"Accounting / Auditing" Essays

SUMMARY:  The practice of financial accounting (or accountancy) entails thoroughly and systematically documenting the monetary transactions of a person, organization, corporation, or business.

A financial expert who practices accounting on a professional level and receives payment for his/her services is called an "accounttant" (or "bookkeeper").  Proper accounting generally requires such an expert to compile, analyze, audit, summarize, and report financial data to government bodies, regulators, oversight committees, and/or tax collection agencies (such as the IRS, or Internal Revenue Service).

The financial statements that accountants produce are legally-binding records that aggregate and summarize a major corporation's financial position, cash flow, and operations during what is usually a regularly scheduled time period (quarterly, bi-yearly, or yearly).  These documents succinctly summarize the hundreds—if not thousands—of financial transactions that the given entity completed during the time period in question.

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Cardsmax the Accounting and Auditing Essay

Essay  |  3 pages (954 words)
Bibliography Sources: 1


Disclosure of this information during the audit stage would have made things easier; however there is no quick fix for the issues that are brought about. Now the validity of the company is in question with little data to support the existence of this business at a specific time period. This could also bring about other legal issues regarding fees and specification that were not met dealing with the actual date that the business was started and legally doing business in its state.

The issues were clear and it became an issue as to how these problems could in fact be rectified. The Omni Revenue was bogus, and there was no information available to support the validity of Omni Data's existence. Again, the fact that the Omni contract was signed months before the business had been incorporated also give way to issues with if the business itself was operating legally when it acquired the Omni Data account. The inability to find a verifiable president of Omni Data too leads for a need to further investigate the validity of any transactions that took place under this client name. The Locate Plus' Audit Committee Chairman had a conflict of interest because he had pledged assets to secure a loan to Latorella; in addition Latorella had been buying off Locate Plus' Audit Committee Chairman through extending him high interest loans (at 30% to 40%). Lastly, a revolving line of credit with Locate Plus, was not Identified as a related party, and was owned and controlled by Fields and Latorella.

During the 2005-year-end audit, L&H failed to competently evaluate the reliability of the audit evidence obtained by the confirmation process. First, L&H initially sent its confirmation to the President of Omni Data -- a person alleged by the informant to be a "stooge" of Latorella -- at the address Locate Plus had provided. Moreover, the confirmation was initially returned to L&H by the U.S. Postal Service as "undeliverable." Ultimately, a confirmation was received, signed by a person purporting to be President of Omni Data. During the 2006-year-end audit, the confirmation sent to the Omni Data address that Locate Plus had provided was again returned as "undeliverable" (Securities Exchange Act of 1913). Here is a conclusive list of the areas of violation. Failure to adequately test the Omni Data Revenue and Receivables, Failure to adequately plan the 2005 and 2006-Year-End Audits, Failure to Competently Evaluate Evidence Obtained by the Confirmation Process, Failure to Assess the Risk of Material Misstatement Due to the Omni Data Transaction, Failure to Use Due Professional Care and Exercise Skepticism, and Failure to Issue Accurate Audit Reports.

Work Cited

Securities Exchange Act of 1913, USA before the SEC § et…… [read more]

Forensic Accounting in Practice Research Paper

Research Paper  |  5 pages (1,557 words)
Bibliography Sources: 5


Forensic accountant must possess accounting skills, auditing skills, business skills, know investigative techniques, and have a clear understanding of human behavior. Each skill is applied to business operations and is used in the courtroom environment. These skills are vital in obtaining evidence needed by business and court cases in identifying fraud and prosecuting it. The forensic accountant must know how… [read more]

Business and Leadership Peter Northouse Term Paper

Term Paper  |  6 pages (1,552 words)
Bibliography Sources: 1+


We all worked very hard during tax seasons, but everybody knows we could make up the time once the tax season is over. Hence, my firm has very low turn-over rate unlike the big accounting firms, high turn-over rate has always been a big problem. The clients want to see and work with familiar faces, and we want a steady workforce. I believe that leaders must work to change the conditions in the world that they disagree with.

My next career move will be in five years when my children are in college. There are two possibilities, one is go back to China to teach what I have learned here in American. As the Chinese people (in China) are modernizing everyday they are anxious for more education and are desperate for expertise and experience from the West. Or my family has an education foundation in Hong Kong where we gather money and help to build or to improve the schools in the rural areas in China that I may go to work for. I can utilize my expertise to better manage the foundation, and also use my social and family connections to expand the functions of the foundations, such as teacher's training program or work to improve the medical facilities in the rural areas in China.


Bolman, L. & Deal, T. (2003).Reframing Organizations: Artistry, Choice, and Leadership. Boston: Jossey-Bass.

Northouse, P. (2003). Leadership: Theory and Practice. Los Angeles: Sage.… [read more]

Conservatism in Accounting Valuation Research Paper

Research Paper  |  18 pages (6,022 words)
Style: APA  |  Bibliography Sources: 20


Conservatism in Accounting Valuation

Accounting is used to determine the financial health of a business or individual. As such, it is carefully regulated and those who practice it for compensation are required to have education and certification. There are various rules, laws, and principles that govern the business of accounting and that are commonly used in order to ensure that… [read more]

Accounting Careers Term Paper

Term Paper  |  14 pages (3,822 words)
Bibliography Sources: 9


Public Accounting, Corporate Accounting and Governmental Accounting Careers

Career options that are available to entry-level accounting graduates include those of public accounting, corporate accounting and governmental accounting. Each of these vocational options are divided into more specialized areas of practice.

The purpose of this study is to examine and in-depth research study into the areas of accounting represented by the… [read more]

Accounting in Crisis Term Paper

Term Paper  |  2 pages (721 words)
Style: APA  |  Bibliography Sources: 2


Accounting in Crisis

Between December 2001 and July 2002, four major U.S. corporations -- Enron, Global Crossing, Adelphia and WorldCom filed for bankruptcy, constituting the most serious outbreak of corporate bankruptcies in U.S. history. These companies had hidden their true financial health from creditors and shareholders until an inability to meet financial commitments forced them to restate earnings that revealed massive losses, ultimately leading to a financial meltdown. Since most of the financial irregularities were committed by the management of the companies with the tacit or even active collusion of accountants and auditors, the prestige and public image of the accounting and profession plummeted to an all-time low. Egged on by government legislation such as the Sarbanes-Oakley Act of 2002 and stung by its own falling reputation, the auditing and accounting profession was forced to adapt to the changing environment. In this paper, I shall review the conditions which caused the role of accounting and auditing profession to change and what major changes occurred as a result of the accounting scandals.

Conditions that Caused the Changes

Even before the highly publicized financial scandals in the early 2000s, the accounting profession had seen a significant fall in its attractiveness among students, which was reflected in a 25% drop in award of accounting degrees in just 4 years from 1996 to 2001 in the United States (Inman qtd. By Colson, 2002, p. 21). Accounting education was slow to respond to the rapidly changing business environment and was perceived to be overly narrow in scope. As a result, most recruiting firms started to prefer hiring MBAs and professionals with general degrees for positions previously reserved for professional accountants. Even as the educators and accounting organizations were struggling to make the education of accountants and auditors more broad based and rigorous, the profession was hit by the double whammy of a downturn in the U.S. economy (exacerbated by the 9/11 terror attacks) and the high profile business scandals at Enron, WorldCom, and Global Crossing. Since almost all of the scandals involved filing of inaccurate and misleading financial statements prepared with the collusion of accounting firms and auditors, it was only natural that the prestige…… [read more]

State of Accounting Convergence Among Large Public Companies Research Proposal

Research Proposal  |  2 pages (608 words)
Style: Harvard  |  Bibliography Sources: 5


Accounting Convergence

The State of Accounting Convergence Among Large Public Companies

What are the reasons driving the state of accounting convergence in large public companies? It is believed that many companies are avoiding convergence because of cost considerations -- for example having to produce multiple sets of financial statements.

What are the motivations, weighted by importance, for large companies to reject the accounting standards convergence promoted by the IASB, FASB and SEC?

Overview/Description of the Problem

The IASB, FASB and SEC are promoting accounting convergence between national accounting standards and international accounting standards. This convergence is occurring in a number of countries, including the United States, European nations (Larson & Street, 2004) and China (Qu & Zhang, n.d.). The convergence process has met with resistance by corporations for a number of reasons. In order to better understand how convergence can be executed globally, the objections of publicly-traded corporations need to be better understood. At present, the current reasons for resistance to convergence on the part of large public companies are not well understood. This paper will investigate some of the objections in order to shed light on the nature of the resistance to accounting convergence.


The first step to addressing the research question will be to conduct a survey of the literature on accounting convergence. The literature will include official explanations of what convergence is and why it is being implemented (AICPA, 2011 & 2010). This will be the basis for the survey component of the study. The survey component will be conducted with members of large public company accounting departments, using the Delphi methodology of structured forecasting. The Delphi method is preferred because the two-round interview system is believed to deliver better responses than individual unstructured interviews. The objective is to uncover systemic issues with accounting convergence, rather than firm-specific ones. It…… [read more]

Accounting the Most Effective Means of Achieving Essay

Essay  |  9 pages (2,730 words)
Bibliography Sources: 9


¶ … Accounting the Most Effective Means of Achieving Accountability in Organizations

The term "accountability" can best be defined by Roberts and Scapens (1985) in the following manner: "Accountability in its broadest sense simply refers to the giving and demanding of reasons for conduct" (Roberts, 1991, P. 4). When connecting 'accountability' to accounting, they continue to observe that "accounting institutionalizes… [read more]

Ethics Ensuring Accounting Ethics Through Regulation Term Paper

Term Paper  |  2 pages (626 words)
Style: APA  |  Bibliography Sources: 2



Ensuring Accounting Ethics through Regulation

There is always the possibility for greed to reign supreme within the context of American capitalism. It is an unfortunate part of the free market system. Yet this immense greed which has cost shareholders dearly in recent scandals can be curbed with proper ethical regulations of corporate accounting practices. Through ethical accounting, the shareholders can rest easy knowing that their money is being handled with a sense of ethical responsibility.

In the midst of so many recent financial scandals and the money lost by the average consumers, it is clear that a tightening of the ropes within accounting practices was needed. Therefore, California recently answered this demand for a stricter enforcement of ethical accounting practices. According to a recent article from Central Valley Business Times, "accounting firms in California will be required to undergo peer review, Certified Public Accountants will take additional continuing education in ethic and consumers will be able to watch live webcasts of California Board of Accountancy meetings," (Central Valley Business Times 2009). This ensures a public responsibility in terms of the account practices of corporate businesses. Peer reviews helps ensure a strict regulation of accounting practices in order to keep the California businesses acting ethically in terms of their accounting practices ad responsibilities to their shareholders. Webcasts keep the public informed and keep the proceedings open. This then ensures that the company in question will be thoroughly providing ethical accounting practices in fear of publicly ruining their reputation with their consumers and shareholders.

"Under the peer review law, all California firms providing accounting auditing services will be required to undergo a periodic peer review," (Central Valley Business Times 2009). The article also describes how the bill forces California CPAs to continually take new courses, therefore providing them with the latest in ethical accounting practices and policies. This then ensures a more regulated and…… [read more]

External Auditing Essay

Essay  |  8 pages (2,414 words)
Bibliography Sources: 10


External Auditing

The role of external auditing on corporate governance corporations has increased dramatically over the past ten years. At the outset of the 21st century, auditing was still a somewhat minor consideration, something that was required but did not add significant value to the firm. The role of the auditor in corporate governance was never direct, but rather the… [read more]

Accountants Responsibility Term Paper

Term Paper  |  5 pages (1,744 words)
Style: APA  |  Bibliography Sources: 5


e. By distorting material information for selfish gains. Such scenarios call for the auditor or accountant to serve the interests of all the parties involved. By detecting irregularities, the auditor/accountant would have satisfied his responsibility to the client to ensure competence. By reporting the fraud, the auditor/accountant would have satisfied his responsibility to all third parties who intend to rely on the financial information as presented.


Bruner, P.L. & Haley, T.L. (Eds.). (2007). Managing and Litigating the Complex Surety Case (2nd ed.). New York, NY: ABA Publishing.

Duska, R. Duska, B.S., & Ragatz, J.A. (2011). Accounting Ethics (2nd ed.). Hoboken, NJ: John Wiley and Sons.

Newton, G.W. (2009). Bankruptcy and Insolvency Accounting: Practice and Procedure (7th ed.). Hoboken, NJ: John Wiley & Sons.

Perkins, S.S. (2004). CPA Duties of Confidentiality. Retrieved from http://www.nysscpa.org/trustedprof/404b/tp13.htm

Rosenthal, J. (2010). The Accountant-Client Privilege: Does it Exist? Retrieved from http://www.aicpa.org/publications/newsletters/aicpacpainsider/2010/june7/pages/theaccountant-clientprivilegedoesitexist.aspx

State Journal-Register. (2013). Dixon Sues Audit Firm for Failing to Detect Fraud. Retrieved from http://www.sj-r.com/x930795674/Dixon-sues-audit-firm-for-failing-to-detect-fraud

SEC. (2014). SEC Charges Five Executives and Finance Professionals behind Fraudulent Bond Offering by International Law Firm. Retrieved from http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370540889964#.UyUwmHeeZzj

SEC. (2012). SEC Charges China Affiliates of Big Four Accounting Firms with Violating U.S. Securities Laws in Refusing to Produce Documents. Retrieved from http://www.sec.gov/News/PressRelease/Detail/PressRelease/1365171486452#.UyUGr3eeZzg… [read more]

Texas Uniform CPA Exam Term Paper

Term Paper  |  10 pages (3,233 words)
Bibliography Sources: 10


¶ … Texas Uniform CPA Exam

While many people might know what a CPA is and what it stands for (Certified Public Accountant), this paper looks closely at the nuances of becoming a CPA and how those nuances pertain to this profession within the state of Texas. What the average person doesn't understand is that being given a CPA license… [read more]

Internal Auditing on Environmental Performance Can Enhance Organization's Value Research Proposal

Research Proposal  |  5 pages (1,450 words)
Bibliography Sources: 15


Life Cycle Analysis and Environmental Auditing

Life Cycle Analysis in Environmental Auditing and Organizational Value

The environmental impact audit is required in certain industries. However, it is becoming standard practices in industries where it is not required as well. The product life cycle has a tremendous impact on the environmental impact of the company. Products that have a short life… [read more]

Certified Public Accountants (Cpas) Are Found Term Paper

Term Paper  |  6 pages (1,546 words)
Bibliography Sources: 1+


Certified Public Accountants (CPAs) are found in many walks of life. They are the well-paid and often highly publicized (albeit sometimes for the wrong reasons) Chief Financial Officers (CFOs) of major corporations and advisors to smaller neighborhood businesses (CPA.net., 2004). They work for both large and small public accounting firms, and are typically well-respected strategic business advisors and decision-makers. CPAs… [read more]

CPA Profession the Accounting Term Paper

Term Paper  |  4 pages (1,296 words)
Bibliography Sources: 1+


Stricter auditing and accounting rules in the Act have created greater employment opportunities for CPAs and accounting firms. For example, previously only large publicly traded companies were required to comply with strict auditing and accounting standards. After Sarbanes-Oxley, even smaller private companies, especially those that deal regularly with banks and insurance companies, would be required to comply with the new rules.

Restoring Their Image

The CPA professionals and accounting organizations such as the AICPA have rallied effectively to counter the impression that the accounting profession was solely responsible for the business debacles. They have also taken effective steps to improve accounting standards and bolster the image of CPAs in the public and market players including the investors. The effectiveness of the efforts is reflected in a Princeton, N.J.-based Gallup poll conducted in December 2003 indicated that "the public image of the accounting profession has jumped more than any other during the year [2003]" (Quoted by Telberg)

Focus on Ethical Issue

The business scandals and their aftermath have focused the attention of politicians, corporate managers, as well as CPAs and their organizations about the promotion of an ethical business environment. The importance of ethics in accounting education, CPA examination and the licensing process is now widely recognized. Changes have been proposed in the CPA exams by increasing the emphasis on ethics and requiring candidates that have passed the CPA Exam to take a separate ethics exam.

Revival of the Auditing Function

In the 1990s, the accounting profession had de-emphasized the audit function in favor of accounting services to a large extent. This trend has reversed in the changed regulatory environment as more people than ever before now expect CPAs to detect and report fraud while reviewing financial statements. Although performing the role of the industry's watchdogs is a challenging task, the CPAs and their professional associations seem to be aware of the requirements and are taking the necessary steps for upgrading of the accountants' auditing skills.


After a prolonged slump in the 1980s and 90s, the accounting profession is poised for a strong comeback in the changed regulatory environment that followed the disastrous business scandals in 2001. Stricter auditing and accounting rules in the Sarbanes-Oxley Act and the high expectations of the corporate stakeholders about fraud detection have forced the CPAs to make the required adjustments in the educational model, examination and training of accountants. The changed circumstance has, on balance, changed the accounting profession for the better -- placing greater responsibility on the shoulders of CPAs but also creating more job and growth opportunities for the skilled professionals.

Works Cited

Colson, Robert H. "CPA Journal Education Forum Anticipates Future." The CPA Journal. 72: 8. (2002): 20+.

Telberg, Rick. "Happy New Year! Yes, It Really Could Be." At Large Column. December 29, 2003 The AICPA Website. February 20, 2004 https://www.cpa2biz.com/News/Telberg/Happy+New.htm

This is reflected in the popularity of the MBA degree, both among the students and the recruiting firms survey by Albrecht and Sack (2000) revealed that nearly 100% of accounting… [read more]

SOX 404 Term Paper

Term Paper  |  17 pages (6,206 words)
Style: APA  |  Bibliography Sources: 20


Sarbanes-Oxley Act came at the wake of a lot of scandals and apprehension and there was a lot of media pressure in its enactment that was caused by the collapse of Enron. This act provides stiff punishments for those at the helm of companies and fines of over $5 million for violation of the laws. (Snedaker, 2006) the act is… [read more]

Sarbanes-Oxley Research Proposal Abstract the Intent Term Paper

Term Paper  |  3 pages (1,494 words)
Style: APA  |  Bibliography Sources: 10


Sarbanes-Oxley Research Proposal
The intent of this research proposal is to evaluate, quantify and predict
the implications of the extent to which the 2002 Sarbanes Oxley Act has had
to date and will have in the future regarding the formation of smaller,
privately held businesses and the decision of larger, publicly-held
corporations to go private in order to avoid… [read more]

Professional Exams Term Paper

Term Paper  |  4 pages (1,198 words)
Style: MLA  |  Bibliography Sources: 4


Professional Exams

Today's careers are very different from careers of the past. Many professional career require the candidate to take and pass a standardized test before a diploma, certification or licensure is obtained. These standardized exams are rigorous exams that test the entire knowledge of the candidate in a specific area. This paper will discuss three of these professional exams which will include the exam for certified public accountants, the exam for social workers and the exam for real estate brokers. Topics such as test requirements, content, history, passage rate and other characteristics of the specific exam will be explored.

The CPA Exam

The CPA exam is the Certified Public Accountant's exam. This exam serves to protect the public interest by assuring that only highly qualified individuals become licensed as certified public accountants. There are specific requirements needed to take this test. These requirements include: completion of 150 college semester hours of general college education and completion of one of the following: completion of a graduate degree from a college approved by the CHEA or accredited by the AACSB, Received a graduate degree in business from an institution recognized by CHEA or accredited by AACSB with 30 semester hours of specified accounting at the undergraduate level or 18 semester hours at the graduate level (accounting subjects must include financial accounting, managerial accounting, auditing, taxation, and professional ethics), or received a baccalaureate degree with 30 semester hours of specified accounting and 24 semester hours in business subjects. (Accounting subjects must include financial accounting, managerial accounting, auditing, taxation, and professional ethics. Candidates must also check with their specific jurisdiction to assure what their specific jurisdiction requires. Each has different requirements.

The CPA exam contains very specific content. The test consists of essays and multiple choice questions divided into two separate sections; the new CBT sections and the current section. The new CBT section contains test materials that cover: auditing and attestation, financial accounting and reporting, regulation, and business environment and concept. The current section of the test contains test materials that pertain to audit, financial accounting and reporting, accounting and reporting, and law and professional responsibilities.

Over the years, the CPA exam has changed a lot. Back in the early 1990s, the CPA exam was a nineteen hour test that was taken over a three day period. It consisted of four different sections and was only administered in May and November of each year. Students were not allowed to use any form of assistance, including use of a calculator. By the late 1990s, the CPA exam was changed to a two hour test that contained four different sections and students were permitted to use a calculator. Later in 2004, an electronic online version of the CPA was made available to students. This new test is now offered six days a week throughout the year. (Wikipedia)

The national passage rate for the CPA is 43%. Students are required to earn a minimum score of at least 75% to pass this test and only… [read more]

Developments in U.S. Auditing Standards and IFRS Research Paper

Research Paper  |  5 pages (1,744 words)
Bibliography Sources: 4


While ASB led the redrafting efforts to clarify the standards, it also incorporated the standards with the ISAs, from the IAASB (Huault & Richard, 2012). Although the objective of redrafting the standards was clarity and unity and not to create extra requirements, auditors must adjust their practices as required by this project.


A shift to the clarified auditing standards has provided to be an inevitable move for at least all organizations worldwide. As organizations embrace this significant move, more will be pushed to embrace the same move for compatibility. Therefore, auditors must be ready to contend with the far-reaching consequences of such crucial regulatory change is likely to have on organizations. Auditors need to be proactive concerning the convergence of IFRS. They must continually monitor the current developments in the field, staying abreast as this international topic is subject to develop globally.


Huault, I., & Richard, C. (2012). Finance: The discrete regulator: how finance shapes the world. Basingstoke: Palgrave Macmillan.

Kimmel, P.D., Weygandt, J.J., & Kieso, D.E. (2011). Financial accounting: Tools for business decision making. Hoboken, N.J: John Wiley.

Narayan, F.B. (2012). Diagnostic study of accounting and auditing practices in the Marshall Islands. Manila: ADB.

Tapscott, D., Eccles, R.G., & Krzus, M.P. (2013). One report: Integrated reporting for a sustainable strategy. Hoboken, N.J: Wiley.… [read more]

Auditing in ERP System Environments Research Paper

Research Paper  |  3 pages (950 words)
Bibliography Sources: 1


This can significantly enhance the possibilities of success in attaining the future audits (Kuhn, 2010). The article supports the use of low-cost resolutions to achieve an initial automated audit experience like introductory CAATS facilitating data sorting, extraction and analysis procedures. Such programs demand minimal training, provide detailed logs for auditing as paperwork documentation and enables the creation of specified-auditor reports that could be applied to the future and current data sets. Initially, these tools must be utilized to replace manual auditing practices as these areas generate substantial benefits.

In this context, the article illustrates that the programs can be configured to tackle tasks like choosing statistical samples, footing ledgers, generating suspicious transactions, and generating confirmations. Such tools can test the record included in files, which is a marked enhancement over the historical stamping technique found in traditional manual audit.

The Future Audit

As mentioned earlier, basic CAATS have the capability to improve audit efficacy and effectiveness. However, the article shows that they do not function all the time. It fails to construct a continuous auditing realm whereby exceptions might be identified as they occur. Alternatively, the article argues that CAATS do not operate in real time data streams and hence unable to address suspicious events like potential irregularities or fraud in an optimized trend. It demonstrates that based on today's business technology advances, the progressive emphasis on the backward auditing is an outdated philosophy. Therefore, businesses that successfully experiment with CAATS must be given utmost consideration to advanced programs containing functionalities that resemble future audits. As such, they must be provided with high assurance levels. Recently emerging resolutions better satisfies this version (Kuhn, 2010).

The programs in the article are capable of continuously capturing outliers and exceptions in data sets in disparate frameworks, alert mechanisms to appropriate personnel, provide information and confront problems like errors, misuse of resources and fraud in real-time. Such programs could help in optimizing the function of auditing by analyzing all financial transactions taking place. Therefore, such a proactive approach will increase effectiveness and efficiency in discovering opportunities and problems for business improvement. However, before advancing into this elaborative realm, additional considerations pertaining to business operations will be warranted (Kuhn, 2010).

Auditing field has overseen enormous strides in the past years but it has failed to keep pace with the actual time economy. Some auditing techniques and approaches, which were valuable preciously are now outdated. Moreover, the evolution in auditing has arrived at a crucial juncture whereby auditors either lead in adopting or promoting the future audit or proceed to conform to the traditional paradigm. In future, auditing approaches will demand standard setters, regulators, and auditors to make significant adjustments.


Kuhn, J. (2010). Continuous Auditing in ERP System Environments: The Current State and Future Directions. Journal Of Information Systems American Accounting…… [read more]

Audit Planning Research Paper

Research Paper  |  5 pages (1,333 words)
Bibliography Sources: 3


c. Trace amounts from trade receivable ledger to original checks received and sales invoices to clarify accuracy of amounts, prenumbering of invoices, and customer information.

d. Trace debit side of cash receipts journal to cash and accounts receivable control account.

e. Trace credit side of transactions to sales documentation.

f. Verify that sales invoices are prenumbered, has correct customer information, items purchased, and amounts compared to monthly statements mailed to customers.

g. Ensure that all goods and services have been billed with correct amounts, including charges for goods and services, shipping and contract terms.

h. Identify shipments as being before or after accounting period cut off by means of shipment documents and shipping log.

i. Identify payments as being before or after accounting period cut off by means of checks received, monthly statements to customers.

j. Analyze customer dispute logs for disputes, inquiries, and whether they were resolved.

k. Monitor for prenumbered customer complaints regarding improper billing on statements or improper invoicing.

l. Check credit memos for authorization by individuals independent of accounts receivable function.

m. Account for prenumbered credit memos and prenumbered receiving documents.

n. Compare credit memos with sales documents.

o. Look for unresolved and unmatched items by individual independent of the sales function.

p. Look for reconciliation of accounts receivable ledger by individual independent of accounts receivable function.

q. Look for reconciliation between accounts receivable ledger and accounts receivable control account.

2. Accounts Receivable-Officers

a. Trace amounts from accounts receivable-officer control account to accounts receivable-officer ledger.

3. Inventory

a. Trace amounts in inventory control account to purchase orders, sales receipts, credit memos, and inventory method.

4. Accumulated Depreciation

a. Trace amounts in accumulated depreciation control account through depreciation methods for accuracy.

b. Trace debit side of accumulation depreciation to depreciation expense.

5. Intangible Assets

a. Check for economic issues that may have caused impairment.

b. Verify amortization amounts through amortization methods.

6. Line of Credit

a. Check with financial institutions to verify amounts in line of credit control account.

7. Accounts Payable

a. Trace amounts from accounts payable ledger to purchase orders and monthly statements.

b. Verify reconciliation of accounts payable ledger by individual independent of accounts payable function.

8. Accrued Expenses

a. Trace amounts in accrued expenses to invoices to ensure they are bona fide business expenses.

9. Capital Lease Obligations

a. Trace amounts for current maturities to current maturities control account.

b. Trace capital lease amounts to original contracts and cancelled check payments to verify accuracy of amounts.

10. Retained Earnings

a. Trace opening balance to prior year financial statements.

b. Trace debit side of Net Income/Retained Earnings adjustment to Net Income control account.

B. Income Statement

1. Sales

a. Trace balance of sales control account to sales journal.

b. Verify reconciliation of sales journal by individual independent of sales function.

c. Trace amounts in sales journal to prenumbered sales documents

2. Cost of Goods Sold

a. Trace amounts in cost of goods sold control account to purchase orders, shipping documents, and monthly statements.

3.… [read more]

Audit Quality and Agency Research Paper

Research Paper  |  15 pages (4,858 words)
Bibliography Sources: 1+


All of these play a major role in minimizing the chances of such occurrences of errors in the audit report. But sometimes these incidents do not only happen because of mistakes of the human nature. The auditors might provide such misleading information deliberately and knowingly. They can do this to avail benefits for themselves by colluding with the management, thus… [read more]

Audit Plan Outline Term Paper

Term Paper  |  3 pages (913 words)
Bibliography Sources: 2


Audit Plan Outline

Over the last several decades, there has been an emphasis on having accountants play a central role in the financial activities of corporations. The reason why is because of various federal regulations (such as the Securities and Exchange Act of 1934). This requires firms to file quarterly reports with regulators. At the heart of this strategy, are procedures that will improve transparency (the independent auditor). This is someone who is working for the company with the intention of ensuring that management is following different accounting procedures. (Palmon, 2011, pp. 165 -- 183)

In the case study that we are examining, Keystone Computers and Networks is preparing for an audit from their accountants. To determine the best strategy that must be utilized during the process auditors need to prepare an outline of their objectives for the review. This is accomplished through creating an audit plan outline. Some of the different areas that will be focused on include: steps to decide if the client should be selected, internal controls, procedures that need to be reviewed, substantive tests and the final reporting steps. Together, these elements will provide the greatest insights as to the role that auditors play in the process and how they can be prepared for these situations.

KCN Audit Strategy




Steps to decide if the Client should be Selected.

To determine what approach will be taken in evaluating a potential client. This reduces the risks to the firm and improves the effectiveness of the audit.

To decide if a client should be selected requires focusing a number of criterion to include:

The accounting standard that is utilized.

If these standards have been changed in the past.

Review all relevant financial information over the last four years.

Evaluate the risks and rewards of conducting the audit.

Internal Controls

Internal controls are procedures inside the company that is used to identify and deal with specific risks.

There are a number of areas that the firm needs to focus on to improve internal controls. These include:

Improving inventory management.

Increasing the amount of committees to monitor the activities of managers.

Reduce the total compensation for executives of the firm away from financial performance.

Monitor how the company is able to achieve growth.

Be watchful of the various losses from using an aggressive strategy (i.e. credit losses).

These elements will help to reduce risks and improve transparency. This is when the growth and operating goals will be achievable.

Procedures that need to be Reviewed.

To determine the proper procedures that need to be reviewed requires looking at the entire organization. This will help us to identify polices that are out of date and must be changed.

There are a number of policies that need…… [read more]

Non Profit Accounting Assessment

Assessment  |  2 pages (607 words)
Bibliography Sources: 1


The issue of donor-advised funds is also raised, since donors can sometimes insist that funds are used for specific purposes, thus the necessity of creating such funds. The tax treatment of donor-advised funds is outlined.

Chapter 28 covers auditing. A special type of audit is the A-133 audit, which the author outlines in detail and differentiates from a financial statement audit. Some findings need to be reported, and most auditor findings should be addressed by management because they represent something that is wrong with the financials of the organization.

Chapter 29 covers bookkeeping. As with accounting, there are different types of bookkeeping as well. The first of these is the simplest, cash-basis bookkeeping. Cash basis is a simple ledger that tracks cash transactions. Every transaction has an offsetting credit and debit. This allows every movement of cash to be understood, so that all expenses and sources of revenue are known. A trial balance is basically a cash-basis balance sheet.

A checkbook system is a fairly informal type of bookkeeping. The author argues that this system is familiar because everybody keeps a personal checkbook, but in 2014 that maybe needs to be updated, because today we need to learn these principals. The checkbook system is simply to record each disbursement and every time money comes in, simply noting where it came from or where it went. When this process becomes more formal and the information is tabulated at the end of the year, this becomes a bookkeeping system. Bookkeeping systems are still cash accounting, but a more formalized type than the checkbook system. The ethical leader will need to ensure that there are controls on cash disbursements, which is something that can be done with a bookkeeping system that records all transactions, especially all cash transactions and properly accounts for the sources and…… [read more]

Sarbanes-Oxley Act Research Paper

Research Paper  |  3 pages (861 words)
Bibliography Sources: 4


" (Sox-Law, 2003, p.1)

Section 404

Section 404 of the Sarbanes-Oxley Act is reported to make a requirement that issuers must publish information in their annual reports in regards to the "cope and adequacy of the internal control structure and procedures for financial reporting." (Sox-Law, 2003, p.1) This statement is required to include information on the "effectiveness of such internal controls and procedures." (Sox-Law, 2003, p.1) Finally, the registered accounting firm is required to "attest to and report on the assessment on the effectiveness of the internal control structure and procedures for financial reporting." (Sox-Law, 2003, p.1)

Section 409

Section 409 of the Sarbanes-Oxley Act states that there is a requirement for public disclosure by issuers "on an urgent basis, information on material changes in their financial condition or operations." (Sox-Law, 2003, p.1) These disclosures must be presented in a way that is easily understandable and that has the support of "trend and qualitative information of graphic presentations as appropriate." (Sox-Law, 2003, p.1)

Section 802

Section 802 of the Sarbanes-Oxley Act is reported to impose "penalties of fines and/or up to 20 years imprisonment for altering, destroying, mutilating, concealing, falsifying records, documents or tangible objects with the intent to obstruct, impede or influence a legal investigation." (Sox-Law, 2003, p.1) In addition, violation of the requirements for maintaining all audit and review papers for five years is punishable by penalties and fines up to 10 years for any accountant who knowingly or willfully violates these requirements.


The Sarbanes-Oxley Act ensures that accountants are compliant with proper reporting and public disclosure standards. The requirements of the Sarbanes-Oxley Act are clearly set out and easy to follow with no vaguely stated requirements but instead are easily understandable. It is precisely this, which the Sarbanes-Oxley Act really calls for on the part of the accounting profession -- or that of clear and easily understandable information that can be readily disseminated by the public. The very important sections of the Sarbanes-Oxley Act have been reviewed in this study and the standards for reporting and public disclosure which includes requirements of avoiding fraud or willful untruths and the penalties associated with the same including potential incarceration are prominent and provide the requirements with a great deal of strength and accompanying motivation for accounting compliance.


It is the opinion of this writer that the Sarbanes-Oxley Act should prove to be very effective in gaining compliance to the standards set out in this act for the accounting profession due…… [read more]

Lease Accounting Changes Research Paper

Research Paper  |  4 pages (1,009 words)
Style: APA  |  Bibliography Sources: 5


This standard and the ones before it are noted to have been presented in 2011 but would probably not go into effect until 2014. PWC notes that the impact of these changes will be measurable including noticeable differences on balance sheets and income statement presentations. It is also noted that these revisions would probably require, or at least make prudent, re-negotiation or even the ending of existing leasing arrangements due to the impacts that these revised standards would have. The reason is that the amount of manpower and resources poured into these revisions would force companies to re-evaluate whether they are moving in the right direction from an investment, leasing and accounting standpoint. Despite the heavily automated nature of accounting, the assessments called for in this standard revision may very well require firms to act more diligently, more deliberately and this might cause less transactions relating leasing and such to occur (PWC, 2013)(AASB, 2013) (Australian Finance Agency, 2013).

PWC notes that lessee's may lean on lessor's to provide the information but the latter may be unable or unwilling to provide that information so that could very well gum up the works even more. Additionally, PWC notes that the tax impact to the businesses involved, both lessees and lessors, will tend to vary quite a bit based on the situation at hand and the jurisdiction in question. There is also the consideration of communicating and haggling with shareholders regarding how to proceed in light of the revised standards and the impacts these standards will tend to have. This dimension is vital to touch on since stakeholders are often investors and the purse strings may very well become tightened if the prospects of leasing and/or buying new property will become more risky, more expensive or both. The risk stems from the revised accounting presentation and how this can impact the actions (and investment) of stakeholders and outside investors like stockholders and such, and all of the above can be very touchy and might be willing to yank their cash quickly (AASB, 2013).


In the end, the intentions of the IFRS revision is presumably good-hearted and is meant to keep companies consistent and honest about the figures that they are reporting. However, the burden that these revised standards create as well as the financial impacts as deemed by shareholders can be quite pressing and impactful.


AASB. (2013, September 2). AASB - Home. AASB. Retrieved September 2, 2013, from www.aasb.gov.au

Finance Agency. (2013, September 2). Department of Finance and Deregulation. Department of Finance and Deregulation. Retrieved September 2, 2013, from http://www.finance.gov.au/

IFRS. (2013, September 2). IFRS

Home. IFRS

Home. Retrieved September 2, 2013, from http://www.ifrs.org/Pages/default.aspx

PWC. (2013, September 2). PwC Australia - PricewaterhouseCoopers. PwC Australia - PricewaterhouseCoopers. Retrieved September 2, 2013, from http://www.pwc.com.au

PWC. (2013, September 2). PwC: Audit and assurance, consulting and tax services. PwC: Audit and assurance, consulting and tax services. Retrieved September 2,…… [read more]

Governmental Accounting Data Analysis Chapter

Data Analysis Chapter  |  6 pages (2,146 words)
Bibliography Sources: 1


Governmental Accounting

What are the inclusive dates of the fiscal year?

The fiscal dates that are included in the Comprehensive Financial Annual Report for the city of Scottsdale, AZ is from June 30, 2011 to June 30, 2012. ("Comprehensive Annual Financial Report," 2012)

Write the name and address of the independent auditor. Is the auditor's opinion unqualified? If not, describe… [read more]

Accounting Ethics Research Paper

Research Paper  |  4 pages (1,286 words)
Bibliography Sources: 4


Accounting Ethics: The Enron Scandal

A number of recent scandals in the past ten years have motivated regulators to change the legal landscape in regards to what constitutes ethical standards in accounting. With the Sarbanes-Oxley Act (SOX) in 2002, Congress created the Public Company Accounting Oversight Board (PCAOB), a non-profit entity that assumed responsibility for establishing auditing standards. It replaced the role previously filled by the Auditing Standards Board of the AICPA. The AICPA was deemed to be overly self-interested to regulate the conduct of auditors. One of the precipitating events that generated the political motivation to pass SOX was the Enron scandal. Specifically, "the plight of David Duncan, the lead audit partner at Arthur Andersen on the Enron account, underscores the consequences accountants may face under professional responsibility rules. Duncan pleaded guilty to obstruction of justice in connection with document shredding. The Texas State Board of Public Accountancy, in lieu of further disciplinary proceedings, revoked Duncan's license" (Romal & Hibschweiler 2004). Auditing has traditionally been a self-regulating profession, but after Enron, SOX put into place independent legal guidelines to prevent ethical breaches (Verschoor 2012).

The Enron scandal was a scandal of betrayal -- betrayal of the public trust, of ordinary employees, and shareholders. What is so extraordinary about the story of Enron is that it seemed like a historic American success story. "In just 15 years, Enron grew from nowhere to be America's seventh largest company, employing 21,000 staff in more than 40 countries" (Enron scandal at-a-glance, 2002, BBC). However, the reason for its stratospheric rise in profitability was that "Enron lied about its profits" and it concealed "debts so they didn't show up in the company's accounts" (Enron scandal at-a-glance, 2002, BBC). Enron created a series of shell corporations "designed to hide its liabilities and mislead investors" and even when it knew it was in financial trouble, it concealed its losses and encouraged employees and other investors to buy over $1.1 billion in stock (Enron scandal at-a-glance, 2002, BBC). Both investors and employees alike saw their life savings wiped out as a result of the fraud (Kadlec 2002).

Enron was able to pull the wool over the eyes of regulators for so long with the aid of the formerly well-respected accounting firm of Arthur Anderson. From an accounting perspective, what was so remarkable was the complicity of the stalwart firm in perpetuating the fraud. Anderson did not merely ignore accounting red flags -- it was instrumental in perpetrating the fraud itself. "Just four days before Enron disclosed a stunning $618 million loss for the third quarter -- its first public disclosure of its financial woes -- workers who audited the company's books for Arthur Andersen, the big accounting firm, received an extraordinary instruction from one of the company's lawyers….the Oct. 12 memo directed workers to destroy all audit material, except for the most basic 'work papers'" (Kadlec 2002). Arthur Anderson complied with these instructions despite the fact that there was mounting evidence that Enron's business practices would soon… [read more]

SOX the Sarbanes-Oxley Act (SOX) Term Paper

Term Paper  |  4 pages (1,238 words)
Bibliography Sources: 4


In that way, the accounting profession has been forced to take greater responsibility for its role in the economic system and has been given the tools to do this.


I believe that the accounting profession is better off being government-regulated, for two reasons. The first is that the objective of accounting and auditing for public companies is to ensure that trustworthiness of the country's investment system. This objective is greater than any one accounting firm or corporate client. When confidence in the investment system is compromised, firms find it more difficult to raise the capital they need. This in turn harms growth, innovation and the economy as a whole. That confidence in the accounting system has an effect on the GDP makes it a matter of national economic policy, not simply a matter for one industry.

The other reason why the accounting profession is better off being government-regulated is that the mechanics of how the industry performs its tasks will not change. Whether the enforcement mechanism comes from within the industry or from government, accounting firms will still need to do their jobs the same way, performing due diligence and implementing controls on the accounting and auditing processes. Because functionally the accounting firms will do the same jobs the same way, and the only difference between the two alternatives is who runs the enforcement mechanism, then we need to look back to the first reason for guidance. If government regulation caused dramatic changes to the way that the accountants to their business, then there might be a downside, but with no functional downside, the ability of government to ensure that accountants are performing their duties to investors is the deciding factor.


I believe that fraud will be reduced somewhat as the result of SOX. Many of the frauds that led up to the passage of SOX were outright criminal, and SOX does not directly address criminality. There will always be people who try to perpetrate such frauds. SOX removes some of the perverse incentives within the accounting system to ignore such frauds, thereby increasing the likelihood that the fraud will not only be detected but will also be dealt with.

In addition, SOX builds in extra oversight and a higher number of interconnected responsibilities. CEOs and CFOs must approve the internal controls, and so too must the auditors. For a fraud to be perpetuated, the auditors and the executives would need to work closely together. If not, the checks and balances that SOX builds into the system will be more effective in catching frauds. People will still seek to commit fraud, but SOX raises the stakes. The rash of accounting frauds that occurred in the early 2000s was thought to have been influenced by the perception that it was hard to get caught and that, if caught, the consequences would not be severe. SOX not only changed that climate, it but put the new climate in writing -- it increases the odds of a fraud being detected and… [read more]

Influence of the French Accounting System on a Former French Colony Research Paper

Research Paper  |  8 pages (2,686 words)
Style: Harvard  |  Bibliography Sources: 12


¶ … French Accounting System on Cambodia

Cambodia stands out from its Southeast Asian neighbors by virtue of its unique history as a French colony and the fact that its accounting profession was virtually destroyed during the turbulent years following its independence at the hands of Pol Pot and the bloodthirsty Khmer Rouge regime. Consequently, the modern accounting profession in… [read more]

Information Technology (IT) Auditing Research Paper

Research Paper  |  8 pages (2,289 words)
Bibliography Sources: 1+


Internal Auditing

IT Aduiting


Difficulties of establishing good internal auditing practices in a company

Many companies have developed and strengthened their internal audit department in order to meet the complexities that have been associated with companies, with many companies becoming sophisticated. There is need for a strong internal audit department that is charged with the obligation of conducting an… [read more]

Auditing the Role of Databases Essay

Essay  |  16 pages (5,292 words)
Bibliography Sources: 1



The role of databases in the auditing function is to analyze a much larger volume of information more quickly and accurately than what has been done in the past (Cascarino, 2012). That role is important because manual systems were far less reliable than systems that utilize computers, and those old systems could cause auditors to easily make mistakes that… [read more]

Audit Quality and Agency Research Paper

Research Paper  |  11 pages (3,926 words)
Bibliography Sources: 0


Additionally, financial company policies are measured against legislation from agencies such as the Internal Revenue Service to make certain that the policies are within the confines of current law (Vrettos, 2010).

The second role auditors play within modern audit theory is that of the traditional financial review. This role has barely changed in the past 400 years with regard to… [read more]

Accounting for That Quite Likely M Ay Research Paper

Research Paper  |  7 pages (2,684 words)
Bibliography Sources: 3


¶ … Accounting for that quite likely m ay be my profession, an impression that was reinforced by the interview that I had with the person (described in this essay). Accounting will give me a solid employment with a lucrative wage and this is what is important to me. I have also learned that it can be fun in the… [read more]

Accounting International Accounting and Auditing Research Paper

Research Paper  |  6 pages (1,877 words)
Bibliography Sources: 7


Global financial reporting is quickly becoming an actuality. As home to the biggest capital market in the world, the U.S. has a vital role to play in international economic reporting. Due to the U.S.'s position in global capital markets, U.S. firms and academics can no longer worry about the expansion, application, and implications of U.S. Generally Accepted Accounting Principles (GAAP). The point has come to center on the expansion, appliance, and propositions of International Financial Reporting Standards (IFRS) (Barth, 20085). There is no arguing that global standards are the wave of the future. It is very imperative that the U.S. play a considerable role in the expansion and achievement of international accounting and auditing standards so that these are developed with their best interests in mind.

Works Cited

Barth, Mary E. "Global Financial Reporting: Implications for U.S. Academics." Accounting

Review 83.5 (2008): 1159-1179. Business Source Premier. EBSCO. Web. 6 July 2011.

Hail, Luzi, Christian Leuz, and Peter Wysocki. "Global Accounting Convergence and the Potential Adoption of IFRS by the U.S. (Part II): Political Factors and Future Scenarios

for U.S. Accounting Standards." Accounting Horizons 24.4 (2010): 567-588. Business

Source Premier. EBSCO. Web. 6 July 2011.

"How we develop IFRSs." 2011. IFRS. Web. 6 July 2011. <


"International Accounting and Auditing Standards." 2011. The World Bank. Web. 6 July 2011.


Murphy-Smith, L., Sagafi-Nejad, T. & Wang, K. 2006. "Going Global: Accounting and Auditing

Standards." Web. 6 July 2011.


Pomeranz, Felix. "Prospects for International Accounting and Auditing Standards -- The

Transnationals in Governmental Regulations." International Journal of Accounting 17.1

(1981): 7-20. Business Source Premier. EBSCO. Web. 6 July 2011.

Richardson, Alan, and Burkard Eberlein. "Legitimating Transnational Standard-Setting: The

Case of the International Accounting Standards Board." Journal of Business Ethics 98.2

(2011): 217-245. Business Source Premier. EBSCO. Web. 6 July 2011.

"SEC Concept Release: International Accounting Standards." 2000. Securities and Exchange

Commission. Web. 6 July 2011. < http://www.sec.gov/rules/concept/34-42430.htm>… [read more]

Auditing New Century Financial Corporation Essay

Essay  |  5 pages (1,635 words)
Bibliography Sources: 1


Auditing New Century Financial Corporation

KPMG served as the independent audit firm of several of the largest subprime mortgage lenders. Identify the advantage and disadvantages of a heavy concentration of audit clients in one industry or sub-industry

The problem with having too many clients in one industry / sub-industry are: they can have undue amounts of influence and obvious errors… [read more]

Auditing of Enron Corporation Responsible Essay

Essay  |  2 pages (773 words)
Bibliography Sources: 2


This is unlikely, however, and an auditing firm conducting an operational audit on its own should not feel its independence threatened too strongly.

However, if the same firm is then asked to do a financial audit -- which is a historical analysis of a company's financial statements for a third party, such as investors -- the firm's independence will be threatened, as it must conduct the audit impartially, but it already has a financial relationship with the company. This many cause the auditors to fear losing the company as a client, and creates a risk that they will not manage the financial audit appropriately. In this case, an auditing firm with no past relations with the company should do the financial audit.

The third type of service is an internal audit, which is a financial audit, but done at the request of management, not a third party. This type of audit does little to threaten a firm's independence, as the results will stay within the company, allowing the auditors to be impartial and face no risk in reporting with complete honesty. However, if the firm was then requested to do a financial audit, a conflict of interest would arise.

Works Cited

Ashbaugh, Hollis. "Ethical Issues Related to the Provision of Audit and Non-Audit Services: Evidence from Academic Research." Journal of Business Ethics 52.2 (2004): 143-48.

Knapp, Michael Chris. Contemporary Auditing: Real Issues and Cases. Mason, OH: Cengage Learning/South-Western, 2010.

"The Comeback Of Consulting." BusinessWeek - Business News, Stock Market & Financial Advice. 3 Sept. 2007. Web. 05 Feb. 2011. .… [read more]

Accounting Profession in 2014 Essay

Essay  |  15 pages (5,140 words)
Bibliography Sources: 2


Accounting Profession in 2014

In the midst of scandal, the accounting profession finds itself under scrutiny; perhaps more than it ever has in the past. Accounting and auditing scandals have become les frequent since WorldCom and Enron, but that still does not mean that we are now immune. High profile cases continue to haunt the media. As Bernard Madoff is… [read more]

Planning the Audit Term Paper

Term Paper  |  3 pages (729 words)
Bibliography Sources: 0


Planning the Audit

Audit of the financial statements of Keystone Computers & Networks, Inc. (KCN) for the year ended December 31, 20X5. Also, the company's debt agreement with Western Financial Services requires the company to furnish the lender a report by our firm on KCN's compliance with various restrictive debt covenants.

Audit KCN for the year ended December 31, 20X5.

Issue letter on KCN's compliance with its various restrictive debt covenants.

Report of Independent Auditors

The Stockholders and the Board of Directors

Keystone Computers & Networks, Inc.

We have audited the accompanying balance sheets of Keystone Computers & Networks, Inc. As of December 31, 20X5 and 20X4, and the related statements of income, changes in equity and cash flows for the years then ended. 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 audits.

We conducted our audits in accordance with auditing standards generally accepted in the Unites 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 audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Keystone Computers & Networks, Inc. As of December 31, 20X5 and 20X4, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

Charles Adam


Western Financial Services



Basis of report

Our work was conducted in accordance with the framework for reporting in connection with loan covenants set out in guidance issued by the Consultative Committee of Accountancy Bodies. We have read the attached Statement prepared by the Board of Directors. Our work was based on obtaining an understanding and reasonable assurance of compliance of…… [read more]

Internal Auditing Term Paper

Term Paper  |  6 pages (2,504 words)
Bibliography Sources: 1+


Internal Auditing

Over the past two decades, a number of changes took place that greatly altered the business world. Some of these were external, such as ever-increasing globalization, growing competition and fast-paced technological innovations. However, some of the changes were internal, as well. At the beginning of the millennium, for example, huge cases of company fraud rocked the structures of… [read more]

Small Accounting Firm Can Add Term Paper

Term Paper  |  1 pages (448 words)
Bibliography Sources: 0


Throughout, our clients have trustfully relied on us to provide more than just audits, tax returns, etc.

Our clients would be able to benefit from outsourcing services such as, internal auditing, temporary accounting, litigation support, and much more. With capable corporate finance advisory and transaction services, we would focus on helping our clients analyze the financial, organizational, and operational impact of mergers and acquisitions, divestitures, and even international investments.

Our team can assess a client's prospective deal, investigate the potential target, and suggest solutions to any problems that arise. We also assist companies seeking to raise funds or gain a stock market listing. In addition, our assurance professionals have created a full range of technology risk management services. These offerings help protect our clients from technology interruptions, security breaches, system failures, and other potential high-tech threats.

At our accounting firm, tax-consulting specialists are dedicated to the task of developing and implementing intelligent ideas, strategies, and innovative solutions to provide companies with ways of reducing their tax bills. We have also put our employees under intensive training to provide professionally skilled information in the areas dealing with federal tax, state and local tax, international tax, valuations, public finance, and compensation and benefits. Customized solutions to tax options will help save client's time, money,…… [read more]

Accounting Information Essay

Essay  |  3 pages (995 words)
Bibliography Sources: 2


Enhancing Qualitative Characteristics:

Apart from the fundamental qualitative characteristics, accounting information has enhancing qualities i.e. comparability, verifiability, timeliness, and understandability. Verifiability of accounting information is an important component in promoting reliability and refers to agreement among various measures. This means that the information must be consistent with market value and other factors used by appraisers. Therefore, the information should contain some measure of objectivity, which is associated with verifiability.

Understandability is the expression of accounting information in a clear manner that will be comprehensible by users. This is an important characteristic because users are generally presumed to have rational knowledge of economic and business activities. While accounting information may contain complex matters, it should be presented in a way that it can be understood by all users including a layperson.

Comparability is the ability to assist users to identify the similarities and differences across various financial conditions and events. In this case, accounting information should be prepared in a way that promotes evaluation of the business information within a certain period of time and compared to similar entities within the same period. One of the major ways to ensure comparability of accounting information is by complying with the international accounting standards. The significance of this characteristic is that it allows a business to review accounting information against that of a rival (Vitez, n.d.).

Timeliness is a significant component of relevance and means that the accounting information should be available to users at an appropriate time for its use in the decision-making process. Due to the need for timely information, businesses or companies are legally required to provide information to external users periodically. The significance of timeliness is attributed to the use of accounting information in decision making by internal and external stakeholders.

Effect on Decision Making:

Each of these qualitative characteristics of accounting information play a crucial role in the decision making process of a business. Business owners use understandability to comprehend accounting information while consistency is used to ensure similar handling of financial transactions and usefulness promotes applicability of the information in decisions. Relevance is used during trend analysis of financial information while reliability ensures the development and sustenance of accurate accounting information. In addition, relevance also ensures that accounting information is available to users at the appropriate time in the decision making process.

In conclusion, accounting information consist quantitative and qualitative characteristics, which play a crucial role in the use of accounting information. Generally, qualitative characteristics are attributes associated with the seeming importance of financial information and used for decision making. Some of the major qualitative attributes of accounting information include reliability, relevance, consistency, understandability, comparability, and usefulness.


Spiceland, J.D., Sepe, J.F. & Tomassini, L.A. (2007). Intermediate accounting (4th ed.).

Retrieved February 20, 2014, from http://highered.mcgraw-hill.com/sites/0072994029/student_view0/ebook/chapter1/chbody1/qualitative_characteristics_of_accounting_information.html

Vitez, O. (n.d.). Qualitative Characteristics of Accounting Information. Retrieved February 20,

2014, from http://smallbusiness.chron.com/qualitative-characteristics-accounting-information-3952.html… [read more]

Accounting in Just Essay

Essay  |  3 pages (1,056 words)
Bibliography Sources: 4


If the company borrowed that cash, there would be no entry that reflects the loan obligation, nor would there be any entry that reflects the useful life of that asset. The company would record a substantial loss for that quarter based on cash flows, but then have substantial profits in all the other quarters. This again is a distortion of the company's financial picture, and accrual accounting seeks to remedy this issue. Under accrual accounting, the purchase would be amortized, so that the expense only shows a little bit each quarter for the expected useful life of the asset. This would be offset by the periodic revenues generated from the asset. This matching of asset costs and benefits is closer to economic reality for the company, and that is why it is an important part of the accrual accounting system.

As these examples illustrate, the accrual system is much better with respect to dealing with complexity. Accrual accounting is therefore useful for any business that does not operate on a strictly cash basis. Only those businesses that operate on a cash basis should use cash accounting. The minute that there is a misalignment between when a transaction occurs and when the cash flow occurs, the accrual system is better.

Further, the accrual system is differentiated in that it is used by professional organizations, the SEC and it is the only system used for tax purposes. For financial statements this is an important distinction. Neither investors nor regulators will accept cash basis statements, so a company that is producing them is not going to be treated well. It is too easy to manipulate statements using cash accounting simply by making adjustments to the timing of the cash flows. The IRS in particular is not a fan of this, and insists on accrual accounting as a means of ensuring that companies are portraying their financial condition accurately.

Overall, the cash accounting system only makes sense for very small companies, and even then it runs into problems when large purchases, financing or credit purchases are made. Thus, it is important for companies to understand what accrual accounting is, what the rules are and to always apply it. The basic accrual accounting system in the U.S. is the GAAP, or generally accepted accounting principles, and these guide should be used as the basis for any accrual accounting system. The reason is that we use accrual accounting for its ability to handle complexity, but also for its ability to deliver statements that are consistent. Thus, companies cannot simply make up their own rules, they must instead follow established rules for accrual accounting.

Works Cited:

Fishman, S. (2013). Cash vs. accrual accounting. Nolo.com. Retrieved November 4, 2013 fromhttp://www.nolo.com/legal-encyclopedia/cash-vs.-accrual-accounting-29513.html

No author. (2013). Cash vs. accrual accounting. Inc. Magazine. Retrieved November 4, 2013 from http://www.inc.com/articles/2000/04/19194.html

SBA.gov (2013). Cash vs. accrual accounting for taxable income and expenses. U.S. Small Business Administration. Retrieved November 4, 2013 from http://www.sba.gov/community/blogs/community-blogs/small-business-cents/cash-vs.-accrual-accounting-taxable-income-and-e

Shanker, S. (2013). Accounting methods: Cash vs. accrual. Houston Chronicle. Retrieved November… [read more]

GAAP Generally Accepted Accounting Principles Essay

Essay  |  3 pages (962 words)
Bibliography Sources: 4


cost basis accounting "which adheres to the revenue recognition, matching, and cost principles…[this method] captures the financial aspects of each economic event in the accounting period in which it occurs, regardless of when the cash changes hands" GAAP, 2013, Houghton Mifflin Harcourt).

GAAP also suggests that entities adhere to what is known as the time period assumption, which suggests that an artificial time period, however 'constructed' must be used to define periods of reportage. "Using artificial time periods leads to questions about when certain transactions should be recorded" (GAAP, 2013, Houghton Mifflin Harcourt). An initial investment in hospital equipment may be very costly one year, but not so in subsequent years and even may result in a gain for the organization in terms of profitability. Regardless, the principle of GAAP is that whatever time frame is chosen, it should be the one which most accurately reveals the organization's financial health. Then, "once the time period has been established, accountants use GAAP to record and report that accounting period's transactions" (GAAP, 2013, Houghton Mifflin Harcourt).

Other principles of GAAP particularly relevant to healthcare include the full disclosure principle which states that "financial statements normally provide information about a company's past performance. However, pending lawsuits, incomplete transactions, or other conditions may have imminent and significant effects on the company's financial status. The full disclosure principle requires that financial statements include disclosure of such information" via footnotes (GAAP, 2013, Houghton Mifflin Harcourt). Given the widespread existence of lawsuits throughout the healthcare industry, this is particularly significant for organizations: not only regarding lawsuits specific to the entities themselves but also to the types of products used and prescribed by providers at the entity.

Conclusion: The principled nature of GAAP

In contrast to some other forms of financial accounting, GAAP emphasizes principles vs. technical knowledge on the part of the accountant. The professional accountant is assumed to uphold a system of ethics rather than solely adhere to the letter of the law. All financial statements must be reflect "relevance, reliability, and consistency" and the conservation principle which means "in reporting financial data…the less optimistic estimate be chosen when two estimates are judged to be equally likely" to protect shareholders and other persons relying upon the report (GAAP, 2013, Houghton Mifflin Harcourt). And above all else, the principle which trumps all is that materiality principle which states that all of the previously-stated principles should be ignored if a misleading portrait of the organization's financial status and health would be created, if these other principles should be obeyed: material honesty is the aim of all accounting efforts in healthcare and all entities (GAAP, 2013, Houghton Mifflin Harcourt).


GAAP. (2013). Houghton Mifflin Harcourt. Retrieved:


Kramer, J & Applebaum, S. (2013). Accounts receivable from third-party payors: A GAAP

refresher. South Florida Hospital News. Retrieved from:

http://southfloridahospitalnews.com/page/Accounts_Receivable_from_ThirdParty_Payors__A_GAAP_Refresher/7434/1/… [read more]

Technology on the Accounting Profession Term Paper

Term Paper  |  3 pages (876 words)
Bibliography Sources: 2


S., as any company in this category must file their financial statements with the U.S. Securities and Exchange Commission (SEC). The SEC has been testing and continually validating the XBRL standard for the last several years and now every company who is publically traded needs to file reports using this standard (Brands, 2013). While the XBRL standard only applies to publically-held companies, all accounting and finance companies need to be able to gain greater insights from their legacy systems through the use of systems and process integration (Ionescu, Ionescu, Mihai, Cojocaru, 2009). This area continues to flourish, with the role of cloud-based integration architectures (Arnesen, 2013) and role of advanced connectivity applications becoming more commonplace than ever.

The impact of smartphones and tablets also continue to have a widespread effect on the accounting profession (Jelen, 2013) completely changing the nature and extent of how analytics and reporting applications are used (Christensen, Skaerbaek, 2010). Designing applications specifically for mobility platforms is becoming commonplace for many organizations whose executives want to have access to analytics and metrics of performance in real-time, regardless of where they are.

How Cincom's Accounting Systems Have Changed Based On New Accounting Technologies

Cincom has been in business over 40 years and has many antiquated legacy accounting systems and professes. It is in many ways trapped in the 20th century in terms of technology. Yet the recent addition of accounting and financial integration tools via a SaaS platform has given the company greater visibility into short- and long-term costs. It has also made it possible for the company to over forward with cloud-based accounting and finance systems that are providing a more realistic glimpse into their license and contact management revenue. By integrating legacy systems and creating a common system of record, Cincom is also now able to create a single dashboard using financial reporting analytics, and their CEO can how pull up a report from anywhere on his smartphone. Cincom relies heavily on accounting and financial reporting systems that are cloud-based to have a more accurate view of their business.


Arnesen, S., C.P.A. (2013). Is a cloud ERP solution right for you? Strategic Finance, 94(8), 45-50.

Brands, K., C.M.A. (2013). XBRL and big data. Strategic Finance, 95(2), 64-65.

Christensen, M., & Skaerbaek, P. (2010). Consultancy outputs and the purification of accounting technologies. Accounting, Organizations and Society, 35(5), 524.

Collins, J.C. (2013). Technology Q&A. Journal of Accountancy, 216(2), 68-70,72.

Ionescu, I., Ionescu, B., Mihai, F., & Cojocaru, S. (2009). Financial And Accounting Information Systems Interoperability. Annales…… [read more]

Legislation and Standards Term Paper

Term Paper  |  12 pages (3,734 words)
Bibliography Sources: 10


Issues of legal protection, like the degree of recourse given to creditors of investors who have been hurt as a major aspect of the nation's regulatory and legal framework might affect the audit. In the business world where investors have limited authority of the resource, it might expedite the creation of a dominant position for management to impact or miss-use… [read more]

Auditing Operating Standards Research Paper

Research Paper  |  2 pages (651 words)
Bibliography Sources: 2



I. Auditors should have sufficient proficiency and technical training to conduct audits

II. Auditors ought to maintain independence of their mental attitudes in all issues pertaining to the audits

III. Auditors should practice maximum professionalism when performing the audits and preparing auditing reports

Fieldwork standards

I. Auditors must sufficiently plan their work and appropriately supervise any assistants

II. Auditors should acquire an adequate understanding of entities and their environments. This includes assessing statements of risk materials whether due to fraud or error, checking internal controls and designing the timing, nature and extent of additional audit procedures (Giove, 2012).

III. Auditors should acquire adequate proper audit evidence by conducting procedures of auditing to have a reasonable ground for opinions about financial statements being audited

Reporting standards

I. Auditors are required to state in their auditors' reports if the financial statements are in line with the principles of GAAS

II. Auditors must establish in their reports circumstances under which some principles have not been constantly adhered to in the period of current as it related to the preceding period

III. In case the determination of enlightening disclosures are inadequate, they must illustrate in the auditors' reports

IV. Auditors should either express opinions about the fiscal statements or show that opinions cannot be expressed within the auditors' reports. When it is impossible to express auditors' overall opinion, they must state reasons thus in the auditors' reports. In a case an auditor's name is related to a financial statement, he/she must clearly cite the feature of the auditors' work and the level of responsibility taken (Giove, 2012).


American Institute of Certified Public Accountants. (2009). Generally accepted auditing standards, their significance and scope. New York: A.I.A.

Giove, F.C. (2012). The essentials of auditing. Piscataway, N.J: Research and Education Association.

Delaney, P.R., & Feller, A.L. (2011). Wiley CPA examination review: 38th edition, 2011-2012. Hoboken, N.J: John Wiley &…… [read more]

US General Accounting Office Annotated Bibliography

Annotated Bibliography  |  3 pages (739 words)
Bibliography Sources: 0


Henczel, S. (2000). The Information Audit as a First Step Towards Effective Knowledge Management: An Opportunity for the Special Librarian. INSPEL 34 (2000),: 210- 226. Retrieved from http://selma3112609.pbworks.com/w/file/fetch/47767426/Information%20audit%20i n%2 0 special%20libraries.pdf

This article sang the praises of information as the key to any organization and then argued that controlling the acquisition and access to information resources is becoming more difficult. As a result a higher level of evaluation and quality control need to be considered. This article discussed the literature to support its claims and provides useful information calling for increased security considerations.

Ruiz, J. (2008). COBIT as a Tool for IT Governance: between Auditing and IT Governance. UpGrade, 9(1), February 2008. Retrieved from http://www.cepis.org/files/cepisupgrade/2008-I-rouyetruiz.pdf

This source provides an analysis of the usefulness of COBIT for the suitability of IT governance. Both the strengths and weaknesses of this system is analyzed in this article before comparing it to Peterson as an alternative means of governance. The article eventually concludes that IT governance must be aligned with the strategic aims of the organization.

The Institute of International Auditors (2012). "Global Technology Audit Guide 17, Auditing IT Governance. " Issued July 2012.

This source examines auditing practices from a different type of academic source. This article argued that internal audit activity must be staffed with competent members dedicated to achieving goals. The article claimed that the internal audit activity must assess whether the information technology governance of the organization supports the strategies and objectives.

Melville, N. (2010). Information Systems Innovation for Environmental Sustainability. MIS Quarterly 34(1), March 2010: 1-21. Retrieved from http://www.misq.org/downloadable/download/linkSample/link_id/838/In

This source makes a plea that information systems integration and innovation is essential to the life of any and every organization. The article introduced the Belief action outcome (BAO) framework as an acceptable means to introduce the information technology systems into the larger environment.… [read more]

Australian Accounting the Complicated World Research Paper

Research Paper  |  3 pages (985 words)
Style: APA  |  Bibliography Sources: 5


The number of accountants employed at the professional level has risen strongly over the past decade, from around 100,000 in 1996-97 to just over 140,000 in 2005-06.

Current Practices of the Firm

The current practices of this firm are based on the adoptinon of the IFRS' standards. This began at the beginning of 2005 and is still in place today. This standard is in line with the European Union's directives and was applied with the 2004 IFRS stable platform (Grossinger 2007). The adoption of these rules is both beneficial to the client and the firm. The costs to preparers, auditors and users of multinational financial reports are now standardized and easier to read. As a result, Australian entities' financial reports are more readily understood world-wide and gaps in the AGAAP are more complete, (AASB).

Future Developments

While the future is often hard to define, our firm is confident that any changes to international accounting standards can be taken in stride while providing the best accounting services available in this country. This does not mean there are challenges in our future, there are. McGregor (2008) suggested that "the evolution of the accounting standard-setting process in Australia will bring further significant changes as we move to introduce major features of the structures existing in the United States and the United Kingdom." In other words, the global marketplace will dictate this movement.

Grant Thornton's survey about these practices suggested that "i n retrospect, four out of five respondents were supportive of the decision to adopt IFRS for financial reporting periods commencing in 2005, even though there were mixed feelings regarding the impact it had on business when it was first adopted. Those who felt its impact was negative balanced out against those who felt IFRS had a positive impact and 26% of respondents stated that IFRS had no real business effect when first adopted. Not surprisingly, 80% supported simplification of the current IFRS requirements (p.5).

Regardless, here at the firm we are confident that we can handle any client's accounting needs and ensure that they will meet all international reporting standards. The movement towards global financial standardization is nearing and we feel that we are securly positioned to take advantage of these trends and can continue manipulating numbers to our client's needs and expectations.


Australia.gov. "Financial Regulation." Viewed 28 Aug 2013. Retrieved from http://australia.gov.au/topics/economy-money-and-tax/financial-regulation

Cortese, C. (2009). The power of history: accounting standard setting and the extractive industries in Australia. The 1st Accounting History International Emerging Scholars' Colloquium, University of Siena.

Delatribe, D. (2007) Getting along in the accounting world. Accountants Friend, 28 June 2007.

Financial Accounting Standards Board. "International Convergence of Accounting Standards, A Brief History. Viewed 28 Aug 2013. Retrieved from http://www.fasb.org/jsp/FASB/Page/SectionPage&cid=1176156304264

Grant Thornton (2009). IFRS Survey: Four Yearson- where to from here? June 2009. Retrieved from http://www.grantthornton.com.au/files/gt_ifrs_survey_0509-final.pdf

Grossinger, R (2007). Complications from Accounting Standards. Journal of Accounting Standards, June 2007.

McGregor, W.J. (1995), The Setting Of Accounting Standards in…… [read more]

Smakey Dog Foods Essay

Essay  |  5 pages (1,519 words)
Bibliography Sources: 6


For example, if the auditor failed to uncover something that the company purposely hidden, then the firm might argue that they performed their duties to the best of their abilities and would not incur legal liability.

Works Cited

Georgescu, I., Betianu, L., & Macovei, C. (2006, August). The Role of the Management Accounting in Financial Auditing Quality Enhancement. Retrieved from Social Science Research Network: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=924337

Investopedia. (N.d.). Positive Confirmation. Retrieved from Investopedia: http://www.investopedia.com/terms/p/positive-confirmation.asp

Pacini, C. (N.d.). Accepting the Engagement and Planning the Audit. Retrieved from FGCU: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&ved=0CC8QFjAA&url=http%3A%2F%2Fruby.fgcu.edu%2Fcourses%2Fcpacini%2Fcourses%2Facg4632%2Fch7audnotes.pdf&ei=9moNUq2fIaTC2QWK34CIBA&usg=AFQjCNHp1JliHU8dD47MrGFbaT-fZufCcg&sig2=LvyoWvtudI

PCAOB. (N.d.). The Auditor's Consideration of the Internal Audit Function in an Audit of Financial Statements. Retrieved from PCAOB: http://pcaobus.org/Standards/Auditing/Pages/AU322.aspx

U.S. Securities and Exchange Commission. (N.d.). Standards Relating to Listed Company Audit Committees. Retrieved from SEC: http://www.sec.gov/rules/final/33-8220.htm… [read more]

Agree With Accountant B's Philosophy Case Study

Case Study  |  2 pages (676 words)
Bibliography Sources: 4


primarily because system controls provide a means of preventing errors from occurring in the first place. It allows both the accounting firm and the business to more proactive rather than reactive to inventory concerns and considerations. The proactive nature allows investors and other stakeholders to remain confident in the overall business operations of the firm. It also allows management to stay in touch with inventory levels and adjust business operation accordingly. To avoid these occurrences from happening again, tight inventory controls should be implemented. In addition top level management must be held accountable for these inventory levels, with incentives directly linked to behaviors. In this way, management will act in the best interests of the company (Goodyear, 1913).

Agency Theory, contracting costs, and firm value are all relevant issue pertaining to the case. Agency theory, contracting costs, and firm value are all predicated on aligning incentives with benefits. This alignment creates an atmosphere where all stakeholder groups have a vested interest in the company. Contracting theory for example pertains to issue of executive compensation and aligning incentives to maximize the WHK shareholder wealth. Agency theory pertains the relationship (or lack thereof) between an individual and those that represent the individual. This occurs when management does not act in the best interests of shareholders, as is the case with WHK. Both concepts relate to firm value as misplaced incentives can lower the value of the firm relative to other companies with correct incentives in place. As such both the accounting firm and the business overall must create inventory incentives that minimize agency costs and align management goals with those of other stakeholders (Lo, 2013).


1. Lo and Fisher: Intermediate Accounting, 2nd edition, Pearson, Toronto 2013, ISBN 978-0-13-296588-0, p. 2-102,

2. Goodyear, Lloyd Earnest: Principles of Accountancy, Goodyear-Marshall Publishing Co., Cedar Rapids, Iowa, 1913, p.7-76

3. Singh Wahla, Ramnik. AICPA committee on Terminology. 1999 Accounting Terminology Bulletin No. 1 Review and Resume.

4. Friedlob, G. Thomas & Plewa, Franklin James, Understanding balance sheets, John…… [read more]

Gasb Statement 34, Basic Financial Research Paper

Research Paper  |  3 pages (806 words)
Bibliography Sources: 3


This appears to be true in the case of Columbus Consolidated Government's CAFR for fiscal year 2011, as the method of accrual accounting is used in comprehensive fashion to prepare financial statements for every aspect of the government's financial activity. According to several footnotes contained in the CAFR, "information has been provided beginning with the year of implementation of GASB Statement 34, June 30, 2002" (Hodge, 2012), which effectively documents the CAFR's adherence with GASB Statement 34 and the applicable provisions contained therein.

4.) Evaluate management's discussion and analysis (MD&A). In your evaluation, analyze the significant information in the MD&A and how the information contributed to the clarity of the financial statements. From your analysis of financial statements, identify and analyze information that should be included in the statements.

The CRAF released by Columbus Consolidated Government includes a comprehensive Management's Discussion and Analysis (MD&A) section, which "immediately follows the independent auditor's report and provides analysis of the past year's operations of general government and major enterprise activities, and an overview of the Consolidated Government's current and future economic picture" (Hodge, 2011). This particular MD&A portion of the CRAF is extremely informative and navigable even for financial laymen, containing Financial Highlights section to describe a broad review of the report's most salient data, and an Overview of the Financial Statements which provides detailed descriptions of each of the various fund statements used to construct the entire citywide budget.

5.) Determine whether the entity's financial position improved or deteriorated during the reporting period. Speculate on the causes from your review of the financial statements.

The CRAF released by Columbus Consolidated Government reports a net loss in its total government fund, derived by calculating the net change in the various fund balances, of ($48,284,983), and a loss in net assets of governmental activities of ($39,565,808). This data provides a clear indication that the city of Columbus has been affected negatively by the prolonged recession, as well as its own internally made investment and capital project choices.


Hodge, P.J. Columbus Consolidated Government, Finance Department. (2012). Comprehensive annual financial report . Retrieved from website:


GASB. (1999). Summary of statement no. 34 basic financial statements -- and management's discussion and analysis -- for state and local governments.Governmental Accounting

Standards Board, Retrieved from http://www.gasb.org/st/summary/gstsm34.html… [read more]

Letter of Intent to Graduate Program in Accounting Term Paper

Term Paper  |  2 pages (764 words)
Bibliography Sources: 0


¶ … graduating with a degree in marketing from Concordia University, I was privileged to obtain a wide range of experiences in the field of business. Gradually, it became clear to me that my interests and aptitudes lay in the field of accounting. The detail and rigor of the field compelled me to pursue it further. [My interest in the field of study and the reasons for applying to the program]

One of my most formative and memorable experiences included working for TD Bank where I was able to work with numbers every day, and which used my detail-orientation to its maximum extent. I also worked as a marketing and sales associate for Microsoft which further honed my analytical qualities. Microsoft honed my ability to engage in effective time management, to multitask, and work within a dynamic team environment, all qualities which will enhance my ability to serve in the profession of accounting. [a description of my professional experience and its relevance, if applicable, to the program]

McGill's accounting department offers one of the premier programs in all of Canada, and would enable me to specialize in the field of accounting in the future, channeling my energies so I may assist organizations in making better use of their scarce resources. [My interest in the field of study and the reasons for applying to the program] My marketing background and experience with quantitative analysis would allow me to enhance the dialogue of any classroom of which I was a part and would enable me to apply what I learned academically to numerous real world examples.

Accountants are uniquely poised to flag potential losses and to offer a source of additional revenue and value to an organization through cutting waste. What intrigues me about accounting is the degree to which it affects the entire organization: an accountant can note if too much is being spent upon input costs and processes, for example, versus its human resources. Ultimately, so many business problems are rooted in accounting. [How an Accountant can add value to the company] Even a high-quality organization that has an important mission which it fulfills for the public or a business that provides critical services can be undone by its finances. Accountants 'add value' to a company by being able to objectively evaluate…… [read more]

Forensic Accounting in Practice Research Paper

Research Paper  |  3 pages (876 words)
Style: APA  |  Bibliography Sources: 5


Forensic Accounting in Practice

Over the last several years, forensic accounting has been playing an important part in helping to detect and prevent fraud. This was in response to a number of high profile cases involving a host of abuses. To fully understand the role of the industry in achieving these objectives requires focusing on: five skills a forensic accountant needs to possess, their function, legal responsibilities and two cases. Together, these different elements will illustrate the significance of forensic accounting in mitigating potential risks and enhancing transparency. (Riley, 2011)

Determine the most important five (5) skills that a forensic accountant needs to possess and evaluate the need for each skill. Be sure to include discussion regarding the relationship between the skill and its application to business operations.

The five different skills that a forensic accountant must possess include: auditing, finance, research, understanding select areas of law and investigative techniques. In the case of auditing, these tactics must be used to carefully examine a corporation's records. This helps to prevent and detect fraud. These tools will ensure that a firm is efficiently operating its business by reducing illegal activities and increasing transparency. (Pedneault, 2012)

Finance is when actuaries are carefully tracking where the money is being spent. In any firm, this will highlight potential red flags. As this allows them to monitor and determine where all the funds are going. This relates to the operation of a corporation, by establishing procedures for detecting when this is happening. As far as research is concerned, these individuals must have the ability to dig through the most mundane pieces data. This provides actuaries with a track record of all activities. These practices can be used to help improve a firm's operations by providing it with the personnel who will find these facts. (Pedneault, 2012)

Understanding select areas of law are when accountants must identify if illegal activity is occurring. This requires knowing different financial regulations and how they apply to the firm. These areas will focus the direction of the investigation. This improves a business's operations by keeping executives in compliance with all regulations and determining when someone has breached them. (Pedneault, 2012)

Investigative techniques are when actuaries know how to examine, gather and look for evidence. This means studying various sources of data in the process. These skills help to identify areas where wrongdoing was committed. This assists firms in quickly realizing when they have a problem and go after the root causes. In the future, this prevents fraudulent activities from spreading. (Pedneault, 2012)

Describe the role of a forensic accountant within a courtroom environment.

In a courtroom, the forensic…… [read more]

FASB Impacts the Financial Accounting Term Paper

Term Paper  |  9 pages (2,346 words)
Bibliography Sources: 7


Doing away with LIFO will cause additional tax in the current year with the possibility of changes in accounting tax methods and computation of book tax differences as tax return changes come about (Andrews, 2010).

Analysis: The proposals will probably have changes as comments are made before the implementation takes place. For the public accounting firm, it is important to… [read more]

Roles of Forensic Accountants Term Paper

Term Paper  |  6 pages (2,031 words)
Bibliography Sources: 1+


In reality, the company was doing badly and recording a net loss during the period. When the truth eventually leaked out, the company stock prices fell and the company executives were issuing the false financial statement with the hope to increase the stock prices. In a federal trial, two executives of Enron Corporations were convicted of conspiracy of securities fraud and wired frauds.

Haggerty, et al. (2011) argues that the email communication tracking was one of the strategies that a forensic accountant used in uncovering the Enron Corporation fraud. Email communication has become vital evidence during a forensic investigation. The author argues that the forensic accountant was able to uncover the strategies the company executives perpetuated the fraud through the email communication. Typically, the forensic accounting investigators were able to extract data from approximately 5000,000 emails of Enron Corporation, and the accounts were owned by predominately-senior managers. All the datasets extracted from the email communication revealed the evidence of large-scale fraud. The final report of the investigation of the forensic accountant presented at the courtroom revealed that the fraud occurred because there was a lack of transparency in the Enron Corporation. Thus, the company executive used series of techniques to perpetuate frauds, which include accounting loopholes, and poor accounting practices to hide billion of dollar debts that the company accrued over the years.

WorldCom fraud was another case that was uncovered by a forensic accountant. WorldCom was a U.S. based telecommunication company and one-time second largest in the long distance phone company. However, the company was generally known for its massive accounting scandals in 2000s. The outcome of a forensic accountant investigation revealed that the company's executives inflated the company assets to approximately $12 Billion. Typically, the company manipulated its financial statements by classifying payments or costs and using other company assets as capital expenditures. The findings of the investigation indicted several former executives of the WorldCom and many of them faced the criminal charges for their involvement in the frauds. Notably, Former CEO of the company was sentenced to 25 years and the former CFO was sentenced to 5-year imprisonment.


In the contemporary business environment, forensic accountants play an important role in uncovering the financial frauds. This report explores the different strategies that forensic accountants used in uncovering the financial frauds. The paper also discusses the roles and responsibilities of a forensic accountant and the skills that a forensic accountant must possess to deliver the forensic accounting services effectively.


Bressler, L. (2012). The role of forensic accountants in fraud investigations: Importance of attorney and judge's perceptions. Journal Of Finance & Accountancy, 91-9.

Cali, J. (2012). The Forensic Accountant & Fraud Examiner Tool Kit (3rd Edition). St. Louis, Missouri.

Digabriele, J.A. (2008). The Investigation of the Relevant Skills of Forensic Accountants. Journal of Education For Business, 83(6), 331-338.

Haggerty, J. Karran, A.J. Lamb, D.J. et (2011). A Framework for the Forensic Investigation of Unstructured Email Relationship Data. International Journal of Digital Crime and Forensics, 3(3): 1-18.

The Institute… [read more]

Alternative Accounting Methods Essay

Essay  |  4 pages (1,118 words)
Bibliography Sources: 4


Question # 3:

Assuming that a technology company decides to become a public listed company on NASDAQ, and they have to shift to the IRFS Standards, it will have a great impact on the balance sheet because of the difference between the two accounting standards. A few of the major differences in the balance sheet will include a change in the goodwill, fixed assets, and inventory.

Inventory will be recorded in IRFS on the basis of FIFO Method; if the technology company was using LIFO method then they will have to change the inventory recording method to FIFO because LIFO is not acceptable in IRFS. Fixed assets can be allowed to be subtracted with the accumulated depreciation in IRFS which is not allowed in GAAP. In the same way Goodwill is treated in IRFS which allows the firm to subtract accumulated depreciation.

The stock market will respond to the change in the accounting method and the decision to become public listed company on NASDAQ can go both the ways. Therefore it is important for the technology company to take strategic decisions accordingly. The financial ratios can be changed due to the shift in the accounting system. The stock market can react in a positive way if the technology company is able to comply with the new accounting standards and the financial performance is able to attract the investors to ensure them that their investment will be safe, the firm can attain long-term sustainability and there are growth opportunities in the technology company.

Question # 4:

There are a number of implications for the accountants if the private companies choose to shift their accounting system to U.S. GAAP and on the contrary the public listed companies are to be shifted to IRFS. In this case the accountants hired by the firms on their expertise of one kind of accounting system will have to face a major setback. Most of the accounting certificates are provided to the students on the basis of examination on the pattern of a single accounting system but if there is a need in the market for dual accounting system knowledge then the educational practices will also be required to change.

The accountants of the next generation must be well versed with both the accounting principles if they want to secure their jobs and have a stable career with a single firm. The companies are increasingly switching their accounting methods due to a number of reasons therefore the profession of accountancy now demands high level of flexibility and adaptability. This also means that the rate of job switching will be high as the accountants will prefer to master only one accounting method and will easily switch to other companies employing the accounting method that they prefer however the companies themselves would not like to have their employees with access to such confidential information of the company to switch to any other company.


Ball R. (2006). International Financial Reporting Standards (IFRS): pros and cons for investors. Accounting and… [read more]

Transaction-Related Audit Objectives Auditing Internal Case Study

Case Study  |  3 pages (1,020 words)
Bibliography Sources: 3


The daily cash collected on receivables is pre-listed by the right office. The supervisor then deposits the money collected in a locked box.

The business' supervisor recaps all cash sales and compares the totals to the cash receipts. In addition, monthly bank reconciliations are prepared by the firm. Besides, the accounts receivables clerk compares duplicate deposit slips from bank to cash sales and cash receipts journal. The firm further sends monthly statements to its customers.

There is also no classification of Cash Receipts just like the sales. Additionally, the firm's cash is deposited daily. The computers are used to update records and monthly records are sent to the clients. Furthermore, the organization compares the aged trial balance to the general ledger each subsequent month.

Deficiencies in Internal Control

There are several factors that influence internal controls. These include inadequate segregation of duties within the accounting process (Biggs & Mock, 1983). In addition, the deficiencies may arise due to poor training of employees to fulfill their assigned duties and inadequate documentation of internal control components among other factors.

First, the supervisor enters all sales in the cash register, recaps sales and cash, and compares the totals to the sales as well. In addition, she also receives all invoices from sales clerks. This deficiency is offset by the daily summary form prepared by sales clerks and used to calculate sales clerks' commissions.

The second deficiency is the lack of accounting for a numerical sequence of sales invoices. This deficiency is partially offset by control totals used by comparing sales clerks' and supervisor's control totals.

The next is lack of internal verification of key entry for customer name, date, and sales classifications on either cash receipts or sales.

Besides the company has no internal verification of general totals, posting to accounts receivable master file, or posting to the general ledger.

Finally, Lady's Fashion Fair lacks internal verification of all of the accounting work done by the accounts receivable clerk.


Institution of efficient internal controls is necessary since they help organizations generate reliable financial reporting and remains compliant to laws and necessary regulations. Nevertheless, the achievement of strategic objectives is dependent on factors such as competition, technological innovation among others and as such, internal control cannot guarantee their achievement. In addition, effective internal control plays an important role in the prevention and detection of fraud. Moreover, according to the Sarbanes-Oxley Act, companies are required to perform a fraud risk assessment and assess related controls.


Biggs, S.F., & Mock, T.J. (1983). An Investigation of Auditor Decision Processes in the Evaluation of Internal Controls and Audit Scope Decisions. Journal of Accounting Research Vol. 21 No. 1, 234-255.

Caplan, D. (1999). Internal Controls and the Detection of Management Fraud. Journal of Accounting Research Vol. 37, No.1, 101-117.

Krishnani, J. (2005). Audit Committee Quality and Internal Control: An Empirical Analysis. The Accounting Review, 649-675.

Rezaee, Z. (2002). Financial Statement Fraud: Prevention and Detection. New York: Wiley.

The Institute of Internal Auditors. (2004, January). What is Internal… [read more]

Independence Between Auditor and Client Essay

Essay  |  3 pages (843 words)
Bibliography Sources: 2


Independence Between Auditor and Client:

Auditor independence is largely regarded as the cornerstone of the auditing profession because it's the basis for public trust in the proof function. The independence of an auditor is guaranteed if he/she is has the capability of making free audit decisions. In this case, these auditors have the ability to make such decisions despite of perceived lack of autonomy and if they are in a potentially compromising situation. On the other hand, there is need for independence of clients during the financial statement audit engagements. The clients should be free to evaluate information on the financial statement objectively without influence from the auditor. Generally, auditor independence is used to promote and support reliance on the financial reporting process.

Auditor Independence:

As the cornerstone of the auditing profession, the independence of an auditor is vital in ensuring that these professionals present unbiased audit decisions. Independence is a word commonly used in accounting in conjunction with services offered by auditors and certified accountants to their clients. The most common services provided by external auditors that need independence include auditing internal control over financial reporting, financial statements, and confirming the management affirmations of internal control over financial reporting. The independence of an auditor can be classified into two categories as explained below & #8230;

Independence of Mind:

This kind of independence enables the professional to perform his/her services without any influence that compromise his/her professional judgment. As a result, the independence of mind allows auditors exercise objectivity, professional skepticism, and to act with integrity (Greene, 2008).

Independence in Appearance:

This category of independence basically entails avoidance of situations that could make a reasonable and informed third party with relevant information to logically conclude that the objectivity, integrity, or professional skepticism of the auditor has been compromised.

Client Independence:

The independence of the audit client is needed not only during the engagement period but also the period of the entire financial statements. This financial statement audit engagements normally begin when the audit team starts to conduct the auditing services and ends when the audit report has been presented. In cases with financial engagements of a recurring nature, the period ends through a later notification by either party of the termination of the relationship or the submission of a final audit report.

It's important to note that the audit client can be a firm involved in the financial statement audit engagement. Similar to individual clients, these clients are also required to have independence through which they can freely express opinions in…… [read more]

Professionalism Accounting Essay

Essay  |  4 pages (1,049 words)
Bibliography Sources: 3


The idea of being objective may be so sublime that it is often misunderstood. Totally removing subjective ideas within the accounting profession will help further characterize this grouping. Being objective requires the accountant to remove him or herself from the emotional and subjective nature of the intense and sometimes stressful tasks of directing financial energies. Management and other influences will no doubt have certain subjective pressures to perhaps tilt a decision one way or the other. Being objective is sometimes very difficult due to personal influences and the temptation to increase one's own value through subjective manipulation. This is what separates the professionals from nonprofessionals. This status is earned due to the ability to remain objective and remember fairness as a priority. Therefore it is very important for all accounting professionals to remain objective is much as possible.

Although integrity, objectiveness and selfless service are worthy attributes, they are useless without some form of competence within the accounting profession. Competence is the ability to use information in a purposeful manner. Understanding and grasping the situation at hand is a hallmark sign of competence. Competence requires dedication to learning and adopting new and more effective ways of completing tasks. Education almost always accompanies competence and those wishing to maintain professional standing within this profession must be prepared to continually educate themselves about whatever is necessary to complete the task.

Professionalism within the accounting profession requires leadership most of all. Not being afraid to do the right thing in times of trouble will characterize the professionalism of accounting and financial management. Pleasing everybody within an organization is unrealistic. It is therefore most important to adhere to some standards and some rules that are useful and beneficial to the overall mission. Professionals are paid to give their opinion, so it should be well thought out and conveying a true understanding of their experience.

"The sheer number of accounting abuses is prima facie evidence that something more is needed in terms of accounting ethics. What else needs to be done is less clear " (Armstrong et al., 2). This message conveys understanding to me that it is the individual's responsibility to determine what is ethical in the particular situation the accountant is found. Objectivity, while importan, t needs to be understood so that each object is subjectively interpreted and different situations will call upon different solutions to become successful. This gap of consistency can only be filled by leadership and the courage to do what is right.

Professionalism and it's tenants are worthwhile points of examination for the aforementioned reasons. Professionalism, in theory, is not much use until the students of its lessons practice what they have learned. This is the defining point of whether professionalism within accounting has utility. Keeping in mind the characteristics of professionalism, however is a simple map to help align oneself to the standards set out to ensure success and evolution toward something better.

Works Cited

Armstrong, Mary Beth. "Ethics education in accounting, moving towards an ethical motivation and… [read more]

Auditing in the Public Sector Term Paper

Term Paper  |  8 pages (2,594 words)
Style: MLA  |  Bibliography Sources: 9


Auditing in the Public Sector

Good governance demand accountability and transparency in the management of public resources. The diverse nature and size of government expenditure make public sector auditing necessary and indispensable. Auditing is the examination of the financial statements of an organization in order to express independent and objective opinion on whether the statements give a true and fair… [read more]

Accounting Policy Setting Using Ex-Ante Term Paper

Term Paper  |  10 pages (3,205 words)
Style: Harvard  |  Bibliography Sources: 10


The team likes this form of efficiency, especially if they are from a small market, because it gives them some cost control with players who may cost too much to retain if they wait too long to sign a contract.

For any type of contract there are going to be transaction costs. With the example above, the player will possibly… [read more]

State of Accounting Convergence Among Large Public Companies Introduction Chapter

Introduction Chapter  |  6 pages (1,792 words)
Style: Harvard  |  Bibliography Sources: 10



Since 2002, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have been working towards the convergence of international financial reporting standards and U.S. reporting standard under the generally-accepted accounting principles. The state of this convergence both at the regulatory level and at the practical level in American accounting departments is of interest to a… [read more]

Accounting System Accounting Information Business Plan

Business Plan  |  6 pages (1,544 words)
Bibliography Sources: 5


This will also increase the flexibility and the degree of tailoring that can be provided to the homeowner's association, and the accounting firm will be more easily able to adapt the system to future clients, as well. All of this provides an ultimate cost savings and performance enhancement to the homeowner's association, and will better utilize the knowledge, expertise, and development of accounting firm staff (Turner & Weickgenannt 2009).

Challenges to Automation

Though automation is relatively simple to employ in this case and is well-founded based on current literature and investigations, there are certain challenges inherent to its use (Kruck 2011; Turner & Weickgenannt 2009; Romney & Steinbart 2011). Changes to processes or the environment in which processes occur must be continually incorporated into all segments of the automation process, and it would potentially be easy to overlook a seemingly minor detail that could disrupt the accuracy of output requirement. Regular manual auditing of all automated processes to ensure accuracy and reliability is necessary to meet these challenges.


AICPA. (20110. AICPA Publishes New Attest Guidance for Reporting on Controls at a Service Organization. Accessed 30 October 2011. http://www.aicpa.org/press/pressreleases/2011/pages/aicpapublishesnewattestguidanceforreportingoncontrolsataserviceorganization.aspx

COSO. (2009). Guidance on Monitoring Internal Control Systems. Durham, NC: COSO.

Kruck, S. (2011). The emergence of accounting information systems programs. Accessed 30 October 2011. http://www.allbusiness.com/accounting/3504565-1.html

Romney, M. & Steinbart, P. (2011). Accounting Information Systems. New York:…… [read more]

Sarbanes-Oxley Act on Auditing Changes Research Paper

Research Paper  |  2 pages (626 words)
Bibliography Sources: 2


This particular reform significantly improved the transparency and independence of the reporting process. A study of the contents of the audit committee reports from the 2003 and 2004 proxy statements of 100 randomly selected companies listed on the NYSE found significant improvements in terms of the "clear identification of the financial experts on the committee; a definitive conclusion about the independence of the auditor; and a disclosure about the policy regarding the preapproval of nonaudit services" (Pandit, Subrahmanyam, & Conway 2005).

Critics of Sarbanes-Oxley said that the Act's main beneficiaries were audit firms, which experienced a boom in business as companies had to comply with its more complicated reporting requirements. Additionally, some critics said that the change in the mentality of many firms and the corporate culture of the U.S. was the primary reason for apparent improvements in accounting compliance and ethical standards. However, the above-cited study seems to suggest otherwise: concrete changes were manifest in audit reports. Sarbanes-Oxley mandated the empowerment of figures within the auditing process that were disempowered before. Today, "Sarbanes-Oxley has made it okay for directors to speak up in board meetings. There were directors previously who weren't sure what they were doing or that their opinion mattered, who now have become emboldened because it's clear that independent directors can have a voice in the operation of the board" (Has Sarbanes-Oxley made a dent in corporate America's armor, 2004, Knowledge @Wharton). While Sarbanes-Oxley did not provide a remedy for every single potential loophole or abuse, it injected more independent voices into the auditing process through the creation of audit committees without a stake in the final outcome of the review.


Has Sarbanes-Oxley made a dent in corporate America's armor? (2004).

Knowledge @ Wharton. Retrieved August 26, 2011 at http://knowledge.wharton.upenn.edu/article.cfm?articleid=823

Pandit, Ganesh M. Vijaya Subrahmanyam, & Grace M. Conway. (2005). Audit committee reports before and…… [read more]

Fraud Audit and Investigation Essay

Essay  |  2 pages (681 words)
Bibliography Sources: 2


Fraud Audit and Investigation

Define the Scope of the Audit and the Desired Outcomes

The scope of the Torpus audit is to examine the entire balance sheet and net worth of the company. Where, you will look at every aspect of the financials and physical operation. The idea is to identify any kind of issues that could have an impact upon the company receiving the loan. This is important, because it will help to show the bank that Torpus has: an economically viable business plan and that they are a good credit risk. When you put these different elements together, it will provide the loan officer with enough information to objectively analyze the business. (Siegle, 2008) (Beasley, 2008)

The desired outcomes of the Torpus audit are: to address any kind of transparency issues and identify areas that could have an impact upon the profitability of the company. Once this takes place, it will provide executives at the bank with a total overall big picture view of the underlying financial strength of the organization. (Siegle, 2008) (Beasley, 2008)

Identify and explain at Least Three Types of Information to be audited

The three different types of information that will be audited include: the accounts payable, the accounts receivable and the balance sheet. The accounts payable is the total amount that the company owes to: suppliers, employees and creditors. The accounts receivable is the total amount of that Torpus is receiving from its customers. These different pieces of information are complied and reported to: officers, directors as well as shareholders of the company in the form of the balance sheet. This is a consolidated summary of the total expenses and profits that were received over a period of time. All these various types of information are important, because they will tell auditors and the bank the underlying financial strength of the company. At which point, they can make an accurate assessment, as to if loaning Torpus the funds they require is financially prudent. (Siegle, 2008) (Beasley, 2008)

Discuss how the Interviews will be…… [read more]

PCAOB Recently Released Staff Audit Practice Alert No 5 On 4 7 2010 Essay

Essay  |  2 pages (544 words)
Bibliography Sources: 0



Staff Audit Practice Alert No.5 is titled "Auditor Considerations Regarding Significant Unusual Transactions." The alert reminds auditors that when determining the fitness of a set of financial statements they must consider significant unusual transactions and the disclosure thereof. If significant unusual transactions are not well-disclosed, the auditor has the duty to withhold his or her approval until the situation is rectified, typically by adequately disclosing the transactions in question.

In order to do this, the auditor must be sufficiently familiar with the company's business as to understand the business rationale for such transactions. If that rationale does not exist, this may suggest "that the transactions may have been entered into to engage in fraudulent financial reporting." If the auditor does not have sufficient knowledge of the company's business to make such a determination, the auditor should seek out such an individual to assist with the determination. Doing so would remove the possibility that an auditor could be fooled into signing off on fraudulent statements simply because he or she did not understand the complexity of the transactions that went into the statements.

The purpose of the alert issued by the PCAOB was to compile the different rules regarding significant unusual transactions, which appear in different sections of the accounting standards. The standard also categorizes existing requirements for unusual transactions into five different categories. What the alert does not do is introduce new standards for auditors; it merely serves as a means to bring the existing standards together in a single document.

At the heart of the issue is the amount of knowledge that an auditor has about the company's business. The…… [read more]

Accounting for Income Taxes Term Paper

Term Paper  |  10 pages (2,863 words)
Bibliography Sources: 5


Accounting for Income Taxes

The role of the tax professional has changed substantially in the past decade. Previously, the focus was on tax planning and the marketing of tax products. The focus today is more on the corporation's tax provision and compliance work. This shift has occurred as the result of changes in the regulatory environment. In particular, the enactment… [read more]

Managerial Accounting Sue Davis Term Paper

Term Paper  |  2 pages (612 words)
Bibliography Sources: 2


Managerial Accounting

Sue Davis is faced with an ethical dilemma with regards to the allocation of $2 million in research and development funding. According to company policy, she is obligated to allocate the funds to Project K3. Doing so will result in the project taking a loss. This will impact corporate profitability and result in Davis forgoing her bonus. If she allocates the funding to two new projects, she may be able to retain the profitability and the bonus. Although this practice is expressly prohibited, the risk of detection is low (Cohen, Pant & Sharp, 2000).

It is proposed that Sue allocate the funds to K3 as policy requires. Sue's decision-making process does consider her personal gain in that she is subject to an incentive system whereby she has the potential to benefit personally from her allocation decision, to the detriment of other stakeholders. There are three factors that influence this decision. The first is her reputation, which would be damaged if K3 comes in at a loss. The second is the direct reward to Davis, which would be her $20,000 bonus. The third is the profitability of the company, which will take a hit if the project comes in at a loss. However, Davis risks doing considerably more damage to her career if she improperly allocates these costs and is discovered. Such an act would violate the agency relationship with the company and its shareholders and this type of violation is considered to be very serious by the company.

As the VP of Research & Development, I recommend the following steps to ensure proper allocation of costs. The first is that cost allocations be subjected to periodic audit. This increases the likelihood of improper allocations being discovered. The second recommendation is to improve our cost tracking systems. This will make the audit process easier. The…… [read more]

External Auditing Essay

Essay  |  8 pages (2,960 words)
Style: Harvard  |  Bibliography Sources: 10


External Auditing UK

Modern corporations are run by directors and managers, who are essentially investing the funds of investors. These managers owe a fiduciary duty to the investors, but as far back as Adam Smith it was recognized that managers could not be expected to treat the money of others with the same care that they would treat their own.… [read more]

Sarbanes-Oxley Impact on Auditing Thesis

Thesis  |  5 pages (2,046 words)
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Sarbanes-Oxley Impact on Auditing

The Impact of the Sarbanes-Oxley Act on the Auditing Profession

The accumulated effects of government-defined compliance legislation on the auditing profession has created significantly greater opportunities for providing services, yet has also introduced an entirely new and higher level of complexity as a result. The intent of this paper is to evaluate how the Sarbanes-Oxley Act… [read more]

Role of Accounting in Economy Essay

Essay  |  5 pages (1,321 words)
Style: MLA  |  Bibliography Sources: 4


Role of Accounting in Economy

The objective of this work is to discuss the basic theories of accounting focusing on capital and money as well as the role of accounting in the economy.

Accounting's role is central to decision making in the economy. The work of Hoggett, Edwards and Medlin (nd) states that accounting "is a service activity" which uses "words and symbols to communicate financial information useful for decision making." It is related that the terminology and symbols used in accounting "have developed from the earliest known accounting records." (Hoggett, Edwards and Medlin, nd) the accounting profession has "evolved in response to society's need for economic information to help people make economic decisions." (Hoggett, Edwards and Medlin, nd)


Accounting is stated to have been referred to as the "language of business." (Hoggett, Edwards and Medlin, nd) Accounting has been further defined "as the process of identifying, measuring, recording and communicating economic information to permit informed judgments and economic decisions." (Hoggett, Edwards and Medlin, nd) Accounting's primary purpose of accounting is stated to be assisting individuals in making economic decisions. Accounting information "provides the basis for making decisions about resource allocation. To be useful, data must be identified, measured, recorded, classified, summarized and communicated to potential users." (Hoggett, Edwards and Medlin, nd)


Hoggett, Edwards and Medlin state that the primary objective of accounting is the provision of information in the form of reports "which can be used by internal and external decision makers." (Hoggett, Edwards and Medlin, nd) Reports which are prepared for the benefit of decision makers external to the entity are referred to as 'financial accounting'. These users include "investors, or creditors of the entity." (Hoggett, Edwards and Medlin, nd) Inside users includes members of management who use the "same financial statements as outside decision makers, plus internal reports and summaries prepared specifically for it." (Hoggett, Edwards and Medlin, nd) Accounting reports may be in one of two forms:

1) special-purpose reports; and 2) general-purpose reports. (Hoggett, Edwards and Medlin, nd)

Special purpose reports are designed to meet the "needs of a specific users group" while general-purpose reports are designed for the "general use of external users." (Hoggett, Edwards and Medlin, nd)


The role of accounting in the decision-making process is one that is central. "Financial accounting information focuses on actual events." (Hoggett, Edwards and Medlin, nd) the accountant is able to significantly assist in the areas of:

1) budgeting;

2) investigating;

3) interpreting; and 4) communicating results used by both external and internal decision makers.

Stated as the difference between management and financial accounting is the reference to:

1) the main users of the reports;

2) the types of reports produced;

3) the frequency of reports;

4) the content and format of reports; and 5) External verification. (Hoggett, Edwards and Medlin, nd)


In a speech given by Rene Ricol, President of the International Federation of… [read more]

Auditing Standards in Australia Term Paper

Term Paper  |  8 pages (2,317 words)
Bibliography Sources: 1+


Auditing Standards in Australia

The objective of this work is to examine Auditing Standards in Australia.

This case study conducts an examination of the Auditing Standard in Australia and specifically the 'Auditing Standard ASA 200' published in April 2006. The Auditing Standard ASA 200 is issued by the 'Auditing and Assurance Standards Board'. The purpose of the 'Auditing Standard' is… [read more]

Accounting Ethics Dilemmas Term Paper

Term Paper  |  3 pages (1,022 words)
Style: APA  |  Bibliography Sources: 2


Accounting Ethics Dilemmas

A problem in terms of conflict of interest and a lack of objectivity could arise in this case. While there is no particular problem in performing the audit itself, the CPA could be tempted to hire only persons from his or her own firm, or acquaintances, rather than objectively engaging in the recruitment and hiring process. The problem could be resolved by honestly discussing the issue and possible problems with the client. The CPA and the client together can then discuss the best course of action, and possibly engage in the recruitment and hiring process together. This will ensure not only objectivity on the part of the CPA, but also that the client is happy with the result. This relates to Rule 102-2.03 of the AICPA Code of Ethics, which concerns conflicts of interest and objectivity. The rule states that client consent needs to be obtained in performing a duty that might involve a lack of the necessary objectivity.

NO. 2 There are certain steps to follow as specified in Section 191.52.103 of the AICPA Code of Ethics, as concerns unpaid fees. Unqualified statements can only be provided once a year has expired more than a year prior to the new report. The CPA is therefore within his or her rights to issue the opinion, as the audit has further been conducted within the auditing standards.

NO. 3 Since the CPA is only starting a new practice, he or she cannot make any claims to be either a "specialist" or an "expert" in anything. However, the necessity for attractive advertising is recognized. Rather than making claims that are untrue, therefore, it is recommended that the advertiser takes a more general approach, such as stating his or her "experience" for a number of years. This relates to Rule 502.03 of the AICPA Code of Ethics, which concerns "false, misleading or deceptive acts in advertising or solicitation. The Rule states that placing deceptive advertisements is not in the public interest, and is therefore prohibited.

NO. 4 in this case again there is a conflict of interest. The temptation could be to provide very favorable evaluations for the commercial service bureau in which the firm's partners have a material interest. Once again, in accordance with Rule 102-2.03 of the AICPA Code of Ethics, it is recommended that the CPA honestly discuss the issue with the client. The client could then for example retain the CPA in this regard, but in concomitance with other professionals in order to ensure the necessary objectivity.

NO. 5 According to Section 92.06, Rule 101-4 of the AICPA Code of Ethics, a CPA is within his or her rights to provide services or lend his or her name to not-for-profit organizations without compromising his or her independence. It is therefore not incorrect to include this in a CV, as long as the exact nature of the service and organization is stipulated.

NO 6. Identifying only himself as CPA could be misleading to persons making use of… [read more]

Contemporary Issues in Accounting Term Paper

Term Paper  |  4 pages (1,375 words)
Bibliography Sources: 0


Accounting practices has dramatically changed within the past few years because of the calamitous undertakings of some of the world's most prestigious companies. Loopholes within accounting regulations and the general greed of American corporations have led to significant issues in accounting practice. Most prominent among these issues has arisen the case of Enron, the biggest financial and accounting blunder of the past mellenium. Perhaps the most shocking aspect of the Enron scandal is the depth of deception and the complex methods used to exploit accounting weaknesses. Therefore this detailed analysis will look into how Enron's failure attributed to the exploitation of accounting practices and how accounting has changed because of the specific policies applied to Enron.

It took only months for the collapse of one of the world's greatest corporations. Enron was highly regarded, a mere two months before its collapse as one of the world's greatest innovators, with its focus on developing cutting edge technology and increase growth in every sector. With its collapse, an entire nation was devastated by its financial implications especially on numerous 401K accounts. Yet no one was able to raise an alarm until it was too late, the reason for the lack of anticipation is a massive failure within the accounting system to keep reliable records of the firm's actual condition.

The accounting techniques used within the Enron scandal were very complex and hard to catch, they involved two very hard to detect relationships, unconsolidated partnerships and the formation of "special purpose entities." Using these two methodology, they were able to prevent significant revenue loss from appearing in their financial records as well as conceal the existence of any debt the company procured. It was when these results actually came to the forefront that the world soon realized that most of the earnings that the company claimed in the past two years were completely falsified.

The first major accounting blunder comes from the ineffectiveness of the current U.S. auditing methodology. The SEC regulations state that public corporations need to have their finances certified by an independent auditor. However, since there are little to no regulation on the auditing process nor any control mechanisms to prevent collusion, Enron was able to employ an individual like Arthur Anderson who willingly lied and cheated with his co-conspirators. Previously, oversight of all auditing practices and auditors have lied with the American Institute of Certified Public Accountants which is a non-government trade group as well as independent state boards. However, this is clearly not stringent enough as Enron was not an isolated incident (both World Com and Tyco had similar problems), therefore the SEC and the current administration have used several different methodologies to prevent future exploitation. The creation of a new auditor oversight authority linked to the SEC is the latest trend, and this is especially necessary in light of the decentralized regulation within this sector. However, all of these was trumped by the passage of the Sarbanes-Oxley bill, which will forever change the face of auditing practices.… [read more]

Accounting Ethics Term Paper

Term Paper  |  4 pages (1,283 words)
Bibliography Sources: 1+


¶ … Accounting Code of Conduct. The writer explores the Code of Conduct and discusses its value and merit with regards to the accounting profession. There were three sources used to complete this paper.

At first glance the average laymen would be hard pressed to explain why accountants need a code of conduct in the profession. People are aware of the doctor and attorney professional vows or promises to follow certain ethical rules because of the severe damage they can do if they become unethical. Once one begins to explore the accounting profession, however, one will quickly discover that accountants have the ability to do great harm as well (Demski, 2000). Accountants have the financial survival, future, and life of their clients in their hands. If an accountant decides to become unethical he or she could easily destroy an individual, a family, a corporation or a government entity. Every year society hears about someone being financially destroyed because of the unethical dealings by their accountant. While the majority of accountants in the world are honest and fair and provide a valuable service the code of conduct is in place to provide a blueprint tangible standard of measurement to guide accountants in their practice.

For more than a century, the accounting profession in the United States has provided these valuable services to public and private organizations. The best CPAs ensure they are performing their responsibilities with technical competence and the highest ethical standards by adhering to a strict code of conduct Actually, there are several codes, each comprised of numerous technical and ethical guidelines (Badawi, 2002)."

The first measure of responsibility for an accountant, (CPA) is to be sure he or she is complying with the standards set out in the Generally Accepted Accounting Principles. This standard provides a foundation for practice across the board. In addition they are expected to conform with the Generally Accepted Auditing Standards which is set out to protect the client in the event of an audit (Badawi, 2002).

They are also expected to follow tax rules promulgated by private and government standard-setting and regulatory bodies, such as the Financial Accounting Standards Board (FASB), American Institute of Certified Public Accountants (AICPA), Securities and Exchange Commission (SEC) and Internal Revenue Service (IRS). And, they are counted on to conduct themselves according to the ethical rules prescribed in the bylaws or codes of any accounting groups they have joined (Badawi, 2002)."

While this may initially appear to narrowly define the profession and remove any freedom or creative aspect of it, it really only provides a professional guideline for setting up a professional practice.


The code of conduct was originally designed for the purpose of influencing the practice and judgment of professional accountants. The code has been amended and altered by various accounting organizations in the quest to better the ethical responsibility and to fit it to the tailored needs of that organization or outfit.

The most recent adaptation of the code was done in 1988. Prior to… [read more]

California's Accounting Code of Ethics Term Paper

Term Paper  |  4 pages (1,051 words)
Bibliography Sources: 1+


California's Accounting Code Of Ethics

Ethics has always been an important part of business transactions. Freedoms of information, stricter government regulations and electronic media have made ethics even more essential to business practices. California's code of business ethics expects the accountants and accounting related professionals to be ethical with their clients as well as the accounting system.

In order to perform their work independently and deal with client-accountant relationship Californian system protects accountant-client privilege similar to that of a lawyer-client relationship with a few exceptions.

The accountants have to carryout their work in a professional manner. Code violations such as fraud, misrepresentation, and negligence could make the client liable to civil or criminal liabilities.


Ethics for accounting professionals can be described as practice of the profession with integrity and objectivity, honesty, and according to the best accounting practices. The client satisfaction is only one part of the equation, but if this satisfaction is built by conceding to all legal and illegal wishes of the client, then this lack of ethic will not create a healthy respect for the accounting professional either in the public eye or that of the client.

The recent financial scandals like ENRON, WorldCom, Global Crossing and others brought a considerable drop in general public esteem for the accounting profession. [Schreiber, 2003] shows his concern regarding the abuses of ethics, writing for California Society of Certified Public Accountants (CPA) he insists that the enforcement and education be used till the few professionals involved in unethical practices learn to maintain the standards of the profession.

All professional accounting bodies have made ethics as an essential part of the accountants training. California Board of Accountancy requires all professionals to take a course in 'Professional Conduct & Ethics'. It is necessary to know the importance of retention of records, significance of confidentiality of client information, ethics of commissions and referral fees and of course the importance of protecting oneself against the violation of ethics and its penalties.

The reality is that most accountants, even those involved in unethical practices know what counts as unethical. It is his judgment regarding whether to please the client by unscrupulous practices or follow the acceptable practices to meet ethical, legal and regulatory bodies' requirements. [Schreiber, 2003] quotes an accounting Professor Mary Beth as saying "The regulatory bodies expect the accounting professionals to 'act in good faith', the tax practitioner must use integrity and objectivity to assess the probability that the IRS (or tax court) would agree with the tax treatment being contemplated if they knew all the facts and circumstances." The accountant has reasonable degree of freedom to satisfy his client as well as the regulatory bodies while marinating his integrity and professional interests.

Accountant-Client Privilege

An important aspect of handling accounting requirements is to have complete trust of the client regarding the information given to the accountant. If the client knows that the information he provides to the accountant is protected and will not be used against him, he/she is more likely… [read more]

Accounting Scandals Term Paper

Term Paper  |  1 pages (338 words)
Bibliography Sources: 1+


Accounting Scandals: With the accounting scandals in 2002 and 2003, many have called for increased government regulations. Will increased regulations help to reduce the kinds of scandals seen in recent years? Why or why not?

The accounting scandals at Enron and WorldCom that implicated such trusted accounting firms as Arthur Anderson did result in more stringent government regulation of the accounting process. Google the phrase 'accounting scandals of 2002' and in virtually every web search engine one types this phrase, the words 'Sarbanes-Oxley Act' appears, including software is designed to comply with the accounting procedures required by this recent, landmark act. But what does the Sarbanes-Oxley Act mean, a sixty-six page act designed, according to the stated purpose of the law, to ensure full and fair disclosure of corporate financial records, with the aim of protecting investors?

The act is considered the single most important piece of legislation affecting corporate governance, financial disclosure and the practice of public accounting since the U.S. securities laws of the early 1930s, after…… [read more]

Ethics in Business: Accounting Standards Term Paper

Term Paper  |  3 pages (786 words)
Bibliography Sources: 0


Timing of testing.

Using the work of others.

Evaluating the results of testing.

Identifying significant deficiencies.

Forming an opinion and reporting.

No disclosure of significant deficiencies.

Material weaknesses that result in adverse opinion on the financial statements.

Testing controls intended to prevent or detect fraud.

One thing that is commonly agreed upon is that the rules have become far too complicated in accounting. One such statement is that of Walter P. Scheueze, Charter member of PSAOB who states: "The rules for financial accounting and reporting in the U.S.A. have become vastly too voluminous, too detailed, too complex and too abstruse. . . . The volume and complexity of those pronouncements have become overwhelming"(Pollock, 2005) Further stated is: "The existence of an organization -- the FASB -- whose sole reason for being is to generate accounting rules naturally guarantees that there will be a continuous production of more rules, and that these rules and their interpretations will grow in complexity because of an inevitable internal dynamic. ... The phrase "generally accepted accounting principles" (GAAP) has come in time to mean the opposite of its original and apparent meaning. When introduced in the 1930s, the term actually meant what it seems to mean: those principles which are subscribed to and used by the majority of knowledgeable, reputable practitioners. It was bottom-up and descriptive in the common law mold. Now GAAP means those rules that are mandated by the FASB, whether or not they are generally accepted and even if they are generally opposed. This is top-down and prescriptive in the manner of statute law. The original meaning has disappeared, as the rules-based approach has become dominant." (Pollock, 2005)

Not only are accountants responsible in their professional judgments they also are under a requirement to follow "ever more prescriptive and detailed rules." (Pollock, 2005)

Summary & Conclusion

The new and differentiated types of technological applications that may be utilized in the accounting process leaves multiple methods open for use in accounting standards and practices. It is held by many experts reviewed in the process of reviewing the literature related to this work in writing that the many applications available have led to an entire new world in accounting. It appears that it is time to lay aside the hard-line regulations and rules and utilize that which is most effect, most expedient, most efficient…… [read more]

Accounting, by Its Nature Term Paper

Term Paper  |  2 pages (656 words)
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Put more simply, the needs of financial reporting in government are markedly different than those in corporate reporting, since governments must demonstrate "compliance with budgets" (ibid1:40). These compliance techniques "sometimes conflict with GAAP" (ibid 1:41) or at least "are not consistent with GAAP" (ibid 1:45)..

What are governments to do about financial reporting, then? To be in compliance with their budgets and other legislative restrictions might mean differing from GAAP/GAAS -- but reporting in complete compliance with GAAP/GAAS might neglect vital information that applies in government but is not a regular part of commercial accounting, for example, income expected from the sale of bonds.

This dilemma is resolved by allowing a few special rules in the GAAP/GAAS for governmental reporting; a specific example of one of these rules is the provision for encumbrances in government accounting. "Encumbrances are treated as expenditures for budgetary accounting, but not for GAAP" (ibid 2:116). Encumbrances, while not reflected in GAAP, do have a significant effect on a governmental budget and need to be disclosed -- this is done by requiring that a government submit a "basic financial statement...in conformity with GAAP" while allowing "supplemental reports or schedules" to be submitted regarding special governmental issues such as long-term assets and liabilities that are not easily encapsulated into an annual report.

The special treatment of encumbrances is only one of many ways that government accounting differs from GAAP/GAAS. However, the need for a uniform financial reporting system mandates some compromises -- the government must submit, at the least, a basic statement that is in compliance with GAAP/GAAS. If more detailed reporting is required, for example, in a long-term asset situation like a bond, then a supplemental report may also accompany the comprehensive report. Although governmental accounting is inarguable different from standard commercial accounting, baseline standards of conformity must be maintained in order to provide a reliable report.… [read more]

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