planning and performance. Fifth‚ auditors are also required to identify and assess any potential risks of material misstatement noted in financial statements‚ and include information gathering and assessment of risks through analysis of the gathered information‚ based on AS 12. Sixth‚ on the basis of AS 13‚ auditors are required to respond to any risks of potential material misstatement in financial statements via the general performance of the audit and conducting audit processes
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error for $29.256.67 that was not shipped until 2008. Fortunately Procedure 6 proved that there are no customer accounts that have credit balances that need to be considered for reclassification. In conclusion‚ we have discovered the total of misstatements per the entire population as follows: not material
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This document of FIN 375 Week 2 Discussion Questions consists of: 1. What is involved in a market analysis? 2. Why is a market analysis an important part of a financial prospectus? 3. Suppose you create small business plans to build the strongest rocking chairs on the market without performing a market analysis. What kinds of concerns might potential financers have? Business - General Business FIN 375 Entire course Financial Management in Small Business Explore all of your options
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Phar-Mor Case Study Phar-Mor Case 4.6 Questions 1. a) By hiring a member of its external audit team a company could gain insight into the auditor’s process and better devise methods of hiding fraud. b) Hiring a former auditor would greatly compromise and possibly impair the existing external auditor’s ability to remain independent. On top of having knowledge about the auditor’s practice‚ preexisting relationships could cause bias in the audit outcome. c) Sarbanes-Oxley Act 2002 limits the ability
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risk: the risk that an assertion is susceptible to a material misstatement‚ assuming there are no related controls. For example‚ accounting receivable must be shown a realizable value. This is an accounting estimate. Valuation is very difficult for A/R that affects many accounts. Eg‚ the company is having financial problems. They may try to overstate sales and understate expenses. * Control risk: the risk that a material misstatement could occur. The assertion will not be prevented or detected
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range of uncertainties‚ including compliance requirements and logistical problems increased potential for misstatement due to the judgements required requiring more judgement such as research and development (valuation)‚ intangible assets (valuation)‚ inventory (valuation) and property plant and equipment (valuation). ii) assets include “intellectual property rights” potential for misstatement when valuing advanced technology and intangible assets because of their nature Intellectual property
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1) If reported sales for 2010 erroneously include sales that occur in 2011‚ the assertion violated on the 2010 statements would be: a. presentation and disclosure b. valuation or allocation c. existence or occurrence d. completeness 2. The completeness assertion would be violated if a. disclosure in the statements of pledged receivables was inadequate b. unbilled shipments occurred during the period c. fictitious sales transactions were included in accounts receivable d. the allowance
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free of material misstatements‚ that alone would give me a reason to sue the auditors. B) Negligence as it is used in legal cases involving independence auditor is defined as “failure to conduct an audit with due professional care in the performance of work” C) The primary difference between negligence and fraud is fraud is the intentional concealment or misstatement of information with intent‚ while negligence is the lack of attention to detail‚ that results in material misstatement. Recklessness
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Management ’s attitude toward aggressive financial reporting and its emphasis on meeting projected profit goals most likely would significantly influence an entity ’s control environment when A. The audit committee is active in overseeing the entity’s financial reporting policies. Answer A is incorrect. An active audit committee tends to temper management ’s aggressive stance. B. External policies established by parties outside the entity affect its accounting practices. Answer B is incorrect
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Obtain an annual report for the year ending 2012 of an Australian listed company where a MODIFIED or an EMPHASIS OF MATTER opinion was given due to going concern issues. The company we have chosen is “Aircruising Australia Limited”. The company is Australian owned‚ based in Sydney and was established in 1983. The company operates under “Bill Peach Journeys”. The company provides a service to its customers. They aim to give people the opportunity to have air cruise experiences in Australia and worldwide
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