...on the date of shipment. However, the customer requested that Excello hold on to the product until January 11, 2011, because Data Equipment lacked the warehouse capacity to hold the product until then. The firm must adhere to all the laws and other regulations as set. Among the regulations include Generally Accepted Accounting Principles (GAAP), Sarbanes-Oxley Act of 2002 (SOX), and AICPA code of conduct. The rules impact the mechanism, of financial reporting in the company and also help sin the actions of major principles of accounting. As a result of this, the accounting team must ensure they get the best method that will help in maximizing g the wealth of the shareholders. Albeit the earnings estimates could be gotten through the adoption of illegal treatment of accounting books, it would not be of more help to the firm as it would be more disastrous when the Wall Street detected it. There are a number of rules that Excello must follow to comply with if it is to fall in line with accounting actions, especially when it comes to posting dealing as well as financial statements. Some of the regulations include the SOX act of 2002, the GAAP as well as the AICPA Code of Conduct. Excello’s...
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...TO: CEO FROM: Student XXX DATE: October 22, 2012 SUBJECT: Professional responsibilities of a CPA and the difference between a review and an audit. Difference between a review and an audit. An audit expresses an opinion on the financial statements. Its primary goal is to see if the financial statements contain material misstatements. In an audit, the auditor would sample and test transactions, confirm receivables and more to check internal controls and accounting procedures. A review only expresses a limited assurance that the financials have been put together properly. The primary goal of a review attestation engagement is to express limited assurance that no material changes should be made to the financial statement in order for them to be in conformity with general accepted accounting principles. During the course of a review, the auditor would perform limited procedures and inquiries, less than a formal audit. An example is performing analytical procedures on the financial statements. The reviewer would compute the traditional ratios for liquidity, solvency, turnover, and profitability to see if they have changed from the prior year or expected relationships. If they have, the reviewing auditor would ask about why and see if the explanation made sense given the rest of the data available and their understanding of the activity during the period. Professional responsibilities as a CPA I am responsible to exercise professional judgment to determine allocations, valuations...
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...by using unethical accounting practices to make it look like the company was making more money than it actually did. It is important for hospitality managers because it makes them more accountable for making sure the business is operating smoothly and that they do what is best to make the business profitable. The yalso will be checked to see if the financial numbers are correct so the managers need to make sure there accountant is doing a good job. This regulation is important to keep the integrity of a business and to not allow what happen with companies such as Enron that caused a catastrophe in the market place because of the lies and deception of their bad accounting tactics. If Juan follows the GAAP principle the amount of 85,000 should be recorded on a balance sheet, because on a balance sheet there is an part to record the amount under the category Furniture, Fixture, and Equipment (FF&E). The Accounting Principle used in this recording is called a Monetary Unit Assumption because it measures economic activities and transaction in U.S. Dollars. Manuel will not need a different account if he uses the Revenue Recognition Principle because revenues are recognized as soon as a product has been sold, or a service has been performed. If I was Samantha I would wait until the group actually takes the trip before recognizing the revenue. There could be a serious emergency and anything...
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...| | | | | | |[pic] | | | | | |UCD School of Business | | | | | |Accountancy Subject Area ...
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...rules that Excello must follow to comply with if it is to fall in line with accounting actions, especially when it comes to posting dealing as well as financial statements. Some of the regulations include the SOX act of 2002, the GAAP as well as the AICPA Code of Conduct. Excello’s accounting team must take into account the laws and regulations to make the best decision that will be legal, ethical and honest for the organization as well as its clients and vendors. The Sarbanes-Oxley (SOX) act of 2002 was created in reaction to the accounting scams of WorldCom and Enron. The act is a body of provisions that provide guidelines on the responsibilities of the higher management as well as penalties for unethical activities. The CFO of Excello, Terry Reed, wanted to post the sale of $1.2 million of equipment before the end of 2010. This type of transaction would typically be recorded as a sale on the date of shipment; however, Data Equipment Systems did not have the room to keep the stock. If Reed records the $1.2 million sale in 2010 instead of 2011, he deceives the internal and external users of the financial reports by artificially inflating the end of year reports for 2010. This is an ethical breach as well as an impropriety against GAAP standards. If Excello inflates earned...
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... HCS/405 30 June, 2014 Reporting Practices and Ethics The accounting staff is a very large part of the healthcare industry. Accounting staff code and bill products and different services that are offered at that location and maintaining an ethical culture is imperative. There are accounting principles and standards and procedures that are part of the General Accepted Accounting Principles (GAAP). The GAAP principles have four key elements: Planning, Controlling, Organizing and Directing and Decision Making. Ethical Components and GAAP Accounting is the backbone of any medical organization because of it enormous impact on running as a cost effective organization. Every organization runs on its own set of principles and goals, but most are certainly guided by different federal, state, and government laws. There are accounting principles and standards and procedures that are part of the General Accepted Accounting Principles (GAAP). The GAAP principles have four key elements: Planning, Controlling, Organizing and Directing and Decision Making. The GAAP principle of Planning includes ways of setting goals and guidelines for the future of the organization. The principle of Controlling involves ensuring that planned goals are on track with previous goals and also that there is room to fix any issues that may arise. Organization and directing is to make sure that the organizations full potential is being provided and focuses on management on a day-to-day basis...
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...Financial management is very essential for health care organization’s to succeed and accomplish goals. As a financial management has a major aspect on how it incorporates the ethical standards and proper reporting practices. To report practices and ethical standards in health care finance assist financial managers in conducting. They conduct effect analysis of the organization’s revenues, expenses, assets, and much more. In the next few paragraphs in the paper will be discussed is the four elements of financial management, the accepted accounting principles, and a few general financial, ethical standards will conduct. Plus, there would be examples of conduct and financial reporting practices in the health care organizations from other articles that will be discussed. The four elements of financial management are planning, controlling, organizing and directing, and decision making. The first element, planning is to set up the health care organization goals and objectives. Then to see what steps have to take and which steps would be more effective to achieve the goal. The second element is controlling; as a financial management will need to consist of verifying whether the department is following the plans, instructions issued, and the principles established. The third element is organizing and directing; which this can be a process that follows planning and controlling element in the health care organizations. While organizing established how resources can be effective...
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...Case analysis 3 Chao Yao Major case 1 Adelphia Communications Corporation 1. What are the facts? In September 2005, the SEC charged Dearlove, a certified public accountant and formerly a partner with the accounting firm Deloitte& Touche LLP, with the improper conduct resulting in a violation of applicable professional standards. On July 24, 2009, the U.S. Court of Appeals for the District of Columbia supported the finding of the SEC that Dearlove engaged improper professional conduct. SEC found that Adelphia’s financial statements were not in accordance with the general accepted accounting principles and Dearlove violated general accepted auditing standards. The Adelphia communications Corporation was one of the largest cable television companies in the United States. Prior to 2000, the SEC found large amount Co-borrowed debt inside the company and its affiliated entities. After the big Enron scandal, SEC required public company to disclose the related-party transactions. As Adelphia disclosed its obligations as co-debtor with the Rigas entities, the stoke price of company declined sharply and finally was delisted from the NASDAQ. 2. What are the ethical issues? Dearlove had engaged in unreasonable conduct, such as approval of the Adelphia’s method of accounting for related-party transactions. His behaviors resulted in a violation of applicable professional standards. Deloitte, who engaged in auditing Adelphia, did not issued a fair auditor’s report. Adelphia...
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...77–92 American Accounting Association DOI: 10.2308/iace-50298 Going Concern Designations and GAAP versus Non-GAAP Earnings Metrics James L. Bierstaker, Thomas F. Monahan, and Michael F. Peters ABSTRACT: Many students have not spent much time studying or contemplating the importance of non-GAAP (Generally Accepted Accounting Principles) earnings to the ‘‘Street.’’ Based on the facts of an actual company and utilizing the financial information drawn from this company’s 10-K and Earnings Release, this case introduces students to the strengths and weaknesses of GAAP and non-GAAP earnings measures, and why the Street might be more interested in cash and recurring earnings in attempting to predict movements in stock price. It also provides the instructor with an opportunity to discuss the dangers of allowing firms to emphasize earnings in their press releases that are not defined by an external authoritative body (such as the Financial Accounting Standards Board [FASB]), and how this can hurt the consistency and reliability of reporting. This is an important discussion, since regulators have recently formally proposed to include non-GAAP measures in their overhaul of the auditor reporting model (Public Company Accounting Oversight Board [PCAOB] 2011). The case also familiarizes students with current auditing guidelines dealing with the going concern decision and the potential role that non-GAAP earnings can play in this decision. Thus, the three primary learning objectives are to teach...
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...objectives although some are made on generally accepted accounting principles). So the question I would ask is this “How good is the financial management of our health care organizations and do they hold a good financial reporting records”? GAAP The generally accepted accounting principles (GAAP) are considered as the framework of guidelines for the financial accounting and jurisdiction of all accounting standards. With these accounting standards the GAAP includes such things like standards, conventions and the rules the organization accountant follows when during a copy and summarizing all the transactions when doing the work on preparing the financial statements. All third parties that are involved with the reports must then rely on the information to be free from all bias and inconsistency without debate or not so GAAP standards are followed. All business states that, “generally accepted accounting principles are guidelines precisely, are a group objectives and conventions that have been set up permanently over time to set how financial statements are prepared and presented (FASAB, 2010). All organizations that do the dealing with any type of financial data must act in accordance with GAAP standards so that outside creditors can view their financial statements with any difficulty. Corporate Ethics In all groups composed there is a corporate...
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...Changes and Error Footnote Analysis According to Nike’s most recent 10K for fiscal year-ending (FYE) 2009, Note 1 addresses key accounting principles and states there have been no recent changes in valuation methods foreitherinventory or depreciation. Nike does however mention that there were necessary steps taken to streamline management. Also, GAAP requires Nike to make numerous estimates that may have actual amounts that differ. According to Note 16, restructuring charges of $195 millionwere incurred to streamline management on Nike’s behalf. Additional costs are not expected to be incurred in future periods. Because this is an indirect cost of a change in accounting, the restructuring charge isincluded in corporate expense and pre-tax retained earningsin 2009 only, which is required under GAAP.Also, because this change was made by choice, the notes explain why, where, and when the change was made as well as the qualitative effects recorded. This meets all disclosure requirements by GAAP. According to Note 4, Nike made revisions to preliminary estimates, including valuations of tangible and intangible assets. Nike meets GAAP disclosure requirements by presenting the effect on income and per-share amounts. Nike goes on to mention in Note 15 thatcurrently there are nocommitments, contingencies, or legal proceedings to be estimated that they believe could have a material impact on future financial statements or operations. This disclosure is not required but could be...
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...Golden Bear Golf, Inc. The assertions that were relevant to Paragon’s construction projects are: existence and occurrence, completeness, valuation or allocation, and presentation and disclosure. Existence and occurrence: should have been used to test the revenue and gross profit on its construction projects. By testing to see if the assertion is appropriate to make sure that all revenue and gross profit exist would have brought the attention to the $4 million of un-invoiced construction costs that materialized at the end of fiscal 1997. This assertion test also would have revealed that the earned value method in practice was allowing Paragon to book much larger amounts of revenue and gross profit on its construction projects than it would have under the cost-to-cost method. Completeness: the SEC said that Sullivan and his subordinates should have rigorously tested Paragon’s large amounts of unbilled revenues at the end of 1997. A significant amount of unbilled revenue that is reported as complete should be tested to determine the reason no billing has been posted for the work that was done. It also should be determined the reason income is being recognized for jobs that have not been identified as works in progress to determine the exact completion date of the project. By testing this assertion it would have been discovered that $4 million of work was fictitious. Valuation or allocation: Paragon overstated its revenue and profits by using the earned value method which...
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...Running Head: Accounting Principles and Ethics Article Accounting Principles and Ethics Articles Myrthe SaintLouis HCS/457 November 30, 2009 Victoria Odom Abstract A healthcare organization is one of the most successful business inside of a healthcare organization theres so many different profession within, from healthcare providers such as physician, nurses ,Medical assistants and so many more. .A healthcare organization also provide care, , consistency, and support.In addition to care being providing in health care Financial management is another important assets in healthcare organization. With todays econmy crisis healthcare organization face many financial issues for example, Decreasing revenues, increasing costs and terminating healthcare workers .Being a Mananager,Administrator in a healthcare organization is not a easy job because they have to ready lead in today’s climate and also position their organizations for later financial issues and potential political changes. . In order to have an effective financial management, organization, many health care organizations use the Generally Accepted Accounting Principles, corporate compliance, and the value of ethics. Accounting Principles and Ethics Articles A healthcare organization is one of the most successful business inside of a healthcare organization theres so many different profession within, from healthcare providers such as physician, nurses ,Medical assistants and...
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...PEST Analysis for the Apple Smartphone 1) Political Environment From the political point of view Italy is an ideal country where to export our product. It has good international relationships, especially with other EU countries where we are already present and with the USA. There are no restrictions to the importation or the exportation of capitals and goods. The accounting system follows the International Accounting Standards (IAS), the same adopted by all EU countries, and quite similar to the American’s General Accepted Accounting Principles (GAAP). There is a stable political regime with a multi-party system, which can ensure the certainty of law and the respect of contractual rights. However lawsuits tend to be lasting and expensive, and this could represent a risk in case of a contractual breach. 2) Economic Environment The Italian Economic Environment is also quite good for our project. Italian economy is based on services and industry. The per capita GDP is $30.200, that is not high as in the United States ($44.000), but which is however enough to ensure the population with the possibility to save some of their budget for the acquisition of expensive products. In addition income is better distributed than in the US: looking at the Gini Index, Italy has a 36 and US have a 45 (where 0 means equally distributed and 100 means unequally distributed). If we bear in mind the different dimensions of the two countries all the other economic indicators can be considered...
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...The FASB is working on a standard, “The Hierarchy of Generally Accepted Accounting Principles,” that defines the meaning of generally accepted accounting principles. This standard identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements. The standard categorizes the major sources of GAAP as follows: FASB Standards, Interpretations, and Staff Positions; APB Opinions; and AICPA Accounting Research Bulletins (Kieso,D.E., pp.12) As stated in FASB Concepts Statement No.2, “the qualities that distinguish better” (more useful) information from “inferior” (less useful) information are primarily the qualities of relevance and reliability, with some other characteristics that those qualities imply (Kieso,D.E., p.11).Good accounting information is described as the primary and secondary qualities which are relevance, reliability, verifiable information, comparability and consistency are all important. Relevance is important since it must have a bearing on a decision. Otherwise the information is useless to the user. Reliable information is verifiable, a faithful representation, and is reasonably free of error and bias. Verifiable information allows varies individuals to reach the same conclusions about the same information. The same conclusion must be met if not the information is not verifiable. Information that is useful, accurate, and tested is what investors trust they are receiving from quality...
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