5.6 Case Instructional Notes Sarbox Scooter‚ Inc.: Scoping and Evaluation Judgments in the Audit of Internal Control over Financial Reporting Mark S. Beasley‚ Frank A. Buckless‚ Steven M. Glover‚ Douglas F. Prawitt INSTRUCTIONAL OBJECTIVES To help students gain an understanding of the steps involved in the scoping process for the audit of internal control over financial reporting. To provide an opportunity for students to determine the significance of accounts and locations based on both quantitative
Premium Audit Internal control Balance sheet
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
Premium Auditing Financial audit Internal control
believe should have been the three to five key internal control objectives of Goodner Brohers’ Huntington sales office. A. Goodner’s executives should focus more attention on internal control measures rather than volume in order to have operating activities with efficiency. Although sales volume is related to profits‚ the company could not scrimp on operating expenses. Goodner should make sure there is a good and healthy environment when achieving high sales volume. B. Make sure Goodner’s policy
Premium Internal control Accounting software
to information we’ve obtained from understanding of company background and during audit field work we identified some issue and company control risk related to the follow areas: * Segregation of Duties * Lack of Internal Control - Lack of control on main production for the company. - Lack of control in accounting records procedure - Lack of control in handling and recording accounts receivable *
Premium Balance sheet Accounts receivable Audit
compare the sales and the capital employed. A change in the capital turnover ratio would mean a manipulation of sales or one or more of the elements that make part of the capital employed‚ that is‚ fixed assets‚ cash‚ debtors or inventory. The use of ratios by the auditors is an important but it requires skills and experience in order to get the correct analytical results. Other financial information required during the audit The auditors should have done more testing in the controls of the
Premium Balance sheet Audit Internal control
Topic Internal Controls Title An analysis of the Internal Controls used in the Finance department at COLFIRE. Research Questions 1. How are internal controls used at COLFIRE? 2. How does COLFIRE use internal control to operate their operations? 3. What are the major internal controls principles used at COLFIRE? Organization COLFIRE. (Colonial Fire and General Insurance Company Limited.) ACKNOWLEDGEMENT I would like to thank my teacher Mr. N. Cooper for giving me the necessary information
Premium Cash register Receipt Internal control
to five key internal control objectives of Goodner’s Huntington sales office. The Goodner Brothers‚ Inc. case is an example of when company profits derived from management’s culture facilitated weak internal controls which allowed employees to commit serious fraud. "Goodner’s’ executives preached one dominant theme to their sales staff "volume‚ volume‚ volume." The Goodner Company in an effort to undercut its cut back on operating expenses primarily related to internal controls. "Goodner’s gross
Premium Internal control Sales
ended‚ and related notes to the financial statements. We have also audited management’s assessment‚ included in the accompanying Management’s Report on Internal Control Over Financial Reporting‚ that Apollo Shoes‚ Inc. maintained effective internal control over financial reporting as of December 31‚ 2006‚ based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO criteria). Managements Responsibilities
Premium Auditing Audit Financial audit
delivered or the services must have been provided to the customer. Also‚ the amount of the sale needs to be fixed and determinable‚ and there must be a belief that the cash will be collected from the customer in a timely manner. This is important to the users of financial statements because it gives them certainty that the dollar amount on the financial statements is accurate. 2. The amounts of the sale were not determinable‚ nor was there any reason to believe that the cash would be collected
Premium Generally Accepted Accounting Principles Accounts receivable Internal control
1. List what you believe should have been the three to five key internal control objectives of Goodner’s Huntington sales office. The Goodner’s Huntington sales office should have implemented the following internal control objectives: 1. The reliability of financial reporting‚ which relates to the timely and accurate recording of transaction‚ and it makes sure that financial reports are reliable and free of material misstatement. In addition‚ it also deals with the physical security
Premium Internal control