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Cardsmax the Accounting and Auditing

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…

Pages: 3  |  Essay  |  Style: n/a  |  Sources: 0


Forensic Accounting in Practice

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…

Pages: 5  |  Research Paper  |  Style: n/a  |  Sources: 5


Business and Leadership Peter Northouse,

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. References Bolman, L. & Deal, T. (2003).Reframing Organizations: Artistry, Choice, and Leadership. Boston: Jossey-Bass. Northouse, P. (2003). Leadership: Theory and Practice. Los Angeles: Sage.…

Pages: 6  |  Term Paper  |  Style: n/a  |  Sources: 0


Accounting Careers

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…

Pages: 14  |  Term Paper  |  Style: n/a  |  Sources: 9


Accounting in Crisis

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……

Pages: 2  |  Term Paper  |  Style: APA  |  Sources: 2


Conservatism in Accounting Valuation

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…

Pages: 18  |  Research Paper  |  Style: APA  |  Sources: 20


Accounting the Most Effective Means of Achieving

¶ … 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…

Pages: 9  |  Essay  |  Style: n/a  |  Sources: 9


Ethics Ensuring Accounting Ethics Through Regulation There

Ethics 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……

Pages: 2  |  Term Paper  |  Style: APA  |  Sources: 2


External Auditing

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…

Pages: 8  |  Essay  |  Style: n/a  |  Sources: 10


State of Accounting Convergence Among Large Public Companies

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. Methodology 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……

Pages: 2  |  Research Proposal  |  Style: Harvard  |  Sources: 5


Internal Auditing on Environmental Performance Can Enhance Organization's Value

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…

Pages: 5  |  Research Proposal  |  Style: n/a  |  Sources: 15


Certified Public Accountants (Cpas) Are Found in

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…

Pages: 6  |  Term Paper  |  Style: n/a  |  Sources: 0


CPA Profession the Accounting Profession

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. Conclusion 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…

Pages: 4  |  Term Paper  |  Style: n/a  |  Sources: 0


Texas Uniform CPA Exam While

¶ … 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…

Pages: 10  |  Term Paper  |  Style: n/a  |  Sources: 10


Accountants Responsibility

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. References 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…

Pages: 5  |  Term Paper  |  Style: APA  |  Sources: 5


SOX 404

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…

Pages: 17  |  Term Paper  |  Style: APA  |  Sources: 20


Sarbanes-Oxley Research Proposal Abstract the Intent of

Sarbanes-Oxley Research Proposal Abstract 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…

Pages: 3  |  Term Paper  |  Style: APA  |  Sources: 10


Professional Exams

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…

Pages: 4  |  Term Paper  |  Style: MLA  |  Sources: 4


Audit Plan Outline Over the Last Several

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 Section Principle 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…

Pages: 3  |  Term Paper  |  Style: n/a  |  Sources: 2


Audit Planning Is the First

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…

Pages: 5  |  Research Paper  |  Style: n/a  |  Sources: 3


Audit Quality and Agency

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…

Pages: 15  |  Research Paper  |  Style: n/a  |  Sources: 0


Auditing in ERP System Environments

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,…

Pages: 3  |  Research Paper  |  Style: n/a  |  Sources: 1


Developments in U.S. Auditing Standards and IFRS

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. Conclusion 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. References 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.…

Pages: 5  |  Research Paper  |  Style: n/a  |  Sources: 4


Auditing New Century Financial Corporation

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…

Pages: 5  |  Essay  |  Style: n/a  |  Sources: 0


Accounting Profession in 2014

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…

Pages: 15  |  Essay  |  Style: n/a  |  Sources: 2


Planning the Audit

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 Partner Western Financial Services Address] Gentlemen: 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……

Pages: 3  |  Term Paper  |  Style: n/a  |  Sources: 0


Accounting International Accounting and Auditing

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. < http://www.ifrs.org/How+we+develop+standards/How+we+develop+standards.htm> "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. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1263002 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>…

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Accounting for That Quite Likely M Ay

¶ … 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…

Pages: 7  |  Research Paper  |  Style: n/a  |  Sources: 3


Audit Quality and Agency

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…

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Internal Auditing Over the Past Two Decades,

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…

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Auditing the Role of Databases in the

Auditing 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…

Pages: 16  |  Essay  |  Style: n/a  |  Sources: 0


Information Technology (IT) Auditing

Internal Auditing IT Aduiting Auditing 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…

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Influence of the French Accounting System on a Former French Colony

¶ … 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…

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SOX the Sarbanes-Oxley Act (SOX)

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. 3. 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. 4. 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…

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Governmental Accounting

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…

Pages: 6  |  "Data Analysis" Chapter  |  Style: n/a  |  Sources: 0


Lease Accounting Changes the Author

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). Conclusion 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. References AASB. (2013, September 2). AASB -…

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Sarbanes-Oxley Act the Objective of

" (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. Summary 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. Conclusion It is the opinion of this writer that the Sarbanes-Oxley Act should prove to be very effective in gaining compliance…

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Accounting Ethics

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…

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Auditing of Enron Corporation Responsible

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. .…

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Small Accounting Firm Can Add

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,……

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