such differences could be troublesome for auditors of transatlantic entities containing parents or subsidiaries in each continent‚ where legal resource and allowable liability limits differ. the purpose of this article are to discuss the abandoing of interpretation 101-16/ describe some effects of interpretation 507-8 and compare and contrast global approaches to limiting accountants ’ liability throug the use of engagement letter. rule 101 interpret thta indemnification agreements remove a major
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government linked companies including Freight Malaysia Berhad‚ and had Kencana & Associates served as its auditors. In 2006‚ during a routine financial audit‚ the auditors identified several suspicious findings that resulted in a delay in finalising the auditor’s report. The case presented an auditor’s dilemma involving the possibility of fraud in a financial audit engagement. Keywords: fraud‚ auditors‚ professional scepticism INTRODUCTION It was 5 February 2006 and Mr Chuah Mun Soong had just finished
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The bare facts - albeit obscured by a blizzard of comment and interpretation - have been well rehearsed in the press. We announced that‚ with immediate effect‚ every audit report issued by PricewaterhouseCoopers on a UK client company will include additional language clarifying those parties to whom we owe a duty of care as auditors (the members of the company) and those to whom we do not (anyone else). This additional language does not change our liability one iota from what everyone had understood
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the responsibility to make the right decision regarding unethical conduct of Encik Selamat‚ she can convince Board of Directors about En. Selamat. If she failed to convince BOD to take action‚ she can then reveal the issue to the auditor‚ besides mentioning to the auditor the lack of segregation of duty in the business operation. She can execute and monitor implementation and performance of employees under her responsibility and convince her friend‚ Puan Azura to do the same. What should Ms. Choy
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action‚ results‚ personnel and cultural controls are used? Action control: Section 302 of SOX required both the company’s CEO and CFO to personally certify the “appropriateness of the financial statements and disclosures contained in the periodic report”. PacSun top management required their subordinates to share the certification responsibility. Through this responsibility sharing‚ the whole organization is engaged in this certification requirement. Results control: Section 404 dealt with internal
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Case Study 3 a) What events or condition above may cause substantial doubt about the entity’s ability to continue as a going concern? Events or condition that may cause substantial doubt about the entity’s ability to continue as a going concern are the first one‚ because of the high competition in the industry‚ it has affected the sales of the Fast Go. The effect of vigorous competition in the markets has makes it difficult for Fast Go to attract and retain customers and to grow their customer
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additional cost to Alchemy Inc. The Internal Audit department lacks the needed oversight and monitoring of Alchemy Inc. due to their limited scope and experience. The Audit Committee Policy indicates that the Internal Audit department should report to the Audit Committee. Furthermore‚ the Audit Committee is required to determine compensation and monitor the internal audit plan. Currently‚ the Internal Audit
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theories and concepts. The second part begins with accounting aspect which illustrates the motivations behind the insurance industry and the application of finite reinsurance. Regarding the auditing issues‚ the essay seeks to examine if external auditor PwC bewared‚ recognized and modified the real “problem” in AIG. Later the symptoms of the corporate governance will be analyzed by looking at agency-principal problem‚ organization culture‚ dysfunctional board and unprotected shareholders’ rights
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3. a) Three parties that auditors might be held liable for negligence are : 1. Liability to client (Better Production & Co) 2. Liability to third party who use the information (Usahasama City Bank) 3. Liability to the foreseen user (who rely on the auditor’s financial statement) b) No. Aiman & Co can not be held liable to Usahasama & Co. The only action available for financial loss caused by a false financial statement was in the tort of deceit. In order to succeed‚ the claimant (Usahasama)
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predecessor and successor auditors when a change of auditors is in process or has taken place. It also provides communications guidance when possible misstatements are discovered in financial statements reported on by a predecessor auditor. This section applies whenever an independent auditor is considering accepting an engagement to audit or reaudit (see paragraph .14 of this section) financial statements in accordance with generally accepted auditing standards‚ and after such auditor has been appointed
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