They could lend insight into the intricacies of the business without the need to do extensive research. 2. Assess the client’s business risk. In Smackey’s case‚ there are serious issues ranging from loan payment‚ inventory‚ materials shortage‚ sales commission overpayment‚ a pending lawsuit‚ possible buyer loss‚ and an interesting accountant/accounting system. After a cursory look‚ the risk seems moderately high that the business could fail. 3. Perform preliminary analytical procedure. The
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Leslie Fay Case 1. After reviewing the common size financial statements and the key ratios of Leslie Fay‚ there some of the financial statement item that should have been of particular interest to BDO Seidman: 1).Sales: the sales has been growing steadily except the slight drop in 1991‚ which is contrary to the industry recession. 2). Inventory: Leslie Fay has been known for not catching up the fashion‚ there should be inventory write-off issue in the apparel industry‚ which haven’t been reflected
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INTRODUCTION C HAPTER 10 The Revenue Cycle: Sales to Cash Collections • Questions to be addressed in this chapter include: – What are the basic business activities and data processing operations that are performed in the revenue cycle? – What decisions need to be made in the revenue cycle‚ and what information is needed to make these decisions? – What are the major threats in the revenue cycle and the controls related to those threats? 1 of 160 © 2008 Prentice Hall Business Publishing Accounting
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Multiview). You are allowed to use a programmable calculator. You are allowed to use notes. You are allowed to use the following books: Accounting Information Systems‚ Hall‚ 7th or custom edition and Accounting Information Systems and Internal Control‚ Vaassen et al‚ 2nd or custom edition You are not allowed to use a dictionary. You are not allowed to take the examination papers with you. Additional information Place your name and student number at the top of each page to facilitate
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Techniques are the basic tools utilized by auditors to obtain audit evidences. Auditing Technique is defined as any technique as any technique used to determine deviations from actual accounting and controls established by a business or organization as well as uncovering problems in established processes and controls. Auditing Techniques can be used to aid organizations by uncovering errors in business practices and providing means of protection. The applied techniques can be determine if any income is hidden
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Practical 100 E 6.6 Project 100 North Maharashtra University‚ Jalgaon (NACC Re-Accredited ‘B’ Grade University) FACULTY OF COMMERCE & MANAGEMENT B.B.M.(E-Comm.) Semester VI E – 6.1 Auditing 80 + 20 Pattern: External Marks 80 + Internal Marks 20 = Maximum Total Marks: 100 [Total Lectures: 48] Objectives 1. To introduce various auditing Techniques and tools to the students. 2. To enable the students to know the Corporate Auditing practices‚ and the auditing practices followed
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equity method‚ and thus avoided reporting the loss. Often the “sale” of the investment to the SPE generated a reported gain‚ and a cash payment from the SPE to Enron to pay for the investment could be used to transfer borrowed cash. This process allowed Enron to manipulate its reported cash flow by disguising cash from borrowing as cash flow from sale of investments. Enron sold services to SPEs for large amounts in order to inflate its sales revenue and income. Because Enron did not use the equity method
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AVENUE Case Study 3.3: Saks Fifth Avenue Liberty University 13 September‚ 2009 Abstract The Saks Fifth Avenue case study concentrates on the human aspects of internal controls. Of note are Saks’ zero-tolerance policy of employee theft‚ anti-harassment policy and complaint procedure. Also‚ the case study highlights control activities in a major retail store. Finally‚ it questions what an auditor’s role is concerning employee’s work environment. Question #1 In your opinion‚ was Saks’
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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 on a timely basis by the entity’s internal control. Or‚ the auditor decides that
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Auditors are interested in “verifying” the financial statements. They work with the existing system. Developers‚ on the other hand‚ are interested in creating and maintaining the system that produces the financial statements. 32. Should internal controls prevent financial statement fraud? Explain your answer. Yes. They should prevent financial statement fraud in the sense of making it less likely‚ but they can’t absolutely prevent any particular fraud. 34. Are corporate ethics codes effective
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