Howard Street Jewelers Essay
ABE
Section: 4pm
Howard Street Jewelers, Inc. 1. Identify the internal control concepts that the Levis overlooked or ignored.
In the Howard Street Jewelers case, I strongly believe that Levis didn’t perform any internal control. According to the internal control concept, internal controls to work to achieve organizational objective of effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations. In this case, Levis should manage better on who has the right to do what, and perform a separate of deities for all transactions. However, Levis failed to do so. She allows the cashier Betty to work on everything. According to the case, “Besides working as a part-time sales clerk, Betty handled all of the cash that came into the business and maintained the cash receipts and sales records.” Basically, this is telling us that Betty can do whatever she want with the …show more content…
The CPA also needs to provide opinion on both financial statements and internal control of the company’s transaction. There are five ways for the CPA to explain his opinion. They are standard unqualified report, unqualified report with an explanatory paragraph, qualified report, adverse report, and disclaimer of opinion report. In order for the CPA to gather enough information, he has to perform a search and verification procedures. For example, the CPA will take a stack of the company’s transaction, and examining those documents, then accumulating the evidence of how well or how bad the material is present. In this case, the CPA notice occasional shortages in the cash receipts records that seemed larger than normal for a small retail business, but he didn’t give his opinion to Levis immediately, he didn’t fully fulfill his responsibilities for the audit
Section: 4pm
Howard Street Jewelers, Inc. 1. Identify the internal control concepts that the Levis overlooked or ignored.
In the Howard Street Jewelers case, I strongly believe that Levis didn’t perform any internal control. According to the internal control concept, internal controls to work to achieve organizational objective of effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations. In this case, Levis should manage better on who has the right to do what, and perform a separate of deities for all transactions. However, Levis failed to do so. She allows the cashier Betty to work on everything. According to the case, “Besides working as a part-time sales clerk, Betty handled all of the cash that came into the business and maintained the cash receipts and sales records.” Basically, this is telling us that Betty can do whatever she want with the …show more content…
The CPA also needs to provide opinion on both financial statements and internal control of the company’s transaction. There are five ways for the CPA to explain his opinion. They are standard unqualified report, unqualified report with an explanatory paragraph, qualified report, adverse report, and disclaimer of opinion report. In order for the CPA to gather enough information, he has to perform a search and verification procedures. For example, the CPA will take a stack of the company’s transaction, and examining those documents, then accumulating the evidence of how well or how bad the material is present. In this case, the CPA notice occasional shortages in the cash receipts records that seemed larger than normal for a small retail business, but he didn’t give his opinion to Levis immediately, he didn’t fully fulfill his responsibilities for the audit