...Usefulness of having audit committee. The first one is audit committee can improve the auditor’s independence. Audit committee is the body responsible for overseeing the company’s relations with the external auditor. Therefore, audit committee help in ensuring that there is no conflicts of interest exist that might interfere with the auditor's ability to issue its opinion on the financial statements. Thus, they may help in improving the independence of external auditor. Next, audit committee can improve the objectivity and credibility of financial reporting. This is because, audit committee can periodically meet with the government’s chief executive and financial officers to review, monitor and direct activities. This will help in improving the maintenance of internal controls and preparation of financial reports Furthermore, audit committee also can help to improve the communications among auditors, directors and management. They help in resolving any disagreements regarding financial reporting between management and the auditor. Thus, through this, the quality of audits and accounting functions also can be improved. Besides that, audit committee may deter executive directors from creative accounting and illegal acts such as fraud. It is part of their role in the prevention, deterrence, and detection of fraud. Audit committee also can help in encouraging the government organization to establish an effective ethics and compliance program. In order to ensure that the appropriate...
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...Problem 2-7 Since the Sarbanes-Oxley Act of 2002 (SOX), the PCAOB is responsible for establishing the auditing standards for public companies, whereas the AICPA (Auditing Standards Board)is responsible for private companies. Prior to the SOX, the AICPA was responsible to establish auditing standards for both private and public companies. . Problem 2-10 Although the generally accepted auditing standards are quite general, it is probably best to keep them that way rather than having specific audit guidelines. I believe this is the best way to set the standards because it would still allow the CPA to make a professional judgment by applying their understanding of GAAP. In addition, having specific standards would probably make it harder for CPAs to comply to very technical standards. They would have less room to make an interpretation of GAAP. Problem 2-16 a. 1) b. 2) c. 3) d. 3) Problem 2-20 a. Since Rossi and Montgomery, CPA never had a client go public before, it would probably be a challenge for them to perform all the audit work for a public company since there are more requirements of the company to file with the SEC. The firm needs to assess whether they have the proper staff and training to audit a public client. Also the CPA firm cannot perform any more consulting or accounting services for the audit client since it is not allowed under the PCAOB audit standards. b. The auditors would have to complete the registration of the company...
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...ACCT555 External Auditing(TCO B) The following is a portion of a qualified scope and opinion report due to a scope restriction. (Note: A separate report was issued on the effectiveness of internal control over financial reporting.) Independent Auditor's ReportTo the shareholders of Fast Times Corporation,We have audited the accompanying balance sheet of Fast Times Corporation as of September 30, 2009, and the related statements of income, retained earnings, and cash flows for the past year. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.Except as discussed in the following paragraph, we conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.We were unable to obtain audited financial statements supporting the company's investment in a foreign affiliate stated at $1,040...
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...CHAPTER 1 AN INTRODUCTION TO ASSURANCE AND FINANCIAL STATEMENT AUDITING Answers to Multiple-Choice Questions 1-13 | b | | 1-19 | a | 1-14 | b | | 1-20 | d | 1-15 | c | | 1-21 | d | 1-16 | c | | 1-22 | d | 1-17 | c | | 1-23 | b | 1-18 | c | | | | Solutions to Problems 1-24 The memo should cite the following facts: * There is a historical relationship between accounting and auditing. * When parties to the agency relationship (contract) do not possess the same amount of information (information asymmetry) there is a natural conflict of interest between the parties. For example, when an owner and manager are negotiating an employment contract, the owner may assume that the manager likely will use organizational funds for personal uses. Auditing plays an important role in such relationships. The owner and manager will consummate an employment contract only if the manager agrees to be monitored. Auditing can be used to monitor the contract agreed to by the two parties. (P.S. As an attorney, Lee should be well versed on contract law.) * ...
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...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.S. legislative to respond the scandal, enacting Sarbanes-Oxley Act 2002. SOX Act carried out comprehensive reform of accounting procedures required for publicly held companies, such as promoting and improving the quality and transparency of financial reporting by internal and external auditors. However, there is a controversial issue of whether auditors should be responsible for detecting client fraud. AU Section 110(Responsibilities and Functions of the Independent Auditor) indicates that “the auditor has a responsibility to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud.” In other words, auditors are not expected to provide absolute assurance financial statements because auditors do not examine every transaction and event. The public, however, expect auditor to guarantee all material misstatements. While users who use the reported financial statements expect all illegal issues such as fraud to be detected...
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...An automated external defibrillator (AED) is a lightweight portable device that delivers an electric shock to the heart after sudden cardiac arrest (SCA). The shock is needed to reset the heart after SCA. Cardiac arrest is a condition wherein the heart produces irregular rhythm and then stops beating. This is a medical emergency as the blood flow to the brain and internal organs will cease. If no immediate care is done for individuals having sudden cardiac arrest, the chances of survival will decrease since the condition may result in death within minutes. Automated external defibrillators make it possible for people to respond immediately to individuals that are having sudden cardiac arrest. This is one of the tools used by emergency medical responders and is used to provide electrical shock to “shockable” heart rhythms. What are “shockable” heart rhythms? The heart has its own electrical system that triggers the contraction of the heart muscles. It is responsible for the control of all of the events that occur in the heart during pumping out of blood to the circulation. When there are problems within the heart, blood vessels and electrolytes may cause a disruption of the electrical system and may result in arrhythmia. Arrhythmias are problems with the conduction of electricity in the heart that causes abnormal heart rhythms. There are a number of arrhythmias but not all of them are treated with defibrillation. The only “shockable” arrhythmias are pulseless ventricular...
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...Discuss whether the 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...
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...n-line assignment 8 Fin 640 Farhad Rahaman Johnson and Johnson Bond information Morningstar Credit Rating Amt Outstanding Issuer Type Issuer Domicile Debt/Assets Sector AAA $19.8 Bil Corporate United States 16.49 % Healthcare http://quicktake.morningstar.com/stocknet/bonds.aspx?symbol=jnj ABT bond information Morningstar Credit Rating Amt Outstanding Issuer Type Issuer Domicile Debt/Assets Sector AA+ $12.5 Bil Corporate United States 30.47 % Healthcare http://quicktake.morningstar.com/stocknet/bonds.aspx?symbol=abt Proctor and Gamble Bond information Morningstar Credit Rating Amt Outstanding Issuer Type Issuer Domicile Debt/Assets Sector AA $21.4 Bil Corporate United States 23.01 % Consumer Defensive http://quicktake.morningstar.com/stocknet/bonds.aspx?symbol=pg Bond information Of GSK MAY 7, 2008, 6:43 AM Glaxo Raise $9 Billion in Bond Sale By DEALBOOK GlaxoSmithKline, the drugmaker with a U.S. headquarters in Philadelphia, has raised $9 billion in the largest U.S. corporate-bond sale in six years. The offering included $2.5 billion of 5-year, 4.85 percent notes; $2.75 billion each of 10-year, 5.65 percent debt, and 30-year, 6.375 percent bonds; and $1 billion of two-year floating-rate notes, according to data compiled by Bloomberg. Corporate-bond sales have topped $30 billion in the last three weeks as firms have taken advantage of lower borrowing costs, according to Bloomberg data. Borrowers sold $14.6 billion in investment-grade bonds...
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...External Environment Table of Contents Introduction 2 External Environment: laying the foundations 2 Task Environment 3 General Environment 4 Non-Profit vs. For-Profit: perspectives on competition 5 Environment Characteristics 6 Opportunity or Threat? 8 Conclusion 8 References 10 Introduction “No organization can exist in a vacuum” (“Key forces in the external environment, Chapter 3”, n.d.). To a certain extent all types of organisations; whether private or public services, governmental bodies or charitable groups, are subject to and influenced by specific environmental factors. In this day and age with many existing classes of organisations utilising different approaches to management, there is a feasible assumption that a common change in the organisational environment may likely affect two separate organisations diversely. This response will identify how the environment directly impacts organisations, in relation to leadership roles and organisational performance. For the purpose of comparison, the point of focus will revolve around two major classes of organisations namely; ‘profitable’ verses ‘not-for-profit’ groups. The primary aim of this paper is to construct a foundational view of the external environment from a manager’s perspective. Theoretical key principles discussed will attempt to identify with the following statement - “In comparison to profitable groups; not-for-profit groups possess a different degree of vulnerability...
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...Internal and external affects the four functions of management Sherron Morrison, Jose Garcia, Melton Horne, James Gatson, Marisa Doporto MGT/230 April 30, 2014 Professor Mario Madrid Internal and external affects the four functions of management Introduction How does the human body operate? That is a complex question, because the human body responds differently due to internal and external factors. These same rules apply to management. The factors that affect management are planning, organizing, leading, and controlling. There are many moving parts and all of these pieces must work cohesively together for an organization, or body to exist. Management ensures that each branch is functioning properly or making the necessary changes to increase productivity. Throughout history, many organizations had to adapt to these internal and external factors due to globalization, technology, innovations, diversity, and ethics. An idea starts as a seed and that seed grows into a tree. Just as a tree, the idea branches out as it ages. The same theory applies when it comes to globalization. One would hope that his or her idea would multiply and flourish. To do so, one must properly plan for the proposed growth that they hope to attain. This feat requires organization of the internal resources to ensure stabilization of future growth. Just as the tree grows taller, it also grows wider to support the addition weight. The internal leadership must oversee and forecast the addition...
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...XEROX; Internal and External Factors Yumi Apaez MGT/230 Management Theory and Practice November 9, 2015 Mary Tytran XEROX; Internal and External Factors There are several factors that management has to take into consideration when attempting to run a successful company or business. There are external and internal factors that may potentially affect the four functions of management. The management team of companies and businesses may have to deal with external factors such as regulations, any potential competition and customer demand. These companies and businesses must have knowledge of all policies, human resources and cultural differences. Those are just a few external and internal factors that affect the four functions of management. External Factors There are external factors that companies and businesses should take into consideration which are competitors, suppliers and customers. Management and their team has to have knowledge of the environment and area their business are ran. It is also important to know the ins and outs of the economical side. Competitors are out there everywhere and management should know about it. There is a lot of competition in the business world. Suppliers compete for business and management has to make sound decisions on which suppliers to use. Sometimes the least expensive suppliers are not always the better. You get what you pay for. Knowing the demographics or the different regions is also essential. You have...
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...3) What is the external imbalance refer to, why is it an issue in EZ/ And how it is related to the saving, investment relationship as discussed in the open economy chapters of the textbook? External imbalances refers to a situation where some countries have current account surpluses compared to other countries with current account deficits. External Imbalances are reflected in trade imbalances(which are driven by labor wage differentials, competitiveness differences and differences in absorption), current account imbalances and external debt. Since the formulation of the EUROZONE, there has been a difference of sorts, some countries for example Germany and France have benefitted and saw persistence gains in price and cost competitiveness while other countries like Greece and Portugal have showed tremendous losses. At the same time, some countries have experienced a surplus in their current account balances whereas some countries have accumulated very large deficits, which resulted in the depreciation of net foreign asset positions. If this prevails, this can act as a worry since persistent losses in competitiveness and mounting external imbalances not only increase the economic and financial vulnerability of individual countries but can act as a deterrence for the functioning of the euro area as a whole. The euro area has come under severe pressure which was triggered by the adjustments in the fiscal accounts of Greece, the crisis which had further spread to countries like...
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...Table of Contents Introduction 2 External Environment: laying the foundations 2 Task Environment 3 General Environment 4 Non-Profit vs. For-Profit: perspectives on competition 5 Environment Characteristics 6 Opportunity or Threat? 8 Conclusion 8 References 10 Introduction “No organization can exist in a vacuum” (“Key forces in the external environment, Chapter 3”, n.d.). To a certain extent all types of organisations; whether private or public services, governmental bodies or charitable groups, are subject to and influenced by specific environmental factors. In this day and age with many existing classes of organisations utilising different approaches to management, there is a feasible assumption that a common change in the organisational environment may likely affect two separate organisations diversely. This response will identify how the environment directly impacts organisations, in relation to leadership roles and organisational performance. For the purpose of comparison, the point of focus will revolve around two major classes of organisations namely; ‘profitable’ verses ‘not-for-profit’ groups. The primary aim of this paper is to construct a foundational view of the external environment from a manager’s perspective. Theoretical key principles discussed will attempt to identify with the following statement - “In comparison to profitable groups; not-for-profit groups possess a different...
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...Internal and External factors paper Elizabeth Sanchez MGT/230 Feburary 25, 2014 Mary Roberson Internal and External factors paper Capital One is one of the United States top 10th largest holding banks which specialize in credit cards, auto loans, home loans, savings and banking. With over 963 Capital One Bank Branches across the U.S which includes their 9 Café Style locations known to their customers as the Capital One 360 Brand. They also provide well over 2,000 ATMS throughout the U.S as well as providing banking in Canada and the United Kingdom. Capital One is striving to keep up with today’s demand on easy, accessible, high speed and agile technology that may benefit not only their customers but those of their employees so that they may be to provide their customers needs. Capital One aims to meet technology demands of their internal and external customers as well as employees to keep them in control of their financial needs. One of their major technology add on was that of licensing MarketSwitch Corporation, which is the first multi-dimensional customer optimization system analyzes both their outbound and inbound campaigns which provides valuable help to bring the right product to the right consumer. Technology will continue to change and Capital One will continue to make their innovating changes to meet their internal and external consumers to banking simple, fast and worry-free. REFERNCES http://search.proquest.com.ezproxy.apollolibrary.com/dohttp://search...
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...judge a person by external appearance, because it’s easy and direct, and it’s instinctive. Appearance is a very important aspect of a person and reflects one’s personalities. Sometime you call tell the person’s characterizes from his appearance. However, in most cases, you cannot tell exactly what the person is life just from the external appearance, and ethically, we should not judge a person just be one glance at his external appearance. “Beauty and beast” and “Snow white and seven dwarves” are two stories that are almost known by everyone. Although there are fables, there is deep meaning inside them. What you can learn from them is that people that are not so good-looking can be very good people internally. And actually there are tons of examples in reality. Napoleon is a very short guy, but he was one of the most famous in the history. Theodore Roosevelt, former US president during World War II, is handicapped; but he is one of the most successful presidents in American history. So how can you tell about the people from their external appearance? Moreover, there are other inedible facts that show that a beautiful person may be rotten inside. There are any many prostitutes on the busy streets. It’s obviously that they are very beautiful, but are they really righteous people? A beautiful appearance is a good thing, but righteous heart is more valuable. Finally, as we can see, its’ out of question that we should not judge people just from their external appearance. The most...
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