Acc 403 Assignment 1
Assignment 1: Auditors and Regulatory Oversight
Desislava Tabakova
ACC 403 – Auditing I
Professor Ashley Braun Harper
November 2, 2014
“Olympus Scandal”
The Olympus Corporation scandal is one of the biggest scandal’s to break. Olympus Corporation, the Japanese maker of cameras and medical imaging equipment is a huge corporation that lasted over two decades.
1- Analyze the audit report that the CPA firm issued. Ascertain the legal liability to third parties who relied on financial statements under both common and federal securities laws. Justify your response.
It turns out that Olympus tried to make an effort to make the company’s books accurate, at least in terms of the balance sheets. This action led to the suspicious transactions noticed by Michael C. Woodford, at the time the newly appointed president and chief executive. KPMG’s auditors in Tokyo are under scrutiny after signing off on reports issued by Olympus Corp. Auditors found several accounting irregularities when they reviewed financial statements provided by Olympus executives. The auditors were particularly concerned over $600 million worth of takeover advisory fees and payments on acquisitions. Despite their concerns, auditors chose to sign off on the reports after an outside consultant approved of the findings. …show more content…
Generally Accepted Auditing Standards or GAAS is “a set of systematic guidelines used by auditors when conducting audits on companies ' finances, ensuring the accuracy, consistency and verifiability of auditors ' actions and reports” (Lexico Publishing Group, 2008). The following paper will explain the elements of GAAS and how GAAS is applied to
Desislava Tabakova
ACC 403 – Auditing I
Professor Ashley Braun Harper
November 2, 2014
“Olympus Scandal”
The Olympus Corporation scandal is one of the biggest scandal’s to break. Olympus Corporation, the Japanese maker of cameras and medical imaging equipment is a huge corporation that lasted over two decades.
1- Analyze the audit report that the CPA firm issued. Ascertain the legal liability to third parties who relied on financial statements under both common and federal securities laws. Justify your response.
It turns out that Olympus tried to make an effort to make the company’s books accurate, at least in terms of the balance sheets. This action led to the suspicious transactions noticed by Michael C. Woodford, at the time the newly appointed president and chief executive. KPMG’s auditors in Tokyo are under scrutiny after signing off on reports issued by Olympus Corp. Auditors found several accounting irregularities when they reviewed financial statements provided by Olympus executives. The auditors were particularly concerned over $600 million worth of takeover advisory fees and payments on acquisitions. Despite their concerns, auditors chose to sign off on the reports after an outside consultant approved of the findings. …show more content…
Generally Accepted Auditing Standards or GAAS is “a set of systematic guidelines used by auditors when conducting audits on companies ' finances, ensuring the accuracy, consistency and verifiability of auditors ' actions and reports” (Lexico Publishing Group, 2008). The following paper will explain the elements of GAAS and how GAAS is applied to