SUNWAY UNIVERSITY BUSINESS SCHOOL BACHELOR OF SCIENCE (HONS) IN ACCOUNTING AND FINANCE ACADEMIC SESSION: MARCH – JULY 2013 ACC 2034: PRINCIPLES OF AUDITING GROUP ASSIGNMENT INSTRUCTIONS TO CANDIDATES 1. There are FOUR (4) pages in this Group Assignment including the cover page. 2. This Group Assignment will contribute 30% to your final grade. 3. The assignment must be typewritten on double line spacing‚ A-4 size paper and single sided. Work should be presented in a folder‚ with a cover
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the selection process. Whatever method of selection is used‚ the auditor generally considers the following accounts: [1]. All accounts with a balance over a predetermined amount. The predetermined amount is based on the auditor’s assessment of materiality. [2]. Some or all accounts with zero balances. [3]. Accounts with old unpaid items‚ especially when subsequent sales have been paid. [4]. Accounts written off during the year under review. [5]. Accounts with entities related to the client but
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is reasonably assured. It is essential for the users of financial statements to know that the real revenues are recorded and disclosed and not fraudulent revenues. A constraint of GAAP that is relevant to the revenue recognition principle is the materiality principle. Fraudulent revenues will create misstatements that could have a material effect on the decisions of financial statement users. In 2002‚ WorldCom a telecommunication company‚ filed for bankruptcy. It was later revealed that the company
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1. What is earnings management? The companies use earnings management as a strategy by which they can easily control and manipulate their earnings to reach their pre-determined earning target. 2. Why do companies employ earnings management techniques? Accountants cannot predict every business structure‚ every new and innovative transaction. Therefore‚ they build up principles that allow for flexibility so that they can adapt to changing circumstances. However‚ people make use of that flexibility
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Parmalat Finanziaria‚ S.p.A. Case Brief Summary: Case Questions: 1). Identify key factors or circumstances that complicate an independent audit of a multinational company One thing to always keep in mind is that the culture is different across the globe. Auditors of multinational companies may face cultural and communication barriers with their clients‚ which can complicate audit tasks. We also have to account for different currency across different countries and any transactions involving them
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These are procedures the independent auditor follows when evaluating financial statements such testing the issuer’s internal control‚ and materiality. At the end of the audit‚ the CPA firm provides a detailed audit report on their findings of the issuing company to the audit committee. It is the responsibility of the audit committee to ensure the funding of the independent auditor and any outside
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Chapter 24 Completing the Audit Review Questions There are four presentation and disclosure-related audit objectives: 24-1 PRESENTATION AND DISCLOSURE-RELATED AUDIT OBJECTIVES Occurrence and rights and obligations Completeness Accuracy and valuation Classification and understandability DESCRIPTION Account-related information as described in the footnotes exists and represents the rights and obligations of the company. All required disclosures are included in the financial statement
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includes gaining an understanding of the client and identifying potential risk factors whilst developing an audit strategy and setting planning materiality. There are three key steps in the risk assessment phase‚ being; gaining an understand of the client‚ identifying potential risks and strategies to prevent or control such risks‚ and risk and materiality assessment. As by this definition there are a few identifiable risks within Queen Island Dairy. Inherent risk is the susceptibility of an assertion
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WileyPLUS Chapter Two Copyright © 2009 John Wiley & Sons‚ Inc. All rights reserved. WileyPLUS Chapter Two SUMMARY OF STUDY OBJECTIVES 1Identify the sections of a classified balance sheet. In a classified balance sheet‚ companies classify assets as current assets; long-term investments; property‚ plant‚ and equipment; and intangibles. They classify liabilities as either current or long-term. A stockholders’ equity section shows common stock and retained earnings. 2Identify and compute ratios
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actions of the auditors in both cases and identify any errors in judgment made by the auditors. The action of the Auditors‚ Audit Committee‚ and top management that worked for Molex Corporation were in error because FASB Concept Statement #2 (materiality defined) appears to apply to this case and should have know the appropriate way to handle the situation that conforms with GAAP and adjust the financials in the first quarter and note them in the second. Another error I that no mention of the adjustment
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