|Review Checkpoints |Simulations | | |1 |45 | |1. Name the various practice standards for internal‚ governmental‚ | | | |and independent auditors and auditing firms‚ and identify their | | | |sources.
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financial statements of potential investments or loans. Provide support for your rationale. • Auditors‚ analysts‚ and legal counsel who were not traditionally considered components of corporate governance are now brought into the realm of internal governance as gatekeepers. • The legal status and fiduciary duty of company directors and officers have been more clearly defined and significantly enhanced. • Certain aspects of state corporate law were preempted and federalized
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CASE 3-2 QUESTION SUMMARY This case is about two friends which are Willie Carson and Waylon Boone who grew up in Dallas‚ Texas. Both of them went to University of Texas. Carson graduated with Accounting degree while Boone in Computer Science degree. Then‚ Carson went to work for accounting and assurance services at one of larges accounting firm in world‚ Randy Burnham & Co. While‚ Boone went to work at one of the largest manufactures of high-tech product in world‚ Alorotom Inc. After seven years
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significant information Intentional misapplication of accounting principles 2-27 The reporter’s statement makes sense. Asset misappropriations are much easier to accomplish in small organizations that don’t have sophisticated systems of internal control. Fraudulent financial reporting is more likely to occur in large organizations because management often has ownership of or rights to vast amounts of the company’s stock. As the stock price goes up‚ management’s worth also increases. However
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omitted a number of accounts that are material‚ in the aggregate. Which of the following actions should the CPA take immediately? Perform alternative procedures to verify account balances. An auditor might consider the procedures performed by the internal auditors because They are employees whose work may affect the nature‚ timing‚ and extent of audit procedures. For a reporting entity that has participated in related party transactions that are material‚ disclosure in the GAAP-based financial
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Case Study #2 – Internal Control 1. The decision to take LJB Company public will require the company to follow new control procedures. The company will have to comply with The Sarbanes-Oxley Act of 2002 (SOX). The company will be required to maintain an acceptable system of internal control. The board of LBJ will be responsible for warrant that the control process is effective. The companies must have external auditors verify to the adequacy of the internal controls put in place. Be aware
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correct accounting period Classification: transactions and events have been recorded in the proper accounts Account Balances at Year End Existence: assets‚ liabilities and equity interests exist Rights and Obligations: the entity holds and controls the rights to the assets‚ and liabilities are the entity’s obligations Completeness: all assets‚ liabilities and equities that should have been recorded have been recorded Valuation & Allocation: assets‚ liabilities and equity are included
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receivable. 2. Comment on the internal accounting control of MiniScribe‚ specifically the reasons for its ineffectiveness in preventing fraudulent financial reports. Internal accounting control is crucial to internal control in a company. Accounting control is the methods and procedures for authorizing transactions‚ safeguarding assets and ensuring the accuracy of the financial records. I think the most important reasons of the totally failure of internal control to prevent fraudulent financial
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risky‚ what concentrates their control and ability to override controls. Plus the former officer of Canadian Brass Co. Float has prior integrity issues and is sued by the SEC. Prior entity for both officers is under suspicion‚ because the funds were used as compensatory balances for loans. The company is selling solar-powered swimming pool heaters so it sells to the public. That means that are going to need an integrated and complex audit‚ including test controls and financial statements. The company
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Ethics Case BYP8-6 ACC/280 Ethics Case BYP8-6 Within organizations‚ internal controls are essential features that safeguard its assets and enhance the accuracy and reliability of the organizations accounting records. In addition‚ Congress forces companies to adhere and implement The Sarbanes-Oxley Act of 2002 (SOX). In this discussion‚ four questions will be addressed in regards to Ethics Case BYP8-6 and followed with ethical answers pertaining to the accounting industry. Who will suffer negative
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