1000+ documents containing “auditing”.
In other words, if the financial difficulties they encounter are the fault of the auditing firm, they will have protection from any legal ramifications they may have encountered from faulty accounting or auditing measures. Preventive measures are also part of the internal controls of the auditing firm itself, so that each person who works with that firm knows the measures that are to be taken to make sure auditing is performed correctly (Cascarino, 2012). The more preventive measures a company has, the more likely that company will be to have good, strong audits that work out acceptably for everyone involved. That may not always be the case, because having preventive measures does not mean that nothing can go wrong. Still, preventive measures typically cost less money and take less time than working to correct a problem after it has already occurred (Cascarino, 2012). Problems can quickly spread, becoming very….
Auditing function has undergone several transformations from the periods when it was simply a function of giving opinion but also to an error where auditors are looked upon to offer advisory roles. The auditors should therefore advice the government on the impacts of their operations on the public and on other improvements that can be made to maximize on the service delivery. In pursuing their taxation policies and fiscal policies, the auditors need to offer appropriate advice to the executive to ensure that the policies improve economic performance and improve the welfare of the society. Government expenses should improve the economic performance and ensure stability in the financial markets. If auditors provide technical advice to the governments, stability and better management will be realized hence improving the welfare of the citizens.
The management of public resources has been flooded by corruption and theft. This calls for need to conduct forensic….
Berto-k, Ja-nos. Public Sector Transparency and Accountability: Making it Happen. Paris: Organisation for Economic Co-operation and Development, 2002. Print.
Bourn, John. Public Sector Auditing: Is it Value for Money? Chichester: John Wiley & Sons, 2007. Print.
Grills, Peter. Internal Audit under Scrutiny: An Examination of Current Overseas Practices. Canberra: A.C.T.: Public Service Commission, 2005. Print.
Kumar, R., and V. Sharma. Auditing: Principles and Practice. New Delhi: Prentice-Hall of India, 2005. Print.
The implementation of this standard will give auditors much more control over the audit process. This gives the auditors the tools they need to meet their responsibilities with respect to professional skepticism. Auditors are responsible for the quality of the financial statements, and this standard gives them the mandate to be sufficiently creative in the audit design so as to detect misstatement.
The change benefits experienced auditors in particular, and places the onus on inexperienced auditors to learn quickly how to assess risk. Improper assessment of the risk of misstatement will result in poorly designed audits and therefore increased risk of misstatements passing through the audit. Experienced auditors will be better able to design audits that detect misstatement because they will better understand the risks. For companies, this additional degree of empowerment to the auditors will place addition risk on the company in the even of misstatement. With the auditor….
IV. MIXED ECONOMY
The work of Nicoll (2005) relates that the economy of Australia is one that is mixed "with separate audit legislation for the public and private sectors." The Auditor-General audits both private and public entities although there is separate legislation relating to their operation and establishment. There are however, different requirements of public and private sector auditing in that due to the legislative requirements of the Auditor-General to:
1) Conduct performance of audits of particular kinds of government agencies and report findings to Government and Parliament; and 2) Report to Parliament on any matter. (Nicoll, 2005)
Internal controls that are required by auditors include:
1) a senior executive group, which meets on a regular basis;
2) an audit committee;
3) an effective internal audit function;
4) a current corporate plan, business risk assessment and management plan and fraud control plan;
5) Clearly specified systems of authorization, recording and procedures;
6) Sound organizational business practices;
Auditing Standard ASA 200 (2006) Objective and General Principles of an Audit of a Financial Report. April 2006. Australian Government - Auditing and Assurance Standards Board. Online available at http://www.auasb.gov.au/docs/AUASB_Standards/ASA_200_28-04-06.pdf
Mapping of: AUASB Standards (ASAs) issued by the reconstituted AUASB and applicable to financial reporting periods commencing on or after 1 July 2006 to Auditing Standards (AUSs) issued by the former AuASB of the Australian Accounting Research Foundation. Online available at http://www.auasb.gov.au/docs/Mapping_of_ASAs_to_AUSs.pdf
AUASB Glossary (2006) Issued by the Auditing and Assurance Standards Board. Nov 2006. Online available at http://www.auasb.gov.au/docs/AUASB_Standards/AUASB_Glossary_28-04-06.pdf
Nicoll, Paul (2005) Audit in a Democracy: The Australian Model of Public Sector Audit and Its Application to Emerging Markets. Ashgate Publishing Ltd. 2005. Online Google Books. Available at http://books.google.com/books?id=XChYNUZOikEC&dq=Australia:+Auditing+Standards&source=gbs_summary_s&cad=0
Auditing of Enron Corporation
Responsible Accounting and Enron Questions
There were numerous parties associated with Enron who were responsible for creating the "crisis of confidence" in the accounting profession. At the top of the list would be Enron's executives themselves: Jeffery Skilling, Kenneth Lay and Andrew Fastow all broke numerous rules, regulations and laws that govern accounting principles in order to increase their revenue on the income statements and in turn raise their stock prices. Among the most grievous accounting sins committed were the failing to recognize Enron's true revenue, in which revenue numbers were inflated using mark-to-market accounting; falsifying earnings so that the stock prices would stay high; and committing insider trading in order to benefit even further from their deception.
A second party that caused just as much chaos in the accounting profession was the accounting giant Arthur Andersen. As Enron's own committees discovered, the then-respected firm failed to handle the….
Ashbaugh, Hollis. "Ethical Issues Related to the Provision of Audit and Non-Audit Services: Evidence from Academic Research." Journal of Business Ethics 52.2 (2004): 143-48.
Knapp, Michael Chris. Contemporary Auditing: Real Issues and Cases. Mason, OH: Cengage Learning/South-Western, 2010.
"The Comeback Of Consulting." BusinessWeek - Business News, Stock Market & Financial Advice. 3 Sept. 2007. Web. 05 Feb. 2011. .
As they can use this mechanism to: protect themselves and not directly reveal this information to the general public. ("Mortgage Mess, n.d.)
A good example of this can be seen with New Century Financial during: the 2004 and 2005 audits. In this situation, KPMG discovered seven different internal controls that were considered to be: a material breach in the law. However, they did not disclose this information to investors. Instead, KMPG issues an unqualified opinion, which helped to protect them against the actions of their staff. Once the New Century began to collapse under its own weight, was the point that the KPMG would hide behind these opinions. As the company claimed that they provided accurate information, yet no one was able to see the bankruptcy of the company coming out of nowhere. This is important, because it shows how accounting firms can issue unqualified opinions about: internal weaknesses, without….
This is important, because having this system will ensure increased amounts of: accountability and transparency. as, auditors will keep detailed records disclosing their: findings and initial remarks. Over the course of time, this increases the accuracy of the financial reports that are being released. as, this can be used to: identify weaknesses in a company's internal and external controls. At which point, auditors can help organizations to create effective mechanisms, to addresses these weaknesses. Once this takes place, this means that financial information being provided to the public is accurate, by ensuring that any kind of loopholes are not exploited. When you have increased amounts of documentation / record keeping, this helps to prevent possible abuses through: increased transparency and monitoring. ("AU Section 369")
At the same time, the provisions of confidentiality are ensuring that the clients' interests are protected at all times. This means that auditors will not disclose….
Ford Motor Company continued to experience profitable growth in 2012 through the firm's proven One Ford plan regardless of experiencing the ongoing challenges that characterized the global market during this period. The company's efforts toward meeting the needs of its customers contributed to strong financial results for the fourth consecutive year as it registered positive net income. The strong financial results were documented in Ford Motor Company's annual report for 2012, which also provided a roadmap for its business operations in the coming years. However, auditors have come into a department as part of a company-wide audit before issuing an audit opinion for the firm's financial reports. The department's staffs need to have some expectations of what the auditors will do as part of their plan to issue an audit opinion of its financial reports.
Auditors play a crucial role in ensuring that what company outsiders see on financial reports is….
The first thing that I did for this audit was to gather the balance sheet and the work papers. This is the basic information that I used to conduct the audit. Having these two things allows me to reconcile the two. Ideally, the work papers and the bank accounts will correspond, and that they will also align with the financial statements. It was found that this was not the case. But the initial step was to gather the information.
The second step was to reconcile the information that I gathered. The work papers, bank accounts and financial statements are three different things, and all of the information should align. In seeking to evaluate these things, several issues were identified. It is not unusual to identify an area of concern in an audit. The response to this step is to check with the accounting department to try to determine how and why….
Auditing Standards must, out of necessity, be of the highest possible standards, and the ethics involved must be of the best quality possible. If they were not, they would have to be improved as soon as any disparities are noticed, and this in turn means that the standards that are specified within the Auditing Standards Board that are meant to be followed by all auditors as well as CPA firms while performing audits must be strictly adhered to, otherwise, there will be unethical accounting behavior, which is not at all a healthy phenomenon. At present, the PCOAB or the Public Company Accounting Oversight Board sets the standards for accounting behavior, wherein audits and reviews of the SEC registrants and of the ASB must be brought under the rules as specified by the quality control standards. However, one must acknowledge the fact that to much importance is being given to blaming….
I think this would be the case regardless of whether the investigations reveal wrongdoing or not. When my integrity is questions, it could take years to build up a sound reputation again, and I might lose a significant amount of business in this way.
In order to preserve my career, I will need to be aware of all the rules and regulations relating to my business and its practice. Before entering into a relationship with another company, I would first conduct in-depth investigations into the company's general practices, as well as its accounts and the specific areas where I will be involved. Once I have taken on a client, I would also do my utmost to ensure that the company conducts its business with integrity. If I find discrepancies, I would encourage the company to correct these, and terminate my relationship with them if they do not, even if they….
However, if any type of confrontation does not happen after fraud is discovered the individual is more inclined to report the transgression to an internal auditor. A 2 x 2 design was used for the experiment (p. 56).
The participants were divided into two groups. The first group consisted of forty-four students and the second group consisted of fifty-two students. The first group was assigned to a situation where the social confrontation what the present condition and the second group dealt with a scenario pertaining to the social confrontation absent condition. The present or absent social confrontation had to do with whether or not the person would confront the wrong doer before either telling the supervisor or the internal auditor. There were two types of fraudulent acts. One was fraudulent financial reporting and the other was misappropriation of assets. Of the ninety-six participants, eighteen answered incorrectly with left the remaining….
Three areas of heightened audit risk for Havelock Europa are cost of sales, net profit and liabilities.
Havelock's revenue was ?92,462. In 2013, it was ?89,590. In 2012, there were discontinued operations, but in 2013, none were reported. Nevertheless, the company's revenues declined in the year. Despite this decline in revenue, the company recorded a profit. The management commentary does not necessarily explain where this profit comes from. They mentioned a commitment to efficiency, and that they have paid down debt, but there is less clarity about how they made less revenue and increased their profits. The company is not paying a dividend, but they do have motivation to demonstrate to their clients that things are improving for them financially. The management commentary highlighted areas of growth in particular. While the commentary will always contain positive spin, it is fair to ask where the improved financial performance came from. Management….
Havelock Europa 2013 Annual Report. In possession of the author
Huband, G. (2013). Havelock Europa looking to retail upturn as losses widen. The Courier. Retrieved April 8, 2015 from http://www.thecourier.co.uk/business/news/havelock-europa-looking-to-retail-upturn-as-losses-widen-1.135390
This method has good statistical properties for a much broader class of distributions, except for efficiency, however, in spite of the fact of this assumption (Hayashi, Fumio (2000). Econometrics. Princeton University Press).
In view of this fact, dependent linear models of their unknown parameters are more susceptible than their non-linearly related counterparts. The resulting estimators, then, become more easily determinant due to these existent statistical properties. However, this leads to another complication; the response function then implies that the outcome is binary. Though possible to estimate the simple linear regression model, the independent variable y takes on the binary values of either 0 or 1 (Hayashi, Fumio (2000). Econometrics. Princeton University Press).
But are the problems? Why are there problems?
"Well, yes. Actually, there are three particular problems that arise with binary dependent variables in linear regression models. Each of these makes the use of linear regression inappropriate and signifies the need….
Zhang, Yahong. Yang, Kaifeng. Citizen Participation in the Budget Process: the Effect of City Managers. J. Of Public Budgeting, Accounting, and Financial Management, 21 (2), 289-317. 2009. Web. 23 March 2011.
Tibshirani, Robert (1996). "Regression Shrinkage and Selection via the Lasso." Journal of the Royal Statistical Society. Series B (Methodological) 58 (1): 267 -- 288.
Yang, Kaifeng. Miller, Gerald J., eds.: Handbook of Research Methods in Public. Administration. Boca Raton, FL, USA, Auerbach, Taylor & Francis CRC Press. (2008) 823 -- 839
Lai, T.L.; Robbins, H; Wei, C.Z. (1978). "Strong consistency of least squares estimates in multiple regression." Proceedings of the National Academy of Sciences USA 75 (7).
Leslie Fay Company Case
Leslie Fay discovered in 1992 that the company's corporate controller with some other employees had committed a serious auditing fraud which showed inflated profits. When these irregularities were found, the company had already been knee-deep in debt as there were losses of around $81 million dollars. This led to the company filing bankruptcy to protect itself against creditors. This was indeed a serious issue and one may wonder if SOX, had it been designed then, would have been able to discover the irregularities much sooner.
Theoretically speaking, it appears that the answer would be in the affirmative. A company which is closely following SOX's mandatory auditing practices of having an internal control system and independent auditors checking the presence of those controls would be in a much better position than Leslie Fay because irregularities could be unearthed sooner. With internal controls such as random checking of transaction and….
In other words, if the financial difficulties they encounter are the fault of the auditing firm, they will have protection from any legal ramifications they may have encountered…Read Full Paper ❯
Auditing function has undergone several transformations from the periods when it was simply a function of giving opinion but also to an error where auditors are looked upon…Read Full Paper ❯
The implementation of this standard will give auditors much more control over the audit process. This gives the auditors the tools they need to meet their responsibilities with…Read Full Paper ❯
(Nicoll, 2005) IV. MIXED ECONOMY The work of Nicoll (2005) relates that the economy of Australia is one that is mixed "with separate audit legislation for the public and private…Read Full Paper ❯
Auditing of Enron Corporation Responsible Accounting and Enron Questions There were numerous parties associated with Enron who were responsible for creating the "crisis of confidence" in the accounting profession. At the…Read Full Paper ❯
As they can use this mechanism to: protect themselves and not directly reveal this information to the general public. ("Mortgage Mess, n.d.) A good example of this can be…Read Full Paper ❯
This is important, because having this system will ensure increased amounts of: accountability and transparency. as, auditors will keep detailed records disclosing their: findings and initial remarks. Over…Read Full Paper ❯
Auditing Ford Motor Company continued to experience profitable growth in 2012 through the firm's proven One Ford plan regardless of experiencing the ongoing challenges that characterized the global market during…Read Full Paper ❯
Auditing The first thing that I did for this audit was to gather the balance sheet and the work papers. This is the basic information that I used to conduct…Read Full Paper ❯
Auditing Standards must, out of necessity, be of the highest possible standards, and the ethics involved must be of the best quality possible. If they were not, they would…Read Full Paper ❯
I think this would be the case regardless of whether the investigations reveal wrongdoing or not. When my integrity is questions, it could take years to build up…Read Full Paper ❯
Business - Management
However, if any type of confrontation does not happen after fraud is discovered the individual is more inclined to report the transgression to an internal auditor. A 2…Read Full Paper ❯
Auditing isk Three areas of heightened audit risk for Havelock Europa are cost of sales, net profit and liabilities. Havelock's revenue was ?92,462. In 2013, it was ?89,590. In 2012, there…Read Full Paper ❯
This method has good statistical properties for a much broader class of distributions, except for efficiency, however, in spite of the fact of this assumption (Hayashi, Fumio (2000).…Read Full Paper ❯
Leslie Fay Company Case Leslie Fay discovered in 1992 that the company's corporate controller with some other employees had committed a serious auditing fraud which showed inflated profits. When these…Read Full Paper ❯