...An Internship Report On Audit Procedure of UHY Syful Shamsul Alam & Co. and A Comparative Analysis on IFRS (IAS) and AAOIFI on Financial Reporting Issues Department of Finance Faculty of Business Studies University of Dhaka An Internship Report On Audit Procedure of UHY Syful Shamsul Alam & Co. and A Comparative Analysis on IFRS (IAS) and AAOIFI on Financial Reporting Issues (As partial fulfillment of BBA Program) Submitted To Department of Finance University of Dhaka Supervised By Taher Jamil Lecturer Department of Finance University of Dhaka Submitted By Md. Rased Mosarraf ID: 16-062 Department of Finance University of Dhaka Date of Submission: May 22, 2014. Letter of Transmittal May 22, 2014. Taher Jamil Lecturer Department of Finance University of Dhaka Subject: Submission of internship report. Dear Sir, I have the pleasure to submit an Internship Report after completing a successful three month Internship attachment at a CA firm named “UHY Syful Shamsul Alam & Co.” on “Audit Procedure of UHY Syful Shamsul Alam& Co. and A Comparative Analysis on IFRS (IAS) and AAOIFI on Financial Reporting Issues”. I have concentrated my best effort to achieve the objectives of the report and hope that my endeavor will serve the purpose. The practical knowledge and experience gathered during report preparation will immeasurably help in my future professional life. I will be obliged if you kindly approved this endeavor...
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...5-29 In planning the audit of a client’s inventory, an auditor identified the following issues that need audit attention. Listed is the issue and the assertion. Identify the assertion for items 1 through 11 above. 1. Inventories are properly stated at the lower of cost or market. Audit objective: Valuation and allocation. 2. Inventories included in the balance sheet are present in the warehouse on the balance sheet date. Audit objective: Rights and obligations 3. Inventory quantities include all products, materials, and supplies on hand. Audit objective: Classification and understandability and accuracy and valuation 4. Liens on the inventories are properly disclosed in notes to the financial statements. Audit objective: Classification and Understandability and rights and obligations 5. The client has legal title to the inventories. Audit objective: Rights and obligations 6. The financial statements disclose the amounts of raw materials, work in progress, and finished goods. Audit objective: Completeness. 7. Inventories include all items purchased by the company that are in transit at the balance sheet date and that have been shipped to customers on consignment. Audit objective: Rights and obligations 8. Inventories received on consignment from suppliers have been excluded from inventory. Audit objective: Rights and obligations 9. Quantities times prices have been properly extended on the inventory listing, the listing is properly totaled...
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...Be an Expert Witness D. L A R R Y C R U M B L E Y A N D K E I T H A . R U S S E L L eing able to deal with the unexpected is a key part of performing well as an expert witness and a challenge that some CPAs find exhilarating. Increasingly, forensic accountants are being called as expert witnesses to help sort out the labyrinthine financial aspects of litigation involving complex issues and large sums of money. In open court these advisers submit to scrutiny from a judge, the jury, attorneys, court personnel and trial spectators. CPAs who keep their cool and convey concise, cogent information—whether in depositions or under an opposing attorney's attempts to discredit their testimonies—can have a pivotal impact on a conflict's resolution as well as the satisfaction of helping a client win (see "Basic Legal Concepts," page 33). Here are some suggestions on how to increase your positive impact on behalf of your client. PREPAREDNESS IS THE KEY Juries, judges and arbitration panels charged with resolving disputes with tlnanciai aspects often know little about financial statement analyses, audits, tax, budgeting or malpractice calculation ot lost profits and damages. To help triers of fact understand the impact of different types of financial transactions or attach a measurable value to a plaintiffs injury CPAs often are called on to serve as expert witnesses. If you want to develop a niche in such October 211(14 JOURNAL of ACCOUNTANCY Come to Order Most people didn't realize...
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...are the primary ones. a. Identify the ethical issue(s). There are two ethical issues: 1. Whether to issue an unqualified opinion based on the evidence already obtained, disclaim an opinion, or follow up on the information provided by the chairperson of the board, knowing that the client may not pay for the additional audit time spent. 2. What to tell the second client. Providing confidential information will violate the Code of professional conduct but if it is not provided, the second client may purchase Hi-Sail, which could be a bad investment, and the auditor might lose the second client. The parties are affected and their rights are 1. Management, including the president and controller, have the right to have the audit completed on a timely and cost-effective basis and to a proper consideration of their claims. 2. The board of directors, including the chairperson, have the right to insist that the financial statements be fairly presented by management and on a timely and effective audit. The chairperson has a right to be heard and to have the auditor obtain evidence to support or contradict his claims. 3. Current and prospective creditors and investors, including the second client and any other prospective purchaser of Hi-Sail, have the right to receive fairly presented financial statements on a timely basis and to an unbiased opinion on those statements. 4. The individual auditor and audit firm have the right to be paid for services rendered...
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...hats” from being a public practitioner in PA1 to a comptroller in PA2. And for those writing only one exam, make sure you write from the correct perspective. Consider the following for each case: 1) Type of communication (memo, letter or report) 2) Who is writing 3) To whom the case is being written to 4) The time frame. a. ie when in the audit: beginning, middle, end; there is no point writing about issues at beginning of audit if the audit is over and there is a draft audit report b. ie regarding purchase or sale of property: has the decision already been made to buy the property (shares or assets) or not; and if so, has the financing been decided. Or maybe there is an issue such as in Feed & Grow with the auditor owning shares of company to be consolidated with client; the extra shares to result in >50% ownership have not yet been bought so it is next year’s issue. The issue must still be addressed but the recommendation might be to consider the issue further. Not all issues have to be answered today; just that they must be addressed. The recommendation can be to explore the issue further etc. It is key to use subheadings in your response. It helps make it clear what you are writing about. It also helps you organize your answer better. As for outlines, it is a personal preference how much you highlight on the exam paper rather than taking the time to rewrite it in an outline (time management). But it is important to write a bare bones outline...
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...AUDIT CRUNCH: REFORMING AUDITING 3 Fundamental Flaws in Current Audit Practice 1st point From this journal, it mainly focuses on the debating of three issues which are deeply embedded in the current auditing practices. Firstly, auditing model is one of the fundamental issues that exist in the auditing practices. It makes auditors’ financially dependent upon companies and persuades them to prioritize their own economic interest at the expense of other parties which may have an interest in audits. This is because auditors are remunerated by the client company rather than by an independent body and resulting the auditors are not able to retain sufficient distance in delivering independent audit. Auditing firms used their control of the auditing markets to colonies adjacent a market to sell consultancy services to audit clients where it causes the auditing model in practice is further complicated. With this, it will increase the auditor fee dependency upon companies and hence cause impairment in the independence of an auditor. The current auditing model is flawed and cannot be repair as auditors are generally banned from selling consultancy services to audit clients. Potential Solution The legislators should be allowed to appoint auditors of major companies. Auditors will not fear of losing the job as they don’t have to socialize their client. Although the fees could come from client but legislator or government are the one selecting auditors for work. This is to segregate...
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...risks common to such businesses. How should these risks affect the audit planning decisions for such a client? For the large, high-volume retail stores, I identified the following internal control risks common to such businesses: * Management operating strategy is the top source of all the issues. Most retail stores are pretty decentralized and may not pay much attention to the detailed operating procedures, thus may lead to some potential opportunities for staffs to steal or break the rules. * Inventory is a big issue in large high-volume retail stores, particularly people may intentionally misstate the inventory when counting and valuing it in order to steal or manipulate the earnings. * Cash is also a potential problem for such businesses. The large high-volume stores also tend to have a high volume of cash and transactions as well as some petty cash, so the handling of cash and the cut-off of transactions near period end are issues. * High turnover of the staffs is another issue of retailing industry. Since many entry-level positions has a very high turnover and low pay, those workers may not get well trained and operate as designed In planning the audit, the auditors should give extra attention to the controls surrounding cash and inventory, cut-off procedures, and the year-end inventory counts. Moreover, all of these control environment issues would increase control risk and so the audit procedures would have to be increased to offset these risks so that...
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...Tiger Pride Enterprises Name of the student Name of the instructor Date Table of Contents STATEMENT OF FACTS 3 AUDITING AND REPORTING ISSUES 4 AVAILABLE ALTERNATIVES 6 HOW I WOULD PROCEED 8 STATEMENT OF FACTS Tiger Pride Enterprise comprises of a corporate office with 4 Business divisions, each running multiple Business Units. The Divisions are labelled A, B, C and D with D being the one not matured and has an unstable income flows. Division A is most concentrated with 40 business units whereas Division D is least concentrated with only 5 business units. All expect units 6 and 7 of Division B vows to have management with the required abilities and skills to organize the business operations effectively. Each business unit maintains all its recording and proceeds of transactions, general ledger and other accounting information at the business unit level. Of the many business units, few are to meet the Statutory Audit requirement by the competent state authority. The management teams meet up periodically to discuss the development and performance of business units and divisions in particular along with regular meetings with management at the consolidated level. All activities and performance indicators are adjusted for changes in the business environment and outlook. Alongside the regular meet-ups, Corporate Management team examines the business operations and financial results primarily through 2 key performance indicators. 1. Revenue of each business unit ...
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...over the audit of Smackey Dog Foods, Inc. Solution: The SEC (Securities and Exchange Commission) has substantial influence on the audit of Smackey Dog Food, Inc. This can be seen in the audit standards that have to be followed by the established independence of the auditors involved in the Smackey audit. In the audit of public listed companies which includes Smackey, the auditors need to observe several principles. Independence is one of the six principles exhibited by the AICPA and the others include responsibilities such as the public interest, integrity, objectivity and independence, due care, and scope and nature of services. An audit team is required to be objective and independent with regard to professional responsibilities and by being independent in fact and appearance when providing auditing and other attestation services. Under the Sarbanes – Oxley, auditors have to be objective and independent otherwise legal sanctions can be pursued and incurred. Q2: Discuss the essential activities involved in the initial planning of an audit. How do these all specifically to the Smackey Dog Food client? Solution: The following are several essential activities involved in the initial planning of an audit and how they are specifically related to Smackey Dog Food, Inc. : 1. First understand the client’s business and industry. The audit firm can get the full benefit of its experience in auditing other food manufacturers in planning and doing the audit for Smackey...
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...Question 2 Referring to Section 550 Quality Assurance and Practice review of the MIA By-Laws (on professional ethics, conducts and practice) and ISA220 Quality Control for an Audit of Financial Statements, do you believe that the engagement leader of an audit (like David Duncan on the Enron audit) should have authority to overrule the opinions and recommendations of the accounting & auditing function? Why or why not? In our opinion, the engagement leader of an audit should not have the authority to overrule the opinions and recommendations of the accounting and auditing function. To support our judgment, we refer the case to Section 550 Quality Assurance and Practice Review of the MIA By-Laws and ISA 220 Quality Control for an Audit of Financial Statement. Section 550.1 The By-Laws states that every member in public practice has to ensure that the firm adopts and applies policies and procedures designed to maintained adherence to professional standard. Enron had been hiding its Special Purpose Entity (SPE) by not consolidating the entity into its financial statements. The SPE were used to embezzle funds and hide the firm’s debts and expenses. This caused the firm to have understated expenses and profitable financial statements. The action of creating SPE is totally against the fundamental principles of auditing in terms of integrity. The principle of integrity imposes an obligation on all professional accountants to be straightforward and honest in all professional and...
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...becoming the nation’s greatest company, Enron instead laid claim to being the largest corporate bankruptcy in the history. The greediness and egotism wiped out the honesty and integrity that should instill on the persons who were involved in this case. Arthur Edward Andersen built his firm, Arthur Andersen & Company, into one of the largest and most respected accounting firms in the world through his reputation for honesty and integrity. His motto was “Think straight, talk straight” and he insisted that his clients adopt that same attitude when preparing and issuing their periodic financial statements. Arthur Andersen’s auditing philosophy was not rule-based; instead he invoked a substance-over-form approach to auditing and accounting issues. He avidly believed that the primary role of the auditor was to ensure that clients reported fully and honestly to the public, regardless of the consequences for those clients. Ironically, Arthur Andersen & Co.’s dramatic fall from eminence resulted from its association with a client known for aggressive and innovative uses of “accounting gimmicks” to window dress its financial statements. Enron Corporation was the second largest client of the firm and was involved in large, complex transactions with hundreds of special purpose entities (SPEs) that it used to obscure its true financial condition and operating results. Among other uses, these SPEs allowed Enron to download underperforming assets from its balance sheet and to conceal...
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...------------------------------------------------- MCCG : 2007 Part II. Best Practices in Corporate Governance This entry was posted on May 16, 2012. Bookmark the permalink. Leave a comment The principles are divided into 4 parts as shown below: 1. Directors 2. Directors’ Remuneration 3. Shareholders 4. Accountability and Audit Below are the guideline set for Directors. 1. DIRECTORS I The Board Every listed company should be headed by an effective board which should lead and control the company. II Board Balance The board should include a balance of executive directors and non-executive directors (including independent non-executives) such that no individual or small group of individuals can dominate the board’s decision making. III Supply of Information The board should be supplied in a timely fashion with information in a form and of a quality appropriate to enable it to discharge its duties. IV Appointments to the Board There should be a formal and transparent procedure for the appointment of new directors to the board. V Re-election All directors should be required to submit themselves for re-election at regular interval and at least every three years. 2. DIRECTORS’ REMUNERATION I The Level and Make-up of Remuneration Levels of remuneration should be sufficient to attract and retain the directors needed to run the company successfully. The component parts of remuneration should be structured so as to link rewards to corporate and individual...
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...1666 K Street, NW Washington, D.C. 20006 Telephone: (202) 207-9100 Facsimile: (202) 862-8430 www.pcaobus.org ) CONCEPT RELEASE ON AUDITOR ) INDEPENDENCE AND AUDIT FIRM ) ROTATION; ) ) NOTICE OF ROUNDTABLE ) ) PCAOB Release No. 2011-006 August 16, 2011 PCAOB Rulemaking Docket Matter No. 37 Summary: The Public Company Accounting Oversight Board ("PCAOB" or "Board") is issuing a concept release to solicit public comment on ways that auditor independence, objectivity and professional skepticism could be enhanced. One possible approach on which the Board is seeking comment is mandatory audit firm rotation, which is explored in detail in this release. However, the Board seeks advice and comment on other approaches as well. The Board will also convene a public roundtable meeting in March 2012, at which interested persons will present their views. Additional details about the roundtable will be announced at a later date. Public Comment: Interested persons may submit written comments to the Board. Such comments should be sent to the Office of the Secretary, PCAOB, 1666 K Street, N.W., Washington, D.C. 20006-2803. Comments also may be submitted by e-mail to comments@pcaobus.org or through the Board's Web site at www.pcaobus.org. All comments should refer to PCAOB Rulemaking Docket Matter No. 37 in the subject or reference line. Comments should be received by the Board no later than 5:00 PM EST on December 14, 2011. Board Contacts: Martin F. Baumann, Chief Auditor...
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...current international regulatory environment for the auditing profession is robust enough to ensure that the external auditors of listed companies provide reports to owners and investors which are sufficiently independent to serve the public interest. Introduction As we will discover, the topic posed above is a complex one, which has many arguments both in favour and against the stability of the present regulatory environment in ensuring that the audits which auditors produce are indeed impartial enough to satisfy the public interest. We will first proceed in identifying the term “public interest” in light of the accounting and auditing profession. From this will be an explanation of what is the current regulatory environment, which will then lead us to arguments for and against auditors retaining their independence. Relevant sources will be used, including some concerning current thinking on the matter. From this a suitable conclusion can be made. What is meant by “the public interest” in relation to the (accounting and) audit profession? The International Federation of Accountants (IFAC 2010) soundly defines the public interest as any individual or entity which is affected by the work of the accountancy profession: in other words, society as a whole. What is expected of the accountancy profession in relation to the public is the safeguarding of particular interests. These interests may consist of providing accurate financial information, ensuring it is of a uniform standard...
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...Guidance for audit committees Reviewing auditor independence November 2003 The Combined Code on Corporate Governance – July 2003 C.3 Audit Committee and Auditors Main Principle: The board should establish formal and transparent arrangements for considering how they should apply the financial reporting and internal control principles and for maintaining an appropriate relationship with the company’s auditors. Code provisions C.3.1 The board should establish an audit committee of at least three, or in the case of smaller companies two, members, who should all be independent non-executive directors. The board should satisfy itself that at least one member of the audit committee has recent and relevant financial experience. C.3.2 The main role and responsibilities of the audit committee should be set out in written terms of reference and should include: • to monitor the integrity of the financial statements of the company, and any formal announcements relating to the company’s financial performance, reviewing significant financial reporting judgements contained in them; • to review the company’s internal financial controls and, unless expressly addressed by a separate board risk committee composed of independent directors, or by the board itself, to review the company’s internal control and risk management systems; • to monitor and review the effectiveness of the company’s internal audit function; • to make recommendations to the board, for it to put to the shareholders...
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