For example, the NAT (network address translation) is designed to reassemble the fragments to the translate data streams.…… [Read More]
The information that an auditor gathers as he runs analytical procedures in an entity he is auditing and as he gets better acquainted with the organization must be enough in determining materiality and assessing risks. Materiality is very important especially in helping the auditor determine what kind of audit report to be given. The auditor has to make reference to two key issues as regards what areas the financial audit covered. This helps in highlighting risk and materiality. These issues are: the limitation of the liability of the auditor to the significant information given to him and established by him by way of the materiality parameters he has established given his professional capacity and reasoning and his supplying an assurance that is not absolute but reasonable as pertaining to the financial statements' accuracy. The materiality is relative. A given figure or value may be viewed as material in…… [Read More]
S. through even 2009. The exponential growth of Indian outsourcing companies who have expertise in Business Process Management (BPM) have correspondingly seen an increase in their business, as many smaller American publicly-held companies do not have the people or the expertise to get their processes, systems, it plans and accounting and reporting functions in compliance to the SOX standard in any meaningful period of time (adtke, et.al.) as a result many accounting professionals also must manage outsourcing contracts with companies who specialize in BPM and SOX process-redefinition. Finally there is also more concentration on oversight at the corporate level, with companies including Boeing having a Chief Compliance Officer who reports directly to the CEO to ensure GC Initiatives gain the necessary resources to be effective. Accounting and auditing will continue to be significantly influenced by SOX for the foreseeable future as the need for compliance grows.
The accounting and…… [Read More]
We are living in times of continuous change that thrives on information. Information is the cornerstone of the financial construct of organizations. Information and access thereto drives the success of organizations in present times. The way the external world receives the statements of organizations is causal to its perception by individuals and institutions in evaluating it. As such, it is imperative that the architects and designers of this vital information need to pursue diligently highest levels of moral, ethical, and professional standards in preparing it. In providing for the financial and economical framework for such information, services of auditors are simply indispensable. The audited reports of an organization is the basis on which the organization makes its statement of intent public and helps aid the process of decision making and perception about it in the capital and investment markets (Franca & Maria, n.d.).
IMPORTANCE OF MATERIALITY IN AUDITING
"Audire"…… [Read More]
Auditing; Topic: Materiality in Auditing
With respect to the field of auditing, materiality is a critically important concept addressing the significance of discrepancies, amounts, and transactions. Specific materiality guidelines are required in accounting practices to avoid judgmental (legal) decisions. Materiality is applied for most, if not all, economic decisions, and the topic of materiality is not a new issue. Disclosures in re financial statements have been emphasized by courts in the United Kingdom since the 1800's, whereas materiality initially rose to importance in the United States following 1933's Security act. The significance of the materiality concept and its implications are pertinent to business decisions, as well as for analysis and preparation of financial statements and in order to apply GAAP, generally accepted accounting principles.
For the accounting field, as well as for all fields of management, the concept of materiality is central to decision making. If something is considered to…… [Read More]
Sarbanes-Oxley act on auditing
Changes as a result of the 2002 Sarbanes-Oxley law
In the wake of numerous corporate accounting scandals, several of which involved the famed and trusted accounting firm of Arthur Anderson, the U.S. Congress instituted the 2002 Sarbanes-Oxley Act (SOA). The Act was designed to reduce the likelihood of "cooked books, exorbitant [undisclosed] salaries and loans to CEOs, conflicts of interest by auditors, and hyped-up stock reports by securities analysts at some of America's highest-flying companies and investment firms" (Has Sarbanes-Oxley made a dent in corporate America's armor, 2004, Knowledge @Wharton). One of the reforms of SOA was to demand "significantly higher responsibility from audit committees of publicly traded companies" while amending the Securities Exchange Act of 1934 "to make the audit committee of a reporting company an important participant in the financial reporting process of the company" (Pandit, Subrahmanyam, & Conway 2005). Audit committees have been…… [Read More]
(the Company) to the Loan Agreement with Western Financial Services (the Lender). For the purpose of providing you with this letter, other than as set out herein, we have carried out the audit and review of the Company's financial information
Based solely on the procedures set out in the engagement letter dated October 9, 20X5 (see Attachment 1) we confirm that the Company is in compliance with all of its restrictive debt covenants with the Lender.
Our report as set out herein is confidential to the addressees of this letter and should not be made available to any other party without our written consent.
Partner cc Chairman of the Board of Directors, Keystone Computers & Networks, Inc.
From Warren Love
Date November 14, 20X5
Subject Keystone Computers & Networks, Inc.
Revenue recognition - Accounting for the sale of extended warranty…… [Read More]
Auditing Apollo Shoes
Inventory and Warehousing: Test of Controls
Testing the controls that exist in the inventorying and warehousing processes at Apollo Shoes consists of the auditor ensuring that the existing controls actually measure what they set out to measure, and that these measurements reflect that actual movement of goods and materials through the various parts of the business (Arens et al. 2008). Certain processes, such as the means by which inventory is checked in and out of various stations in the business, must also be examined (Arens et al. 2008). Ensuring that these practices are able to influence physical movements of materials and goods is key to the audit process.
Inventory and Warehousing: Test of Transaction
In order to test the transaction that exist in Apollo Shoe's inventory and warehousing processes, the specific physical and record-keeping details of the company must be determined by the auditor. A…… [Read More]
On the other hand, Enormo Corp is a big client for CPA, and exposing its case to authorities, would mean losing it.
As an alternative, CPA can refuse to work with Enormo Corp in this case and Enormo would be forced to resort to a different auditing company.
3. ecommended course of action. CPA has the right to handle this situation with the client, while trying to continue to have a professional relationship in the future. So, the suggested course of action would be to address the issue to a higher authority, start documenting it and explain to the client the implication of such documentation. The auditing firm also has the right to protect its integrity, so in this case it is essential to document the findings. However, since there is no rule that forces the auditor to report such discrepancy, the auditor will chose to restrict its actions to…… [Read More]
Once this has happened, the auditor is in a position to assess the risk of material misstatement in the financial statements. The auditor should consider, for example, management's selection and application of accounting principles in assessing the risk of fraud. Some red flags identified in the alert are when the transaction is overly complex; whether or not management has discussed the accounting of such transactions; if management is placing undue emphasis on accounting treatment of a transaction; if transactions involve third parties, including special purpose entities; and if the transactions do not have sufficient substance.
The alert prescribes a course of action for situations when an auditor believes that there is a significant risk of material misstatement. The auditor must identify his or her findings in an engagement completion document; document actions taken to address significant unusual transactions and must state the basis for the conclusions reached.
In the Lehman…… [Read More]
hythm on the Vine is a concert series that is run on a charity basis by the Shriner's Hospitals for Children. hythm is a concert series and the size of the events is growing rapidly, so there is a need for the Shriners to implement proper procedures for financial management and cash handling at these events. Members of the public pay for their tickets with credit cards or online, but there are some ticket purchases at the events, and in some instances there are cash purchases of food and beverages available. There are several different ticketing tiers, with the highest level of sponsorship at $5,000 and lower levels down to $35 tickets at the picnic area. The picnic area generates cash sales of food and beverages in particular, as many picnic guests rely on ad hoc food purchases. In addition to ticket sales, there are silent auctions as well.
There…… [Read More]
External Corporate Communications Audit
Demonstrate how you would conduct an external corporate communications audit
An external corporate communications audit is a critical undertaking that must be carried out in every organization. Auditing processes are common when it comes to the realization of the basic avenues of growth and development in organizations. In order to realize the best fruits of service from the department of communication, the channels of communication should have to be renewable or accessible for audit. The first section will be used for major auditing activities. The second avenue of the auditing process will involve the personnel that have been put in place as a measure of oversight between the channels of communication, communication processes, and the major pillars of communication within a corporation. Furthermore, it is important to realize the importance of having a sound truth and recognition avenue where the auditing processes are to be executed…… [Read More]
egulatory and Compliance
Auditors, consultants and security professional owe to their clients stakeholders a duty of care in the performance of their duties. The duty of care requires these professionals to observe prudence in all circumstances regarding their actions and evaluations (Boynton & Johnson, 2006).
Contribution of the PCAOB towards Independence of Auditors of Public Companies
It is sometimes ignored the contributions made by PCAOB towards improving corporate governance in public companies by generating better focus upon accounting and audit practices. A series of failures in the various functions of a public corporation to protect the investing interest of public corporations contributed the creation and enactment of Sarbanes-Oxley Act (SOX). Despite there being criticisms against the effects of PCAOB the board has contributed towards a higher degree of professionalism on public corporation auditors. An Important contribution of the board towards this independence is through the assertion that the audit companies…… [Read More]
S. Navy has an excellent product mix as they are working to attract, recruit and retain key members of each position segment they have. The recruitment of the most highly skilled areas including nurses and physicians is the most pressing and requires the greatest level of consultation and one-on-one recruiting effort. The recruitment of Naval physicians is a critical need; it's clear from its position on the website and often there are face-to-face discussions and recruitment efforts on the part of the U.S. Navy to gain physicians directly into their branch of the service.
How is the product (good and/or service) of the organization you are auditing, currently distributed?
The U.S. Navy distributes it current set of recruitment offices throughout 26 American cities, which are accessible from the following Website: http://www.cnrc.navy.mil/.The focus of each of the 26 city sites is on tailoring the recruitment process to regionalized needs…… [Read More]
A market research plan is the systematic study that deals with the gathering and analysis of the concerned data to assess the role of a certain company in the market and persuade the customers to by their products. Marketing research assist the companies to design better strategies for future with respect to customer behavior (Pickett, 2010).
Marketing audit: It is a systematic and comprehensive evaluation of a company's activities and the results achieved due to its capabilities .In order to carry out marketing research one must understand the role of marketing audit in research.
PUPOSE OF THE AUDIT (Wal-Mart)
Marketing audit is necessary because the Wal-Mart has to compare its performance with the constantly changing market environment. There are certain micro and macro environmental factors that affect the business and marketing operations of the retail business of Wal-Mart largely. A detailed description of them is as under:
Microenvironment:…… [Read More]
US General Accounting Office & National State Auditors Association. "Management Planning Guide for Information Systems Security Auditing." Issued 10 December 2011. Retrieved from http://www.gao.gov/special.pubs/managementpln.pdf
his source is a useful reference that can help determine the history and background of I security and federal government regulation. his report is the first of its kind and can help provide deep background information on the topic at hand.
Spremic, M., Ivanov, M., Jackovic, B. (2012). I Governance and information system auditing practice in credit institutions in the Republic of Croatia. International Journal of Applied Mathematics and Informatics, 2(6), 2012: 101,109. Retrieved from http://naun.org/multimedia/UPress/ami/16-201.pdf
his source provides a study to base the effectiveness of I governance. Despite a question of relevance due to the geographical location of the study, the information still holds value because of the questions the article essentially asked. he study focused on financial institutions performance and actions and their reliance…… [Read More]
International Accounting and Auditing Standards
International public sector accounting standards (IPSAS) are developed and put forth by the International Public Sector Accounting Standards Board of the International Federation of Accountants (IFAC). International private sector accounting standards are known as International Financial Reporting Standards (IFRS). They are put together and put forth by the International Accounting Standards Board (IASB), a self-governing standard generating body of the International Accounting Standards Committee Foundation. The IFRS for SME's is a self enclosed standard, intended to meet the requirements and abilities of small and medium-sized entities (SME's), which are anticipated to comprise over ninety five per cent of all corporations worldwide. It is constructed on the basis of full IFRSs, yet, a lot of the principles for distinguishing and gauging assets, liabilities, earnings and expenses have been cut down, subjects not relevant to SME's have been left out, and the amount of necessary revelations…… [Read More]
Change Management Audit
While technology and information systems are there in order to make management much more efficient, these systems may also expose an organizations to various risks which might often be serious in nature. These risks increase when changes are brought about in an existing system. In order to minimize such risks it is important that organizations have a change management plan, which is duly audited and tested for compliance before change is implemented.
With the advent and progress in the field of Information Technology, the corporate sector across the globe has increased the incorporation of technology in business practices greatly over the years. Besides assisting in communication and production related tasks, Management Information Systems and knowledge managements are important and integral part of organizational management that play a vital role in ensuring efficiency and quality management. That said, the rapid progressions in technology mean that the preceding technologies…… [Read More]
Maybelline positions itself as the most innovative make up producer. The company has strengthened its position on the international market due to the sales force ensured by L'Oreal, who acquired Maybelline. stor positions itself as a high quality make up producer.
The main customer segment is represented by women aged between 20 and 35 years old. These customers have a medium income and medium to high education. They have a modern lifestyle, and are interested in the life of celebrities they admire. They are interested in fashion, and in cosmetics products that present new characteristics. They are oriented towards make up products of higher quality, but have an average budget.
nother customer segment addressed by Rimmel London is represented by teenagers that are interested in make up products that provide a satisfactory relationship between price and quality.
The company's marketing strategy is based on providing good quality…… [Read More]
The Accounting and Auditing Enforcement Release (AER) for this proceeding is no. 3288 June, 2011. In this case there was a violation of Section 10A of the exchange Act by L&H, Howley and ood 2005 & 2006-year-end audit, in addition this proceeding also discussed the year-end audits and quarterly interim reviews of the financial statements of Locate Plus Holdings Corporation ("Locate Plus") (Collectively "the Engagements"). Howley served as the Engagement Partner and ood served as the Concurring Partner on the Engagements. The complaint alleges that, as part of Locate Plus' fraud, its CEO and CFO created a fictitious customer called Omni Data Services, Inc. ("Omni Data") and that Locate Plus then improperly recognized revenue from Omni Data. The improper Omni Data revenue was included in Locate Plus' financial statements that were part of quarterly and annual reports for fiscal years 2005 and 2006 and were included in filings with…… [Read More]
Cultural Audit of St. Cloud State University: HR Analysis and Critique
To address the deficits highlighted the cultural audit, St. Cloud University has resolved to address issues of demographic isolation, namely the sense of students that they do not have a 'connection' to the university, and the persistent problems regarding minority tensions and institutional discrimination. Perhaps the most telling survey comment came from a student, criticizing the survey structure: "I think that this survey was bogus. I can't believe you wasted $50,000 on this thing. e already know that SCSU is a hub of institutional racism" as noted in the Qualitative Analysis Section of the report. Another telling detail was that some faculty, administration and staff felt there was a notable lack of African-American and Jewish faculty members on campus, and that some felt the presence of a 'glass ceiling" regarding promotions of women. Also, disability services were perceived as…… [Read More]
Strategic Audit Format
Strategic Audit Areas
History, Development, Issues
Milestones (Identify minimum four milestones (events)
Past Issues/problems that the industry faced (Four to five issues)
Current Industry Issues (Minimum three issues)
History, development, problems
Milestones (Minimum four milestones (events)
Current Company Problems (Minimum three internal or external problems)
Present strategic posture
In the following sub-sections (a, b, c, and d), analyze the current vision/mission/goals/objectives/STRATEGIES / structure & culture of the firm
- The vision is to be a leading IT company that grows and meets customer demands on all related IT accessories including desktops, servers, computer peripherals, computer storage and various IT accessories.
The Mission of Dell as it is information technology company is provide the newest technology to create full customer satisfaction with effective cost.
- The focus of Dell INC has always been to be a leader in computer accessories and…… [Read More]
SAS Number 99 and the Corporate Audit
This report attempts to explain how the new SAS No.99 will change the way accounting firms will be required to conduct corporate audits. News about the collapse of Enron continues to dominate the American media circuits and in the wake of the now infamous Enron accounting scandal, accounting firms will be required to pay more attention then ever. Since the recent American Institute of Certified Public Accounts issue of SAS 99, the approach of auditors in the United States will for ever more be greatly enhanced. ith SAS 99 for example, external auditors will be required to discuss and gather facts with internal auditors. As of SAS 99, corporate America will now be required to monitor and share the findings of internal auditors who may be privy to critical fraud-related data residing with their clients. SAS 99 will therefore provide new opportunities for…… [Read More]
Network Audit Case Study
This study focuses on a comprehensive list of top ten tips of network and business continuity audit. These tips might lead businesses to survive and thrive in their audits without the need to overhaul their entire infrastructure.
Top ten network and business continuity-auditing tips
Segmentation of tasks distinctively: It depends on the principle of drive and conquers. It involves brainstorming about the organization's security tasks in terms of pieces and separating them into logically and physically segments. For instance, security tasks depend on ensuring people are kept on the outside by using both physical and firewall security (Bergmann & Pamplin, 2013). However, other components are safely kept on the inside using antivirus. Security does not solely imply that people should be kept from the outside. Obviously, companies have lost information from within the business. In this case, each piece must be documented and prioritized.
Documenting all…… [Read More]
Accounting and Audit Enforcement
1. The Sarbanes-Oxley Act applies to publicly-traded companies. Thus, it does not apply to non-profit entities. Nor does it apply to for-profit entities that are not publicly-traded. This is because SOX was passed specifically to address instances of accounting fraud in publicly traded companies that were undermining consumer trust in the capital markets (101.com, 2018). A publicly traded companies has a variety of different obligations under SOX that will help to reduce the opportunities and incentives for accounting fraud. Both opportunity and incentive are components of the fraud triangle – one needs to have a perceived need to commit the fraud and the circumstances with which to do so (ACFE, 2018).
Non-profit organizations have no obligations under SOX. However, there is a school of thought that holds that non-profit entities can benefit from some of the recommendations and mandates that SOX contains. Fritz (2016) writes that…… [Read More]
Strategic Management and Auditing of a McDonald's Restaurant
Are employees adhering as closely as possible to the operational protocol put in place by McDonald's management?
Which shifts (breakfast, lunch or dinner) are performing at, or above, optimal levels of efficiency, and to what factors can this success be attributed?
Which shifts (breakfast, lunch or dinner) are performing below optimal efficiency, and to what factors can this failure be attributed?
What is the average duration of stay for customers using the drive-thru line, and does this timeframe adhere to managerial dictates?
Can any of the in-kitchen machinery and devices (ovens, fryers, beverage dispensers, etc.) be enhanced to improve efficiency, and if so, how can these improvements be implemented?
Are staffing levels during the midnight-to-morning shift commensurate with the amount of customers typically served during these hours?
Which new products take the longest time to prepare and assemble, and do…… [Read More]
First is that they may be different in the foreign country from the domestic one, which can give rise to implementation complications. The project's timeline and cost could be dramatically altered by differences in environmental factors. Local firms or workers may be involved, creating training costs or potential organizational cultural differences. There could also be cost considerations arising from economic or exchange rate considerations. Environmental factors can be positive, too, as solid understanding of them could allow for advantages that would not be available if the project was domestically-based.
3) it is important to honor the local customs for a few reasons. One is that ultimately your ability to do business in the foreign country is permitted by the government of that country. To offend local custom may jeopardize the entire operation. Also, the project will be implemented more smoothly if you work in line with local customs, rather than…… [Read More]
Management Audit of San Francisco's IT Practices
San Francisco's IT Practices must generate strategic reports capable of setting targets and securing its IT infrastructure. The city must identify assets and determine their importance. The city of San Francisco's IT Practices entails valuable data, which is an asset necessary for production and delivery of services and goods. Such an asset is also relevant in the social and economic activity of the city and welfare of citizens. Assets refer to IT equipment, information, operations, and facilities.
The loss of such assets reduces the city's competitive advantage. This arises from the financial expenses incurred and the loss of a technological advantage or unique knowledge of information. It would be difficult to reproduce or replace such an advantage. The city must worry about the loss of its reputation. In order to characterize, identify, and evaluate a threat, it can obtain relevant data from news…… [Read More]
Strategic Audit a Corporation1 I. Current Situation A. Current Performance How corporation perform past year terms return investment, market share profitability? B.
Nestle's performance Audit Report
Performance of Nestle in the year 2011
In the developed world the corporation faced economic frailty and uncertainty more so in the developed world. The economic down turns in the developed world economies had a significant impact on the performance of the product in the market which set in new challenges. Key to remaining afloat with all this challenges at Nestle is to focus on delivery of both short-term performance result and considering investing along the long-term profitability and sustainable lines Nestle The World's Leading Nutrition, Health and Wellness Company 32()
On top of the normal growth Nestle corporation experienced organic growths of up to 7.5%. Real internal growth was recorded at 3.9% while growth in pricing stood at 3.6% Nestle The…… [Read More]
marketing audit SWOT analysis, summarized a list key issues addressed marketing operation
Windfall Dancers Inc. Marketing esearch
Windfall Dancers Inc. is committed to its dancers and to ensuring high levels of performance. The company is nevertheless administered in a relatively artistic way, without important emphasis on the business feature. In other words, despite the emphasis on quality services, Windfall Dancers must also focus on being marketable. In essence, it has to be place more emphasis on the marketing dimension of the service and to place and promote the company in such a manner that it generates customer demands, and as such sustainable revenue.
In order to attain this objective, it is first necessary to devise a process of market research which addresses the various dimensions of the current organizational problem, namely the failure of the company to adapt to the needs of the modern day consumers, but also to promote…… [Read More]
Personal Social Media Audit
Most used websites
Time of the day using a specific website
The usage of social media depends on the personal interests and priorities. There are various websites, blogs, content communities, and gaming zones categorized as internet-based social media. The users of social media often do not realize their patterns and number of hours spent in using social media. In order to understand the usage information a seven days diary was maintained. The analysis of diary entries provided an in-depth understanding of the situation. The reflection of observations, assessment of the findings and active experimentation is presented below.
Social media comprises of electronic tools, applications, websites, and various community-based blogs that attract the users. The users also utilize their email and contact numbers to share their profile information with contacts. It is also a medium that has…… [Read More]
Managing the Effectiveness of the Audit Process
Mission and Objectives of the International Audit Department
The IAD stakeholder power-interest grid
The Audit Process
Objectives, Scope and Approach of the Research
Purpose and Mandate
Sustaining People Excellence
Tools and Technology
Infrastructure and Operations
Japan Tobacco International (JTI) is an international tobacco business that is operated by Japan Tobacco Inc. Japan Tobacco Inc. is the third largest player in the international tobacco industry with a market capitalization of 32 billion USD and a market share of 11%. JTI was established in the year 1999 when Japan Tobacco Inc. purchased the operations of United States multinational R.J. Reynolds, for 8 billion USD.
The Internal Audit Department (IAD) of the organization is accountable to the board of directors. The department is headed by the Global Internal Audit Vice President. He took his position in…… [Read More]
Clinical Governance and Auditing
Throughout this paper, an attempt has been made to demonstrate an understanding of the procedure of Clinical Audit (CA). The focus of this CA is the high risk area of patient safety, and with regard to how this is linked to patient safety, hand hygiene has been selected. The findings and the recommendations that follow combined with the CA tool and the selection criteria will be outlined in form of a Clinical Audit. For the purposes of improving clinical practice, CAs forms an integral aspect of clinical governance. It is indeed notable that CAs encapsulates practice which through analysis can result to quality enhancement, particularly for the patients. Various definitions of the term which are invariably the same and which tend towards verbosity exist, but a terse and precise definition is given by Coffey (2009) who puts forth that a CA is a systematic evaluation of…… [Read More]