...Payal Mehta ACC416 October 1, 2013 Auditing Research Paper The profession of auditing plays a very important role in our economy especially after Congress passed the Sarbanes-Oxley Act its role in the economy was greatly solidified. Auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria. Auditing should be done by a competent, independent person. “The auditing profession offers a wide range of employment opportunities for new accountants. Most accounting firms offer client services in three areas: auditing, tax, and consulting. A new accountant might be hired to work in any of these areas. In the audit area, the accountant may work for a variety of clients including private or public companies, clients in banking, insurance, manufacturing, technology, retail, health care, or government. Individuals working in the audit area may also spend most of their time providing internal audit services to clients rather than working as an external auditor. Working in any of the areas in an accounting firm may be one of the most demanding jobs, but it is also one of the most interesting, exciting experiences and a great way to prepare to work in the corporate business world.” “What is Auditing?” Web. 29 September 2013 Accounting is the recording, classifying, and summarizing of economic events in a logical manner...
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...EXAM COVER SHEET NOTE: This exam paper may be RETAINED by the student EXAMINATION DETAILS Course Code: Course Description: Date of exam: ACCT1111 Auditing and Assurance Services 28/10/2008 Start time of exam: 9:15 AM Duration of exam: 3hr 15min Total number of pages (incl. this cover sheet) 8 ALLOWABLE MATERIALS AND INSTRUCTIONS TO CANDIDATES 1. Write your full name and student number on each examination booklet together with the number of examination books used. Students must not write during reading time. 2. This is a CLOSED BOOK Exam. 3. Commence each question on a new page. Carry out the instructions on the front cover of the examination script book and the front of this exam paper. 4. Non text storing calculators are allowed. 5. Bi-lingual dictionaries are not allowed. 6. No electronic devices such as mobile phones, laptop computers, electronic dictionaries etc. are permitted to be taken into the exam room. 7. The examination paper contains the following questions: Section A ONE essay questions 25 marks Section B TWO short answer questions 15 marks Section C FIVE application questions 60 marks Totalling 100 marks 8. To obtain a pass in this course, candidates must achieve at least 50 marks overall and obtain at least 50% of the total marks on this examination paper. 9. Attempt ALL questions and all parts of questions. 10. No dictionaries are allowed in this examination unless duly authorised as a special consideration by the Course Coordinator...
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...Essay 1. There are two different auditing functions internal auditing and external auditing. Internal auditors are a company’s own accounting employees that perform the audit. On the other hand, external auditors are from outside of the company and work for an independent CPA firm that performs an external audit. Internal auditors report to top management positions such as the Audit Committee of the Board of Directors. The internal auditing function involves five main evaluations. 1) Employee compliance with organizational policies and procedures, meaning that employees are not breaking or violating the company’s rules. 2) Effectiveness of operations, meaning that the company’s controls and production are operating as efficiently as possible. 3) Compliance with external laws and regulations, meaning that the company’s procedures and operations do not violate any governmental or business laws. 4) Reliability of financial reports, meaning that the financial reports are not biased or construed in a way that would cause misrepresentation. 5) Internal controls, this means that the company is protected (as well as possible) against fraud, theft, and corruption. Overall, the internal audit function checks the efficiency and integrity of almost the entire company. The internal audit benefits the company’s management and employees to check and ensure that company procedures are efficient and legal. The company would rather have a mistake or fraudulent information be caught by the internal...
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...Suretta Smith ACC/491 Generally Accepted Auditing Standards Paper September 25, 2012 Instructor: Santos Alarcon, Jr. Abstract The purpose of this paper will be to describe the nature and functions of auditing. The following will be addressed in this paper: description of the elements of the Generally Accepted Auditing Standards (GAAS), description how these standards apply to financial, operational, and compliance audits, explanation of the effect that the Sarbanes-Oxley Act of 2002, and the Public Company Accounting Oversight Board (PCAOB), will have on audits of publicly traded companies and the discussion on the additional requirements that are placed on auditors from this Act, and the actions of the PCAOB. The generally accepted auditing standards (GAAS) were implemented by the Public Company Accounting Oversight Board (PCAOB), in April of 2003. The standards were also adopted by the Auditing Standards Board of the American Institute of Certified Public Accountants, which consists of ten standards that establishes the framework for conducting audits. However, the auditing standards are not detailed but guidance on what should be included in the financial statements (Boynton & Johnson, 2006). The GAAS consist of three categories that incorporate the ten standards which are general standards, standards of field work, and standards of reporting. General standards. under the general standards category, it informs about the characteristics of adequate...
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...Generally Accepted Auditing Standard Paper ACC/491 Generally Accepted Auditing Standards Paper Auditing is defined as “a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between the assertions and established criteria and communicating the results to interested users” (Louwers, Ramsay, Sinason, & Stawser, p. 3). This is basically saying that auditors are given the job of ensuring that all processes are recorded correctly and obtained for the required amount of time. I will discuss the nature and functions of auditing, while giving examples from my current employer, Capital One. I will then describe the elements of the Generally Accepted Auditing Standards, and also tell how these standards apply to financial, operational and compliance audits. I will explain the effect that the Sarbanes-Oxley Act of 2002 and the Public Company Accounting Oversight Board will have on audits on publicly traded companies. Last, I will discuss the additional requirements that are placed on auditors from the Sarbanes-Oxley Act and the actions of the Public Company Accounting Oversight Board. The auditing process can be very tedious. As an auditor, you must pay close attention to detail. As a Lead Teller with Capital One, I have the responsibility of not only ensuring that all processes are done correctly and retained for the amount of time specified by the company...
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...Casualty Actuarial Society Committee on Enterprise Risk Management has adopted the following definition which includes the purpose of ERM : “ERM is the discipline by which an organization in any industry assesses, controls, exploits, finances, and monitors risks from all sources for the purpose of increasing the organization’s short – and long-term value to its stakeholders.” In the US, COSO published its ERM-Integrated framework in 2004. COSO identified a need for robust framework to help companies effectively identify, assess, and manage risk. The resulting framework has eight components and four objectives. The eight components are:- * Internal Environment- It encompasses the tone of an organization, and sets the basis for how risk and control are viewed and addressed by an entity’s people. * Objective setting –Objectives must be aligned with the organization’s risk appetite, which derives risk tolerance levels for the organization. * Event identification-Management identifies potential events that, if they occur, will affect the entity’s ability to successfully implement the strategy and achieve objectives adversely or positively. * Risk Assessment-It allows an entity to consider the extent to which potential events have an impact on achievement of objectives. * Risk response-It includes risk avoidance, reduction, sharing and acceptance. * Control Activities-These are the policies & procedures that help ensure the management’s risk responses...
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...a. The issue being addressed in the paper: “Risk-Based Auditing, Strategic Prompts, and Auditor Sensitivity to the Strategic Risk of Fraud” written by Kendall Bowlin explains how auditors do not anticipate the strategic risk that arises when client managers anticipate auditors’ risk based resource allocations. The conventional auditing approach suggests that more (fewer) audit resources should be focused on higher (lower)-risk accounts. However, according to the paper’s author this idea is causing that low-risk accounts can actually have a higher risk of fraud associated. It is happing because in some occasions management anticipates this audit strategy and focus its audit resources on high risk accounts. At the end, the purpose of this paper is expose the potential threat which is being caused with the traditional risk assessment procedures. b. The paper shows, with a laboratory experiment, how auditors behave according to the conventional risk-based auditing approach (It means, auditors allocate more resources on accounts deemed to be riskier and fewer resources on accounts that seem less risky) and the consequences that it bring. The experiment consist in a group of students who interact in a multi-account audit setting, which reflects the essential strategic tension that exists between real-world auditors and managers. In this experiment, some student participants assuming the role of auditors and the others student participants assume the role of financial reporting...
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...a. What are the major arguments made in the first paper? The major arguments made by Professor Sandra Waddock is that business professions are mainly concerned with temporary financial performances and the growth of earnings at the expense of people, society, and natures resources. Thus, she recommends transforming business education curriculum to increase future business leader’s society responsibility, trust, and integrity. Accordingly, the five critical elements she suggest to significantly change business education are a sense of balance, integration of body, mind, and heart, holistic understanding, respect for diversity, and a grasp of complex change. Do you agree with them? In my opinion, she is very accurate about most company’s culture being about maximizing profits at all cost. For example, the chocolate maker Nestle maximized profits to shareholders by exploiting child slave labor in West African cocoa farms. According to Collingsworth, “Nestle crossed a very bright line and proceeded in bad faith. It’s clear the only way they are going to change is if they get smacked”. In the end, the Nestle leaders of the firm should have followed the curriculum set by Professor Sandra Waddock’s. Thereby, allowing them to acknowledge that taking advantage of cheap labor wages in another country is very unethical. They should have concurred that the ethical action was to provide a living paying wage to the workers producing the chocolate. As a result, the firm would generate a...
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...Acc 327 Case No. 2 Spring 2012 It is January 20, 2012, and you are the senior auditor in charge of auditing the 2011 year-end financial statements for Granger Paper Company (GPC). GPC is a profitable company that has been in business for many years. It is primarily a manufacturing company that buys wood from timber growers and converts the wood into a variety of paper products. It is a publicly traded company with a reputation as a good corporate citizen. Although GPC has been audited many times in the past by external CPA firms, this is the first year your firm has conducted the audit. GPC’s total revenue for 2011 is $80 million. In examining the revenue for the year, you notice that $3 million of the revenue does not come from GPC’s primary operations (i.e., revenue from sales of paper goods). This $3 million in revenue is labeled as timber revenue in GPC’s books. This strikes you as odd because, generally, GPC buys timber. That is, timber is part of the cost of goods sold for GPC and, as such, is an expense. You ask GPC’s controller, Pat Smith, why GPC is recognizing timber revenue? Pat informs you that GPC began diversifying its operations a few years ago. A natural extension of its business seemed to be growing and selling timber. So, five years ago, GPC bought 10,000 acres of land in Alabama and Mississippi for purposes of growing timber. The land was purchased from a previous timber grower that had recently harvested its timber. Immediately after purchasing...
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...Production process flow Factory starts working on an order after order is confirmed. In the following production processes are listed and explained. #1. Fabric Sourcing Factory sources fabrics from buyer recommended fabric suppliers. This way they able to maintain quality level of the fabrics. Fabric are sourced and stored in fabric store in racks. Fabric inspection is done prior to issue fabric to cutting department. #2. Trims Sourcing Factory sources trims and accessories based on requirement and stored in Trim store room. Trims are kept buyer wise. For inventory management factory uses bin card. Each bin card contains details of trims, available inventory stocks. #3. PP Sample Development Pre-production sample is made in production line and send to customer for approval. Factory makes PP sample in production line instead of sampling department, where most companies make PP sample from sampling department. #4. PP Meeting: PP meeting is held after approval of PP sample. In PP meeting it is discussed that how an order factory will process. #5. Cut panel laundry (CPL) This process is carried out to improve dimensional stability of the knitted fabric, such as fabric shrinkage and torque or twisting that may happen after garment wash. All fabrics do not require to CPL process. Factory does fabric shrinkage test and spirality test in in-house lab. Based on the lab test, they decide whether to do CPL or not. #6. Cutting ...
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...Learning Team, Auditing, Attestation, and Assura Purchase here http://chosecourses.com/acc-491-week-2-learning-team-auditing-attestation-and-assura Description ACC 491 Week 2, Learning Team, Auditing, Attestation, and Assurance Services Paper 1 ACC 491 Week 2, Learning Team, Auditing, Attestation, and Assura Purchase here http://chosecourses.com/acc-491-week-2-learning-team-auditing-attestation-and-assura Description ACC 491 Week 2, Learning Team, Auditing, Attestation, and Assurance Services Paper 1 ACC 491 Week 2, Learning Team, Auditing, Attestation, and Assura Purchase here http://chosecourses.com/acc-491-week-2-learning-team-auditing-attestation-and-assura Description ACC 491 Week 2, Learning Team, Auditing, Attestation, and Assurance Services Paper 1 ACC 491 Week 2, Learning Team, Auditing, Attestation, and Assura Purchase here http://chosecourses.com/acc-491-week-2-learning-team-auditing-attestation-and-assura Description ACC 491 Week 2, Learning Team, Auditing, Attestation, and Assurance Services Paper 1 ACC 491 Week 2, Learning Team, Auditing, Attestation, and Assura Purchase here http://chosecourses.com/acc-491-week-2-learning-team-auditing-attestation-and-assura Description ACC 491 Week 2, Learning Team, Auditing, Attestation, and Assurance Services Paper 1 ACC 491 Week 2, Learning Team, Auditing, Attestation...
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...instability and the compromising factor of accounting profession itself. Out of the many parties in the league and the major force behind the debacle of Enron concern Andersen's, the accounting and auditing firm that once deserved name in the industry for its conscience in accounting professional services and auditing. As the case relates to, accounting audit for Enron is attended by Andersen's since long enough. However, the interesting feature is that some compromise in the profession of accounting services by Andersen's was notable, given that there are noteworthy feature of stock manipulation, especially in financial statements of Enron attended and audited by Andersen's. The statement and restatement of Enron also gives some probable indication for manipulation of accounting, where debate and counter debate in that regard from the prying eye of the media was a common feature. Thus, the involvement of Andersen's in Enron consultancy and professional auditing makes it rather more imploded for the direct involvement of Andersen's that also successively ushered the debacle and bankruptcy of Enron for the entire sheer element attached to it. Moreover, the accounting scandal involving Enron have been subject to criticism from many quarters. However, insiders who testify against the auditing firm make it the biggest party of the fall out and bankruptcy of Enron...
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...had a conflict of interest. Andersen earned more form other accounting services from Enron than from auditing services performed. This would certainly lead to the notion that Andersen could and probably did alter the financial reports of Enron to their own benefit. The top executives at Enron were also just as responsible as each of them were profiting from the buying and selling of the company’s stock making huge profits. Both the auditors and the top executives were well aware of the special purpose entities to protect the data that should have been entered on the consolidated financial statements of Enron. The auditors and the top executive should have noticed the problem with the special purpose entities and reported them. Both the auditor and the top executives were profiting from the special purpose entities not being reported on the consolidated financial statements. 2. List three types of consulting services that audit firms have provided to their audit clients in recent years. For each item, indicate the specific threats, if any, that the provision of the given service can pose for an audit firm’s independence. One service an auditing firm has offered to its clients is bookkeeping. This can certainly be a threat because the auditor will not look as closely at work he or she performed. The audit can potentially have bias. A second service an auditing firm may offer its clients is tax...
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...The Impact of the Sarbanes-Oxley Act on Auditing Prior to the 2002, there were numerous accounting and corporate scandals that rocked the business world. Foremost of which is the Enron debacle which was followed by WorldCom, Tyco International and Global Crossing (CIO Decisions). The collapse of these businesses was attributed to the lack of regulatory controls in the part of the government as well as transparency of operations of corporations which can be of help to its stakeholders in the analysis of profitability and assurance of good governance to the public. They importance of the Act lies on the accountability and security of financial reporting that the stakeholders would have in a corporation’s implementation of good business practices and adherence to laws and regulations in the administration and operations of the company. The Sarbanes-Oxley Act revised a significant portion of the federation securities laws which had been in place for 60 years already (Sarbanes-Oxley Information). Before SOX, there is a self-regulation in the accounting profession whereby the Securities and Exchange Commission was “given statutory authority to set accounting standards and oversight over the Activities of the auditors…the role of establishing standards was left to the accounting profession” (CPCAF). One of the key changes in internal audits is that the “Act requires all financial reports to include an internal control report” (Sarbanes...
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...VISY PULP AND PAPER PTY LTD ENVIRONMENTAL ASSESSMENT FOR A MAJOR PROJECT TUMUT MILL EXPANSION 436 Gadara Road, Tumut, New South Wales January 2007 H:\Environmental\VPP9 Stage 2\Stage 2\FINAL EA SUBMISSION\Main Report\Visy Tumut Final Env Assessment Main Report.doc Environmental Assessment Submission Under Part 3A of the Environmental Planning and Assessment Act 1979 Statement by Authors Environmental Assessment Prepared By: Name Ms Leanne Hayes Company Visy Pulp and Paper Pty Ltd Position Project Environmental Engineer Qualifications BSc Environmental Biology Address 436 Gadara Road, Tumut, New South Wales, 2720 Co-authored and Reviewed By: Name Ms Alison McRae Company Peter J Ramsay and Associates Pty Ltd Position Associate Qualifications Bachelor of Engineering (Environmental), Bachelor of Commerce Address 3/538 Gardeners Road, Alexandria, New South Wales, 2015 Project Under Part 3A: Application Number 06_0195 Development Visy Pulp and Paper Tumut, Mill Expansion Development Location 436 Gadara Road, Tumut, New South Wales, 2720 Proponent Visy Pulp and Paper Pty Ltd PO Box 98 Tumut, New South Wales, 2720 Certification: I certify that I have prepared this Environmental Assessment report and that to the best of my knowledge: it has been prepared in accordance with Part 3A of the Environmental Planning and Assessment Act and Regulations; and the information...
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