Is earnings management good or bad? Who (or which part of corporate governance mechanisms) is responsible to constrain earnings management? To what extent can the auditor constrain earnings management? Propose some methods for the auditors to detect and constrain earnings management. Does market react to firm’s earnings management behavior? In order to discuss earnings management and what its affects are on business and whether or not it’s a good thing‚ one must first understand what earnings management
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2: In year 1‚ Joe Josephs‚ CPA‚ reviewed Lander Company’s financial statements. However‚ in year 2‚ the Lander Company hired Tom Holstrum‚ CPA‚ to audit its financial statements. Should Tom meet with Joe‚ and would Joe be considered as a predecessor auditor? Sample Case 2 Solution: Problem Identification: Is a CPA who reviewed prior period financial statements considered as a predecessor auditor? Keywords: Review‚ predecessor auditor. Conclusion: AU-C 510.05 defines a predecessor auditor and AU-C
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Analytical Procedures – A Powerful Tool for Auditors (Relevant to Paper 8 – Principles of Auditing and Management Information Systems) David Chow FCCA‚ FCPA‚ CPA (Practising) Audit tests Auditors normally carry out the following types of audit tests to determine whether financial statements are fairly stated: (i) procedures to obtain an understanding of internal control (ii) tests of controls (iii) substantive tests: • substantive tests of transactions; • analytical procedures; and •
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Public Interest in American Life Professor Willard/ T.A. Schmitt Tuesday Session 2007 December 5 • Carefully distinguish between the “contract” and “covenant” understanding or model of the professional/client relationship. Which understanding makes a greater demand on the good moral character of the professional? Why? Take a reasoned position on whether or not the “covenant” understanding is more appropriate to the overall nature of that relationship. Since the beginning of complex societies
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Introduction The importance off skepticism in performing audits has been recognized from the time the very first auditing standard was implemented (Fullerton and Durtschi‚ 2012). The recent financial crises and audit failures have caused the profession to reassess and emphasise the importance of skepticism during an audit engagement‚ ensuring that auditors increase their level of skepticism (Fullerton and Durtschi‚ 2012). Auditors are now asked to expand their skeptical perspective to the level
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When it Comes to the End: A Theory Review Katelyn C. Hall Grand Canyon University: NUR 502 September 18‚ 2012 Introduction Some of the most important days in an individual’s life are the last few they will ever have. These are the times people typically want to be surrounded by the ones they love. It is hard for most family members to watch their loved one die. And it is especially hard for those that are not ready to accept the fact that there loved one will be passing. Nurses are
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kitchen. He probably does the scheduling‚ the hiring and the firing of kitchen staff‚ as well. This position is normally filled by someone with several years cooking experience and restaurant management experience. Sous Chef- The executive chef’s assistant‚ and next in charge‚ is a sous chef. It is the job of the sous chef to pick up the slack when the executive chef has a day off or is on vacation. They may need to fill in on the line‚ or work a particular station on busy nights. Many smaller restaurant
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4. Explain why the fraud remained undetected for 13 years. What procedures might the auditors have performed to detect this fraud in a timelier manner? The fraud was undetected because of a lack of internal controls. There was a lack of segregation of duties between who collected the receipts and who prepared the deposits. Sally collected all of the receipts‚ closed out the drawers‚ and prepared the deposits. Since she performed all of these duties‚ she could easily cover her tracks by making sure
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Yongho Cho 8/26/2012 Weekly Memo #1: Should external/internal auditors be responsible for detecting client fraud? In 2001 Enron‚ the seventh largest energy company in 2001‚ filed for bankruptcy. The event named “Enron Scandal” is considered to be the most shocking incident in American economic history. Bring the country to the edge of disaster‚ the scandal was basically caused by securities fraud which Enron was charge with. The irrationality of accounting and auditing system encouraged U
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Plate Tectonics Press Release GLG/101 July 13‚ 2012 Plate Tectonics Press Release Hello everyone‚ my name is John doe and I am the Director of Earthquake Preparedness’ for Los Angles. I am here today to talk to your about earthquake preparedness. During this press release I will be describing the hazards associated with earthquakes in Los Angeles. I will discuss the origin and causes of earthquakes and the relation of earthquakes to plate tectonics and faults in Los Angeles
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