ACG 4632 ZZZZ Best Case Questions (40 points) 1. Identify the primary audit objectives that auditors hope to accomplish by: * Confirming a client’s year-end accounts receivable‚ and (Balance related existence) * Performing year-end sales cutoff tests. (transaction-related objective timing) (5 points) 2. Ernst & Whinney never issued an audit opinion on financial statements of ZZZZ Best but did issue a review report on the company’s quarterly statements for the three
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1. Ernst & Whinney never issued an audit opinion on financial statements of ZZZZ Best but did issue a review report on the company’s quarterly statements for the three months ended July 31‚ 1986. How does a review differ from an audit‚ particularly in terms of the level of assurance implied by the auditor’s report? A review engagement is needed to obtain basis for providing what is known as limited assurance. This gives the client’s financial statements to be prepared properly with GAAP (Generally
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Case 1.9 ZZZZ Best Company‚ Inc‚ 1. Ernst & Whinney audit firm suffered tremendously from the backlash of ZZZZ Best’s case. One of the issues stemming from ZZZZ Best’s case is the difference between a review and an audit as evidence by civil suit filed by a California bank against the firm. The bank claimed that its decision to grant ZZZZ Best’s loan was based on the opinion of Ernst & Whinney review of ZZZZ Best’s financial statements period ending July 31‚ 1986. The case was ruled in favor
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ZZZZ Best Case: 1. According to the Public Company Accounting Oversight Board (PCAOB) AS 2610 .09 and .03 successors have the responsibility to obtain information regarding a new audit client from the clients’ previous auditor however‚ auditors may submit a proposal to conduct an audit engagement before this condition is fulfilled. The purpose for this communication is to ensure that the new auditor can interpret the trustworthiness and integrity of the proposed client. Information that might affect
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Part 2 Cases Case 1A–Joint Venture #1: The Corning-Vitro Divorce This case analyzes the business venture and subsequent breakup of Corning Glass Works‚ and American company‚ and Vitro‚ a Mexican firm. Suggested Questions for Class Discussion 1. Did Vitro and Corning do enough research before engaging in a joint venture? 2. Was it wise to start with such a large venture? 3. Could some of the problems have been mitigated through cultural training during the joint venture? 4. Was two and one
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ZZZZ Best Company Fraud Case Study 1) At an early age‚ Barry Minkow was introduced to the carpet cleaning industry by his mother who worked part time as a telephone solicitor for a small carpet cleaning company. This insight of the industry allowed Minkow to understand that the carpet cleaning industry was one which had very few barriers to entry‚ no licensing requirements‚ and required only a small amount of capital to enter. Also‚ because of these few barriers to entry‚ the industry has historically
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------------------------------------------------- ------------------------------------------------- ZZZ Best Company‚ Inc. ------------------------------------------------- Case Study 2 ------------------------------------------------- Due Date: March 30‚2010 ZZZ Best‚ Case 1. Ernst & Whinney never issued an audit opinion on financial statements of ZZZZ Best but did issue a review report on the company’s quarterly statements for the three months ended July 31‚ 1986. How does a
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interested in the success of a small carpet cleaning company that made it big. Like all frauds they eventually get blown wide open. In this case it was a young female journalist writing a filler piece on Barry Minkow’s success. When tying the story up she decided to make a call to the city just to verify their contractor’s license number‚ which never existed. The ZZZZ Best case is relevant for getting into the field of auditing and forensic accounting work because‚ it is important to conduct due diligence
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1. There are numerous differences between performing a review and actual audit on the financial statements‚ but the major one is that the review does not contemplate obtaining an understanding of internal control structure. Also‚ a review does not assess control risk‚ tests of accounting records and responses to inquiries by obtaining corroborating evidence through inspection‚ observation or any other audit procedure. It can point out significant matters of the financial statements but does not provide
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ZZZZ Best Company Inc. Introduction This paper explores the ZZZZ Best Company which was begun by a 16 year old individual who was able to pull the wool over the eyes of many customers‚ investors and auditors. This paper will define the difference between review and audit when it comes to financial reports‚ comments on the procedures provided with regard to the management assertion of occurrence‚ verification of payments for jobs and how they can lead auditors to improper conclusion‚ the purpose
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