SUMMARY OF KEY POINTS OVERVIEW OF FINANCIAL STATEMENTS AUDIT * The audit enables the auditor to express an opinion whether financial statements are prepared‚ in all material respects‚ in accordance with and acceptable financial reporting framework. * Complete set of general purpose financial statements: * 1. balance sheets * 2. income statements * 3. statement of changes in equity * 4. cash flow statement * 5. summary of significant accounting policies and other
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Case Study 2 – Internal Control A review of policies and procedures for LBJ Company has been conducted‚ and there is a distinct lack of internal control that must be addressed in order for the company to go public. Internal control is identified as: “the process designed to ensure reliable reporting‚ effective and efficient operations‚ and compliance with laws and regulations” (Edwards‚ 1994). Additionally‚ to attract prospective investors‚ LBJ Company must follow the guidelines identified by the
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Gold Bear Golf‚ INC. 1. The professional auditing standards have a set of five management assertions. Of the five assertions‚ three are very important in regards to the Paragon audit. The descriptions below‚ audit procedure is explained that would have ensured the audit was completed accurately. a. Occurrence- The management assertion that ensures a particular transaction actually happened. In the case of a construction company such as Paragon‚ this could be verified by going to a job site and
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input-output relationship is not well specified‚ a(n) ___________ is established. standard cost center asset center revenue center discretionary cost center 8. Properly designed management control systems will eliminate fraudulent behavior by maximizing goal congruence within the organization. True False 9. The controllability concept states that managers should be held responsible for: costs and revenues‚ but not investments in assets used in their
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if they manipulate the financial statements‚ after all who they are hurting? It all comes out in the wash‚ right? Creative accounting is all it takes and adjustments could be made in the future to remedy this year’s fraud. Individuals who do a fraudulent act typically have the opportunity to commit the fraud. It could be because of shoddy internal controls; even with good internal controls a determined person could find a way to override them. A CEO or manager may think they are high enough on
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Insecurity in granting a driver’s license to Illegal Immigrants Should a driver licenses be a privilege for illegal immigration? Many sectors of society such as governments‚ citizens‚ activist‚ and so on have been against the driver’s licenses for undocumented aliens these days. Due to many criminal activities that government is having in this country at this time‚ any local and state administration must approve legal authorization to have a driving identification. For those who
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investor. Congress Acts to Protect Investors: Congress created the SEC shortly after the 1929 stock market crash in order to protect investors. Their goal was to restore investor confidence and faith in the financial sector‚ which was notorious for fraudulent activities‚ easy credit‚ and hazardous investments. (Investopedia). The NASD is the largest self-regulatory organization
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The case we were provided with was Abu V. Shell Company. In this case Abu and Shell company signed a contract of 10 years on the basis of the statement by Shell company experts that the station would be able to sell 900 000 liters of petrol per year. The approximate amount was provided on the basis of being direct access to the service station from Main street. A decision made by the local council announced that there would be a change in the traffic dierect access ‚ Shell company continued the contract
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two perfect examples of unethical accounting practices. While Enron was accused of a lot of shady dealings that included concealing debts in order keep them from being reflected on the company’s accounts‚ WorldCom’s accounting practices were so fraudulent that the company was led into the largest bankruptcy in history of mankind. Because of the unethical accounting practices and scandals of Enron and the WorldCom‚ the U.S. government had to get involved and that ’s when the U.S. government created
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Billing and Coding Fraud Michael Anastasio Ultimate Medical Academy Before answering the questions “what are my responsibilities for billing on a procedure that was not performed but asked to do so anyway”‚ Let me explain a little on Medical Billing Fraud? It is an attempt to fraudulently obtain payments from insurance carriers. Fraud in medical billing cost tax payers and medical providers millions of dollars annually (all-things-medical-billing.com). In 1996‚ HIPPA established the Health
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