financial statements can rely on the information and be able to make decisions for investment purposes. It also helps management make sure the company is profitable as well as following rules and regulations of the accounting standards and policies. Auditing accounts are done to protect the investors, shareholders, banks, and to give assurance that the information is true and correct. Account types such as inventory, accounts payable, property, plant and equipment are not required
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2-27 A. Identify and describe Reed’s responsibilities to detect Smith’s errors and fraud. Do not identify specific audit procedures. After his meeting with Smith Company’s new management and predecessor auditor, he is now made aware of possible fraud in the financial statements. With this knowledge, he is now responsible to take steps to identify the errors due to fraud in the financial statements. Initially, Reed and his audit team should assess the risks within Smith Company such as
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fatigue, and carelessness still can occur. –Management override, -collusion among people. Additionally, internal control is subject to cost-benefit considerations. Internal control could be making perfectly, but at great expense. In the professional auditing standards, the concept reasonable assurance recognizes that the
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Week 5 Reflection Team A ACC/291 February 29, 2013 Steven Marantz Weekly Reflection We covered very interesting topics in week three and four. The students were asked to discuss topics which they felt comfortable with, the topic they may have struggled with, and how the weekly topics related to the application of their field. The students of team A have some similar pertaining to the weekly reading assignment and some that
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3-51. Koss management might have placed so much trust in Sachdeva without oversight and monitoring for a variety of reasons: possibly the cost of establishing, implementing and maintaining internal controls seemed prohibitive to the company. Sachdeva could also have had one of those faces that seem like she should be trustworthy, so they didn’t feel the need to monitor her activities. Grant Thornton should have seen the large variances in the cost of goods sold account and done some vouching of
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Opinion Shopping Who are the stakeholders involved in this situation? Investors/Shareholders In terms of auditor switching, shareholders are dependent on the reliability of audit opinions on the financial reporting of management. Shareholders rely heavily on the quality of audits in valuing their shareholder wealth and making advised business decisions. The Board/ Audit Committee The directors are elected by the shareholders and are responsible for representing shareholders best
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Katy Chilton Danle Case 08-9 Case 08-9 Fraud and Illegal Acts We have been hired to perform an audit of Jersey Johnnie’s Surfboards Inc. (the “Company”), which is an SEC registrant. Before completing the December 31, 2005, audit of the Company, Harry Hodad, the engagement partner, received a call from Tom Tube, the Company’s director of ethics and compliance. Mr. Tube said that the Company’s outside service provider that receives calls to the Company’s ethics and compliance hotline had informed
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Street, Burlington, Ontario L1L 1L1 Dear Dr. Simcoe: We have been engaged to audit the financial statements of Brant Animal Hospital Professional Corporation (“the Company”) for the year ended December 31, 2007. Canadian Generally Accepted Auditing Standards (GAAS) requires us to communicate at least annually with you regarding all relationships between the Company and us that, in our professional judgment, may reasonably be thought to bear on our independence. In determining which relationships
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You have been with Zaird & Associates for approximately three months and are completing your work on the BizCaz audit. BizCaz produces pullover knit shirts to address the business casual market for both men and women. Although your experience has been limited, an unexpected staff resignation has resulted in your working directly with the engagement's in-charge senior on inventory. This has been a learning experience for you, because you have helped perform various tests of controls which may
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Gene One Strategy The basis of the business strategy for Gene One has three criteria: 1. 3-yr timetable 2. 40% growth within the prescribed time-table 3. Acquire additional funding so more products can be developed Greg has identified that the Executive Board and the current leaders are not within Sarbanes Oxley Act of 2002 (SOX). The act is a United States Federal Law that set new or enhanced standards for all U.S. public company boards, management and public accounting firms. It is named
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