Enron exposed the company to much additional risk‚ which created pressure to adopt aggressive financial reporting practice. Enron acted as a broker of speculative energy futures‚ offered financial hedges. Further many of Enron’s deals (including the SPEs) depended heavily on a high and raising stock price. The company had guaranteed its obligations with stock and had contractually agreed that those obligations would become immediately due and payable if the stock price fell below certain levels. If
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A professional judgment is a key factor in auditing. As a result of development of auditing and accounting industry‚ especially after a series of accounting fraud and auditing failure cases‚ such as Enron and Arthur Andersen‚ in the last decade‚ professional judgments is becoming a more and more important aspect for the independent auditing industry. Recently‚ many countries and professional bad issued more strict auditing standards to emphasize to this point. It means the auditor should be required
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Q: “Auditing begins where accounting ends. State points of difference between accounting and auditing? “Auditing begins where accounting ends” Accounting is a process of maintaining business records. Joint stock companies are required by law to maintain proper record of business transactions. Maintaining books of accounts and preparing financial statement is a prime responsibility of directors. The shareholders are ambitious to see that their investment is safe. It is therefore imperative
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AUDITING IN A CIS ENVORONMENT With the introduction of computers‚ conventional accounting systems and methods using papers‚ pens and abacuses have undergone drastic changes‚ therefore exerting a great impact on internal control and audit trails in following audit procedures. Also‚ the introduction of computer has brought an immense increase in the availability of electronic resources. My topic is entitled auditing in a Computerized Information System (CIS). One purpose why this topic is included
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Anderson was also responsible because they allowed Enron to use these fraudulent statements for 15 years. It is the auditor’s responsibility to question any unusual circumstances and reports and they failed to do so. They should have questioned the SPEs‚ should have noticed that notes receivable were reported wrong‚ and should have noticed that there was no internal control being practiced. Also‚ Anderson should never have practiced consulting services for a company that they audited. 2. Identify
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| | |The History of Auditing | |A detailed overview | |
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Meanwhile‚ the auditor should not be a friend of the company and should work completely independently. Parmalt’s internal auditors lack of the independent. They usually controlled by Tanzi family. The auditor also lack of professional prudence of auditing. They provide the financial reports and income statement is irresponsibility. Based on this situation‚ suggest let the internal control responsible for administering authority and company board‚ when find big problems report to them at once. Auditors
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Information (FTI) By Proactive Auditing Introduction The traditional way to audit a system involves identifying issues that have already occurred‚ then reviewing audit logs to determine which relevant events are of a serious nature. While this "after the fact" or “passive” auditing is an important tool in data security‚ an auditing program requires significant resources in people‚ process and technology to effectively identify potential incidents in a timely manner. Auditing management should be
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Page 1 of 7 CPA REVIEW SCHOOL OF THE PHILIPPINES Manila AUDITING THEORY Professional Accounting Practice Related PSA : Preface to PSA and Related Services 1. The following statements relate to the accounting profession: I. To merit public trust and confidence‚ the professional person must convince the public that he will place public service ahead of personal reward. II. A CPA certificate is evidence of basic competence in the discipline of accounting at the time the certificate
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are departures from the standard wording‚ users are more likely to recognize and consider situations requiring a modification or qualification to the auditor’s report or opinion. 3-2 The unqualified audit report consists of: 1. Report title Auditing standards require that the report be titled and that the title includes the word independent. 2. Audit report address The report is usually addressed to the company‚ its stockholders‚ or the board of directors. 3. Introductory paragraph The introductory
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