Study "Accounting / Auditing" Essays 276-327

X Filters 

Ethics and Independence Term Paper

… The effects of ethics on the profession have been many, not all of which are perceived as negative. In fact many effects have resulted in a higher ethical standard. Professionals that are accustomed to working independently are finding more and more that their actions are monitored, measured and assessed to ensure that they are upholding the highest standard of ethical behavior at all times. This trend will likely continue through the next decade, until the public is once again assured of the competency and ethical nature of the business.

Individuals working within the profession will continue to be subject to regular auditing and monitoring of performance. This should however, be viewed in a positive light, as a method for ensuring that the profession is serving the best interests of the public, rather than acting in a manner that is self serving and unproductive.


Dettmer, J. (2002). "Enron casts dark shadow on academe." Insight on the News, 18(9):


Rothenburg, E. (2003). "Incorporating business ethics into introductory accounting courses." The CPA Journal, 73(10): 6

Sack, R. (1991). "Integrating ethics into the accounting curriculum." Journal of Accountancy, 172(4): 43

Student Text. "Ethical Issues." Chapter 4, Professional Ethics, p. 75

Warth, R.J. (2000). "Ethics in the accounting profession: A study." CPA Journal,


Chapter 4, Professional Ethics, p. 75.

Op. cit ibid.

Op. cit. ibid, p. 76

ibid, p. 77.

Ibid, p. 76.

Warth, R.J. "Ethics in the accounting profession." P. 68




Rothenburg, E. "Incorporating Business Ethics into Introductory Accounting Courses." P. 6


Sack,…… [read more]

Ethics in Accounting and Financial Decision-Making Term Paper

… ¶ … Spinning the numbers: handling an ethical dilemma over accounting practices can be doubly difficult when it's not certain that the practices themselves would breach the bounds of acceptability - Ethics" (December 2002) HR Magazine.

This article, entitled, "Spinning the numbers: handling an ethical dilemma over accounting practices can be doubly difficult when it's not certain that the practices themselves would breach the bounds of acceptability - Ethics" from HR magazine (December 2002) begins with a compelling scenario. Unlike the dilemmas of black and white that have gripped the headlines, this article presents what is often known as an ethically grey scenario, where one member of a firm lets the other member know that he uncertain of what to do because "there's something going on at work" that is troubling him as an accountant, from an ethical point-of-view.

As the article progresses, Jim then tells Fred, over the course of this hypothetical scenario, that in strict confidence -- "the company's chief financial officer was planning to have Summitt take an aggressive stance on sales revenue reporting that, in Jim's view, would stretch the boundaries of acceptable accounting practices." (HR Magazine, 2002) in other words, the accounting practices that would now be adopted could put the firm in possible jeopardy -- not only were they legally and ethically questionable, but if brought to light, could put the firm under public scruitny. On one hand, Fred, the aforementioned and unwilling confidant of Jim, does not want to be a party to potential improprieties, but on the other hand he does not want to put company stockholders in financial jeopardy by disclosing evidence that could injure the firm's otherwise blameless and salutary reputations.

Jim's lack of specifical knowledge about accounting is no excuse -- and Fred's disclosure is potentially alarming, given that not only did the friends have a personal agreement regarding keeping business to the side during their private meetings, but because he should not, regardless of his troubles, bring other and unrelated members of the firm willy-nilly into this matter.

The first organizational lesson from which to draw from this scenario is that a firm must have an ethical troubleshooter, to which individuals can report troubling matters, without fear of disclosure.…… [read more]

Consolidation of Financial Statement Analysis Term Paper

… In the asset section of the balance sheet, assets are listed in the "order of liquidity" (where liquidity is defined as the ability to convert an economic resource into cash with minimal risk of loss). It is a common practice… [read more]

Healthcare Financial Statements Emphasizes Term Paper

… The American Institute of Certified Public Accountants has issued an accountant guide for the accountants, which they can use to prepare financial statements.

The new guide is applicable to investor-owned, governmental, and not-for-profit organizations whose principal operations consist of providing or agreeing to provide health-care services and that substantially earn their revenues from the sale of goods and services. Also, the guide is applicable to organizations whose primary activities are planning, organizing, and overseeing such organizations, e.g., parent or holding companies of health-care providers. The following types of organizations are within the scope of the new guide:


Nursing homes

Health maintenance organizations or HMOs and similar organizations

Continuing care retirement communities or CCRCs

Home health agencies

Drug and alcohol rehabilitation centers (John Burke, The new Health Care Organizations guide: practical implementation issues).

The accounts department is not in charge of an organization, managers usually are. There is a dire need for managers to interpret the financial statements of their organization.

All managers involved in the running of a business need sufficient knowledge about how to evaluate the financial consequences of decisions taken or plans made.

Managers at all levels have to give input into the budgetary process or have to work with it on a day-to-day basis. The involvement of engineers, production, marketing, sales and distribution managers in the financial management of any business is crucial.

In fact, it is often said that finance is too important to be left in the hands of Accountants (Don't Sit Back When The Accountants Hold The Floor!).

If managers cannot interpret financial statements than they should participate in workshops that would help them to understand them. It is the job of a manager to inquire about all the businesses happening in an organization. Therefore in order to understand the management of a business, managers need to understand the source of the money, its usage and the profit made.

Managers who do not understand financial statements may cause their company to be at great risk. Accountant individuals can cheat managers who do have a sound knowledge of financial statements. Those who have a sound understanding of the financial statement can reach financial goals of the company.

Employees cannot help the CEO achieve financial goals unless they have some understanding of those financial categories they can affect directly. Basically,

employees need to know how their piece of the pie fits into the company's overall financial picture. For example, in a service environment, where time and materials are the source of revenue, sales and project managers cannot help the CEO achieve the budget unless they know what sales and billing targets they have on a monthly and annual basis and how those targets affect other key financial results (Who In My

Company Should Understand The Financial Statements?).

Hence, it is very important that mangers of the healthcare organization understand their organization's financial statement. It is obvious that majority of them will have no idea about accounts. They should however try to make an effort to… [read more]

Sarbanes-Oxley Act Term Paper

… The Board also has the authority to investigate firms who are perceived to be in violation of a certain act, rules or provision.

The New Public Company Accounting Oversight Board (PCAOB) will be required to cooperate with professional accountant groups and advisory groups to increase the effectiveness of the standards setting process.

The Effect of Sarbanes-Oxley on the Accounting Profession

In addition to the mandates outlined above, Sarbanes-Oxley Act allows for additional provisions that seek to prevent conflicts of interests that can be a precursor to corporate corruption. The Act bans what is known as the "revolving door," prohibiting registered CPA firms from auditing any SEC registered client whose chief executive, CFO, controller or equivalent was on the audit team of the firm within the past year. This Act is crucial to help lessen the "you wash my back, and I'll wash yours" mentality. Another significant rule calls for auditors to be rotated every 5 years. This way, no auditor can audit a client for more than five consecutive years. Yet another extremely critical aspect of this act is that auditors can no longer provide consulting services for their clients that fall outside of the realm of the practice of auditors. Under this Act the following list of services are prohibited:

1.Bookkeeping and related services

2. Design and implementation of financial information systems, 3. Appraisal or valuation services (including fairness opinions and contribution-in-kind reports)

4. Actuarial services

5. Internal audit outsourcing

6. Services that provide any management or human resources

7. Investment or broker/dealer services

This list is by no means exhaustive as the Board has the authority to object to other services on a case-by-case basis. It is important to note that firms may provide certain tax services, provided the firm is pre-approved by the board. A huge impact of this Act lies in changes to securities laws which toughen corporate and criminal fraud accountability requirements. While images of Arthur Andersen auditors and Arthur Andersen executives shredding important documents loom in the minds of many, this new accountability rule aims at ensuring guilty parties are punished to the fullest extent of the law. Those who are found to have destroyed, altered, hid or falsified records or documents to impede, obstruct or influence an investigation conducted by any federal agency, or in bankruptcy, with fines or up to 20 years imprisonment, or both.

New Rules, New Practices

The Sarbanes-Oxley Act is, at the very least a pivotal revolution in the way publicly held firms and CPA's conduct business. Once a booming industry, CPA's can no longer look to boost revenues by offering their clients the full gamut of related services such as actuarial services and internal auditing which has now been prohibited by the Act. This requires CPA firms to scale back efforts to up sell other services to existing clients thereby forcing them to seek revenue increasing activities elsewhere. Additionally, the Act requires CPA firms to be more efficient and through self-regulators as they must ensure that they are… [read more]

Goal Is to Attend Term Paper

… I feel that I have the tenacity, work ethic, and strength of character to commit to such a program, and excel. Vince Lombardi said, "The difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather in a lack of will." I believe Lombardi's words wholeheartedly, and understand that commitment and desire are among the most invaluable characteristics that predict success both in school and life.

Over the years, I have learned that greatest challenges often yield the greatest rewards and accomplishments. As such, I am excited to undertake an MBA graduate program in accounting. I feel that this experience will provide me with an opportunity to grow and learn as an individual, and give me the tools that I need to make a contribution to the field of accounting, and society as a whole.

Works Cited

House of Quotes. 13 November 2002.… [read more]

Accountants No Longer Sit Term Paper

… External auditors don't work for a specific company and are brought in to go over the books and help find any discrepancies. They also give advice on how to cut costs and increase profits. Companies are finding using both auditors together can actually save them more money since each has their own level of expertise (1997).

Another opinion for a CPA is working in the manufacturing industry. These accountants are in charge of making sure supplies are ordered and paid for in a timely manner. They also keep up with the expense reports of salesmen and managers who travel for the company. Not only do they order supplies, but they look at ways to cut costs by evaluating each item periodically.


With the different kinds of accounting and various opportunities for CPA's, accounting today doesn't have to be limited to income taxes and IRA's. Those with a love of math will find it a rewarding career field.

Works Cited

Accounting: The Language of Business (accessed 10-25-2002)

Accounting (accessed 10-25-2002). (

Reckers, Philip MJ. "Operationalizing SAS65:a decision aid approach. (Statement of Accounting

Standard; evaluating internal auditors)." The Ohio CPA Journal. (1997) 21 October.… [read more]

Analyzing the Erm Developments Research Paper

… ERM Developments

According to "The Economist Intelligence Unit," one of the primary reasons for financial crisis is not being able to achieve success in risk management. A process by the name, Enterprise risk management is utilized by organizations for identification… [read more]

CPA Standards & Practices Case Study

… ZZZZ Best Company

Ernst & Whinney never issued an audit opinion on financial statements of ZZZZ Best but did issue a review report on the company's quarterly statements for the three months ended July 31, 1986. How does a review… [read more]

HR Best Practices Research Paper

… HR Strategy Plan

The author of this report is charged with concocting a fictional organization of some defined type and industry and then laying forth a human resources plan for that organization. The human resources plan in question will have… [read more]

Enron Bounded Ethicality Is a Psychological Concept Essay

… Enron

Bounded ethicality is a psychological concept wherein a person is unable to fully understand the ethical consequences of their actions. The general idea is that there are times when a person is not capable of fully rational thinking with respect to ethics. People using different types of framing for issues, for example, and this allows them to put on the blinkers. It sounds a bit like an excuse for sloppy decision making, and for making unethical choices, and thankfully the law tends to frown on that type of excuse-making. "I didn't know" might be real, but it's weak. Cops don't let you off your speeding ticket for that stuff.

Chugh, Bazerman and Banaji (2005) point out that in practice, "unchecked psychological processes work against an objective assessment and allow us to act against personal, professional and normative expectations when conflicts of interest arise. Applied to the Enron case, the interesting application is not with Enron but with its auditor, Arthur Andersen. Enron, of course, was breaking the law they knew it. The executives at Enron were flat out criminals and never once were engaged in a moral dilemma. They just made stuff up, robbed and stole, and then they went to jail for it, like all criminals should. They actively sought to hide their crimes -- so there was no bounded ethicality here -- they knew exactly what they were doing and it was consistent with their personal and professional ethics.

Arthur Andersen, though, is a classic case of bounded ethicality. Bazerman and Tenbrunsel (2011) note that one sign of bounded ethicality is when a person has the innate ability to maintain a belief while acting contrary to it. Arthur Andersen, as the auditor of Enron, had a duty of care to report accurately and truthfully about the quality of Enron's financial statements. Specially, it had to certify that the financial statements adequately reflected Enron's financial condition. They did that. The problem is that there was clear conflict of interest because Arthur Andersen was also a consultant for Enron. The consulting income that it earned far exceeded the auditing income. The conflict here is obvious --…… [read more]

Cost Behavior Term Paper

… Thus, the company would not drop either Product X or Product Y. To illustrate, the net income if Product X was dropped would be:

Product W

Product Y

Product Z







Less variable expenses






Selling and administrative





Contribution margin





Less direct fixed expenses





Segment margin





Less common fixed expenses


Net income


And if Product Y was dropped, it would be:

Product X

Product W

Product Z







Less variable expenses






Selling and administrative





Contribution margin





Less direct fixed expenses





Segment margin





Less common fixed expenses


Net income


Thus, we can see that the optimal level of net income is $189,000, and that comes from having Product X, Product Y and Product W. As the three-product product mix.


The net margins for each product are as follows:









This confirms our earlier findings. Product X is the most profitable in the company, and Product Z. would be the least profitable, on a segment margin basis. If there was no constraint on demand, I would choose Product X solely as a means of maximizing profitability at this company. It has by far the highest segment margin of any product, and therefore would deliver the highest profit for the company is that was the product to be pursued.

Segment Margin vs. Contribution Margin

The difference between the segment margin and the contribution margin is that the former takes into account the fixed costs associated with the product, where the latter only takes into account the variable costs. We can see this difference at work when we look at the difference between W. And Z:

Product W

Product Z




Variable costs




Selling & Admin


Total Contribution



less Fixed Costs



Net Income



Product Z. has a contribution margin of $45,000, higher than the contribution margin for Product W, which is $44,000. However, Product Z. also comes with higher fixed costs. This is why segment margin is important -- once those fixed costs are factored in Product W. is found to deliver the higher net income of the two products.


Based on this analysis, it is evident that the most profitable products are the two current products, X and Y. If there is excess…… [read more]

Sarbanes-Oxley Legislation: Pros and Cons Essay

… " (Death, taxes, and Sarbanes-Oxley, 2005, Businessweek). However, given the regulatory expense for taxpayers as well as for companies, the measurable dividends of the legislation remain mixed. "People would like to think that the legislation has forced companies to have better internal controls, and therefore fraud risks are reduced. Yet there is no real evidence that fraud risk or actual fraud has been reduced because of Sarbanes-Oxley" (Coenen 2010). Additionally, small businesses are exempt from many of the stipulations of the law, meaning that they enjoy none of the additional benefits of due diligence and do not have the regulatory scrutiny of their internal controls even though fraud can be committed by any organization of any size.

Implementing the 'bare minimum' controls of Sarbanes-Oxley is unlikely to provide significant benefits in the future as it has not yet provided such salutary effects to date years after is passage. Instead, organizations must go above and beyond and create a culture of transparency in regards to reporting and also engage in risk mitigation regarding the potential hazards of being faced by fraud at any level": "Companies that do the bare minimum necessary for compliance with law will realize little in the way of benefits from Sarbanes-Oxley implementation. They are wasting an important opportunity, and one may question whether such companies are establishing a culture of ethics, transparency, and a commitment to reliable financial reporting" (Beasley & Hermanson 2004). Companies must ask what can go wrong regarding inaccuracies and rationalizations of bad behaviors by managers and engage in their own, industry-specific "evaluations of accounting fraud risks, because weak controls create a greater opportunity for fraud" (Beasley & Hermanson 2004). They must be motivated by the realization of shareholders that fraud is bad for business not simply comply with the letter of Sarbanes-Oxley to obey the law.


Beasley, M. & Hermanson, D. (2004).Going beyond Sarbanes-Oxley compliance: Five keys to creating value. CPA Journal. Retrieved from:

Coenen, T. (2010). Fraud files: How well does Sarbanes-Oxley reduce fraud risk? Daily

Finance. Retrieved from:

Death, taxes, and Sarbanes-Oxley. (2005). Businessweek. Retrieved from:

Guelker, M. (2007). Sarbanes-Oxley Section 404 and the tax department: How companies can capitalize on their SOX investments. (2007). CPA2BIZ. Retrieved from:

How to cope in an uncertain present. (2003). Journal of Accountancy. Retrieved from:

Kushwaha, Raj. (2004) The impact of Sarbanes-Oxley on corporate tax departments. Accounting Web. Retrieved from

Purcell, T & Lifson, D. (2003). Tax services after Sarbanes-Oxley. Journal of Accountancy.

Retrieved from:

Wagner, S. & Dittmar, L. (2006). The Unexpected Benefits of Sarbanes-Oxley

Harvard Business Review. Retrieved from:… [read more]

IFRS and U.S. GAAP Essay

… Contingent assets refer to assets whereby the chances of economic benefits rely on prospective events that cannot be controlled by companies. Because future events are naturally uncertain, these assets do not appear on the balance sheet. Nevertheless, they are present in the financial statement notes of a company. These are assets with rights to a future possible claim and are based on past events. A good example is the possible settlement obtained from a lawsuit. Companies do not adequate guarantee to put the value of the settlement on the balance sheet. As such, companies can only talk about the possibilities in the notes. While GAAP recognizes contingent assets, IFRS does not.

Unique items entail the payment of a lawsuit or sale of the subsidiary. Unique items are categorized as liabilities, which are infrequent or unusual in their occurrence. GAAP supports unique items while IFRS prohibits them. Although infrequent and rare, unique items could be significant and including them might have an impact on a company's financial statements.

d) Which approach best serves the SME community?

IFRS has proven to be serving the best interests of the SME community including multinational corporations. It has generated cost savings and efficiency to companies such as Procter & Gamble as their foreign subsidiaries have incorporated IFRS. For multinational companies, they are already reporting the benefits accruing from the adoption of IFRS. Although some companies have spent more than millions to convert from GAAP to IFRS, this switch has saved them money in the end. Companies using IFRS have gained a strong position in negotiating with credit institutions by decreasing the costs of borrowing. This has been attributed to the positive impact that IFRS has on credit ratings. IFRS has also made it easy for SMEs to implement cross-border acquisitions, initiate partnerships, and create cooperation agreements with overseas entities. All these advantages have bolstered the role of SMEs in the global economy.

The IFRS standard has been beneficial to the SME community, unlike the GAAP: it is disadvantageous to some countries. Critics of GAAP have presented a number of reasons why companies should use IFRS in place of GAAP. In fact, GAAP is uncertain, it does not have enforcement, and it is complex in terms of presenting statements.

The first reason for the disagreement whether to embrace IFRS or U.S. GAAP by SMEs is that GAAP introduces uncertainty in evaluating financial statements. This is because global financial standards of accounting allow managers to practice their own judgment when choosing what to include in their financial statements. This leads to potential errors in financial statements causing investors, shareholders and the public not to have the required belief in a company's financial statements. When financial statements show uncertainty, it prevents companies from acquiring loans from financial institutions. It is not good for SMEs to have uncertain financial statements, and it will certainly be bad for home and host countries of these SMEs.

IFRS offers consistency across the world on how to read and comprehend financial statements. More… [read more]

Koss Corporation Fraudulent Case Study

… She should have sought for approval or authorization of Michael. Sue should have cautioned Michael to review financial reports and statements in detail.

Responsibilities of:

a. American Express

American Express noticed an unusual, ongoing practice and notified Michael Koss about a fraud. This involved Sue, who had paid her personal credit card balances through numerous wire transfers from Koss Corporation's bank account.

b. Park Bank

For an embezzlement period of twelve years, Sue wrote more than five hundred checks, totaling over $18 million from Park Bank (Anderson, 2013). At Park Bank, Julie was not authorized to sign checks. However, the often processed and ordered the checks for Sue without informing Michael. While seeking to divert the attention from the checks, the payments were made in initials like "S.F.A." For Saks Fifth Avenue and "N-M," for Neiman Marcus.

c. Sue Sachdeva

Sue Sachdeva had the authority to sign checks, and with the assistance of Julie, approve and submit wire transfers, review and approve bank reconciliations and maintain the general ledger.

d. Michael Koss

Michael Koss knew that the company's computerized accounting system was nearly thirty years old, and he declined the proposals for a new system twice. His failure to erect and maintain effective controls over the company's information system partly allowed Sue Sachdeva and Julie Mulvaney to conduct the accounting fraud and embezzlement (Anderson, 2013). Since it was impossible to lock the accounting system at the end of the month, it was easy for Sachdeva and Julie Mulvaney to trespass an internal control demanding Michael Koss to authorize changes to the monthly accounts after they were closed. Therefore, they bypassed the accounting system and forged inappropriate post-closure entries.

e. Julie Mulvaney

Julie Mulvaney helped Sue authorize and initiate check transfers of Koss Corporation funds to Sue's personal creditors totaling over $16 million without informing Michael (Anderson, 2013).


Anderson, M. (2013). Koss Corporation Corporate Governance, Internal Controls, and Ethics: What Went Wrong? IMA…… [read more]

Quality Management Improving Service Delivery Essay

… The presentation also provides a series of benchmarks that can be used for creating customized metrics of quality performance by learning program, down to the course level.

Of the three areas of ISO 9001: 2008, quality plan auditing and CAPA, the one that has the greatest potential to improve service delivery and knowledge acquisition for the MSQA program is the second. As Milton Krivokuca's presentation illustrates, quality plan auditing has the potential to be used as a framework encompasses empirically derived student academic performance, attitudinal data, and longitudinal career data over time. A quality plan audit can also be used to determine how effectively a given program is in managing the changing nature of ISO: 9001 requirements, while also staying agile enough to stays aligned with the changing nature of quality management educational requirements and standards. A quality plan audit also provides a means of measuring instructor performance relative to each student population, which is often missed in quality assessments in other approaches referentially mentioned in Milton Krivokuca's presentation. Finally a quality plan auditing approach to evaluating service delivery and knowledge acquisition can also provide greater insights into which aspects of the ISO: 9001 standards, CAPA, non-conformance, corrective action (NC/CA) and the integration of total quality management techniques that integrate quality systems with business strategy. As quality-management is a multifaceted discipline, having quality plan auditing as the foundation for improving service delivery and knowledge acquisition provides a full 360-degree feedback of factors contributing to or detracting…… [read more]

Committed to Achieving My Goal Essay

… My short-term objective is to increase my grade point average. The scope of that objective includes more in-major courses, now that some of my introductory general courses are complete. My advantage is that my math skills are much greater than my English-language verbal skills, so that accounting and math-based courses should be easier for me to do well in than the out-of-major courses I have had to take.


Currently, I am working on improving my grade point average. My current grade point average is artificially low because of the many courses I have had to take where being a non-native English speaker placed me at a disadvantage. These courses include many courses from the liberal arts perspective. However, my science and math background is extremely well-established, so that the opportunity to get into some of the mathematical theory underlying accounting is not only interesting to me, but is also an opportunity for me to improve my grades. I intend to study for three hours each evening, and will hire a tutor in any subject where my grade falls below a 92.

One of my short-term goals is to identify the American city where I would eventually like to settle. I have already identified several important factors to consider, such as: vibrancy of the city's international community, cost of living, availability of amenities, public school system rating, weather, and proximity to nature. I am using these categories, along with subjective articles about the "best" locations in the United States, to narrow my list of potential cities. I plan on visiting my top three cities over the winter break this year; to determine which one of them I like the best.

One of my long-term goals is to attain a position working at an American company. As my SWOT analysis reveals, one of the threats is that, as a non-American, a company that hires me needs to make at least a prima facie showing that there are no similarly qualified American candidates. I intend to use my bilingual status to demonstrate that I am in a unique position when compared to my American contemporaries. Furthermore, I intend to engage in formal, extra-curricular study of any accounting terms in my native Indonesian to ensure that I am well-suited to working with Indonesian clients.

Another long-term goal is to be able to purchase a home. I am living frugally as a student, but realize that I have this opportunity to save money for a down-payment for a home. I am currently looking at part-time employment opportunities that will give me the ability to begin saving money towards a down payment. I will then invest that money in high-risk stocks, with the hope of growing the money towards…… [read more]

IT Governance Research Paper

… Oversight: IT auditors help decision-makers within a company to practice oversight by evaluating whether the company is engaged in what it is supposed to do, spending money on the right purpose and adhering to laws and regulations. Oversight-based audits ensure that policies are implemented as intended and managers implement effective controls for minimizing risks. IT auditors support the IT governance structure through verifying programs' and the company's reports of programmatic and financial performance (Van, 2009). This is achieved by testing their adherence to the company's aims and rules. In addition, audits focusing on oversight contribute towards company accountability by permitting access to performance information to relevant authorities outside and within the company.

Insight: IT auditors furnish insights to help decision-makers by evaluating which policies and programs are working and abandoning those that are not working. This is achieved through benchmarking information, sharing the best practices, and looking on the company horizontally and vertically between the departments to identify opportunities while re-engineering management practices (Van, 2009). The activities in auditing help institutionalize organizational learning through the provision of progressive feedback to adjust policies. IT auditors carry out their tasks objectively and systematically while developing a detailed understanding of operations and drawing decisions based on evidence. Thus, IT audits provide a fair description of resources, problems, responsibilities, and roles. These, integrated with useful recommendations, could motivate stakeholders to rethink programs and problems.

Information technology is a currently a fundamental aspect in the success any organization. This effect is felt when qualified professionals in the auditing sector are recruited. This further ensures that the company uses up-to-date frameworks and does not lag behind in the industry. The recruitment of qualified IT auditors is a fundamental step that must be observed keenly because it affects the success of the entire process.


Moeller, R.R. (2013). Executive's guide to IT governance: Improving systems processes with service management, COBIT, and ITIL. Hoboken, N.J: Wiley.

Van, G.W. (2009). Strategies for information technology governance.…… [read more]

Informative Speech on How Auditors Can Promote Gods Values Essay

… ¶ … Speech Outline

Annette Marquez


Accounting Firm

Audience analysis:

My audience includes both male and female. They range in age from 26 to 42. They are family members who know very little about accounting and even less about auditing. They have mixed religious beliefs.

Modern professions demand too much from a person very often. The profession of the auditor is such that examines the ethical and professional standards of the organization.

Rhetorical Purpose:

To inform the audience about the profession of being an auditor.

Redemptive Purpose:

To inform my audience how an Auditor's vocation can serve as a platform for promoting the following: God's rightful authority over all things, the truth, human life as well as any other form of life on the Earth, justice and mercy, honesty and self-control, church and personal property rights, our love and true compassion to other people. As the apostle Paul proclaimed to the Colossians in his instructive word, "…whatever you do or say, do it as a representative of the Lord Jesus, giving thanks through Him to God the Father…" (3:16-17).


I. Attention-getter

Ethical and professional standards should be guided by the standards of God and his expectations of a Godly man.

II. Motive for Listening

Our life is full of miracles and new opportunities, though often we do not even notice them, and they wistfully leave our days for good. Life itself is a marvelous gift and proof of God's boundless and eternal love for every human being. It is quite simple, when I follow his guidelines, I can promote not only my own trust but also help people realize this truth. God has set out standards for the ethical treatment of others. As an auditor, I have the chance to assist companies, individuals and potentially the state and local agencies in maintaining honesty and integrity in their business processes and operations.

III. Credibility Statement

Upon the basis of the research I have participated in I believe I have an obligation to share the information I have gained on the professional auditor's role in maintaining organizational ethics and professional standards.

IV. Purpose or Thesis Statement

My speed will infrom you about the role and responsibilities of the professional auditor and as well my speech will inform you about what being an auditor means to me personally.

Preview Statement

I will inform you about the requirements of being an auditor and the role and responsibilities of a professional auditor and how a professional auditor promotes something of value to God. I want to emphasize the following crucial aspects in my speech: how to promote authentic…… [read more]

Ethics and Related Issues Essay

… When Beaudean approached Jerry Jost with a view to obtaining permission to contact predecessor firms that audited Jost Furniture International accounts, Jost expressed the issue of personality conflict and was adamant that the previous audit firms would not make fair and objective observations on Jost (Kimmel, Weygandt & Kieso, 2011). I only find some element of conflict of interest in Oloff trying to contact Miles Fraser, the attorney for Jost Furniture, with whom he had a business relationship with.

Philosophical and practical approaches to ethical decision making that could have mitigated the problems cited in the case

Oloff should not have allowed himself to take part in the assessment of Jost because by the virtue of the fact that he had business dealings with Frazer Miles, he was privy to information that could be prejudicial to Jost with respect to its dealings with Cardinal and Coyote. With regard to personality conflict issue that Jost cited, Beaudean's was to make a fair and objective assessment of the predecessor audit firm's opinion on Jost Furniture International financial position (AICPA, 1988).

Alternatives to solve the situation in the case

Professional ethics calls upon auditors to be objective and independent. It is difficult for members of professional bodies to maintain the appearance of independence. However, they must always strive to be objective.

To solve the above problems, the auditors have to discharge their duties with integrity, objectivity, and due professionalism. In case they encounter conflict of interest, they have to act with integrity.

Summary of actions I would have taken

I would, after the tabling of findings, stop any engagements with Jost Furniture International because of the concerns that had been raised by the predecessor audit firms. I would also persuade Oloff against being part of the team doing background check on Jost because of conflict of interest. I would also observe utmost independence and objectivity.

References List

AICPA. (1988). Code of Professional Conduct. Retrieved June 5, 2013 from


Kimmel, P.D., Weygandt, J.J., & Kieso, D.E. (2011). Financial Accounting, (6th Ed). New

York: Wiley.… [read more]

Dispose of Plant Assets Essay

… ¶ … dispose of plant assets?

From a qualitative standpoint, a business would first need to ascertain the useful life of the plant asset. This is particularly true for capital intensive businesses that rely heavily on fixed assets such as machinery or other manufacturing items. Using appropriate depreciation methods, businesses can provide educated guesses as to the useful life of assets. As such, they may elect to dispose of these assets when equipment with greater efficiencies is available. These efficiencies usually result in cost savings that outweigh the useful life of the older equipment. It may also be useful to dispose of plant assets when competitors are adopting new and innovative features that make the businesses plant equipment ineffective. For an example, it might be beneficial for business owners to use the internet as oppose to using phones to communicate. As such the business owner would dispose of limit the use of it physical phone equipment and replace it with internet infrastructure. This plant equipment may include routers, modems, data storage units, computers and much more. Initially these cost are heavy, however, the savings occurring through later years justifies the disposal of the older plant assets.

From a financial standpoint, it may be advantageous to dispose of plant assets when new plant assets provide a larger return. The larger return on assets may be larger than those of the older plant equipment. In this instance, it would be in the best interests of the business to adopt the new plant as the business can increase the incremental dollars the assets provide to the business. In many instances, sell the obsolete plant equipment for cash. In other instances the firm can trade it in for credit towards a more advanced system. This new system however, should be justified by either the cost savings or the increase in productivity that will ensue. Assets will also need to be disposed of when they depreciate substantially (Kaplan, 1987). There are three main forms of depreciation methods.…… [read more]

Statistical Process Control Essay

… Instead, the CAE decided to report to personnel of their choosing, which was the CFO.

What should the Audit Committee of the Board of Directors do to ensure auditor independence?

The Audit Committee of the Board of Directors should create rules to ensure auditor independence. One important rule that should go into effect immediately is term limits. After a number of years, companies would be required to hire new auditors. Knowing that work is available for a limited amount of years would force auditors to become more independent.

There is a second rule that the Audit Committee of Board of Directors should create to ensure auditor independence. The rule should state that the external auditor should provide non-audit services which in turn should be approved in writing by the CFO or the Chief Financial Officer. In addition, a third rule should be established by the Audit Committee of the Board of Directors. This rule should state the CFO or the Chief Financial Officer needs committee approval for certain non-audit services. It is imperative that the Chief Financial Officer seek written approval of the Committee before the external auditor engages in actions that would cause independence to vanish.

There are two actions that the external auditor can perform to lose independence. First, independence can be in danger if the fee for a particular engagement excels over $10,000. The second way in which independence can vanish is if the annual fees for all non-audit services exceed, or likely to exceed, 50% of the auditor's annual audit fees. However, if the 3 rules mentioned earlier were established, independence would…… [read more]

Business Plan for a Market Research Company Research Paper

… Business Plan for a Market Research Company

Business Plan for a Research and Advisory Services Firm

in the Information Technologies Industry

Business Description and Staffing Plan

The continued growth of research and advisory services in the information technologies (it) industry… [read more]

Sarabanes-Oxley Act Standard Capstone Project

… S. public company boards, management, and public accounting firms so that situations like Enron cannot be repeated (Dean, 2010). The Sarbanes-Oxley Act, requires companies to develop controls and security measures that effectively mean an employer can monitor email, web use, and phone calls. It does not deal with employee rights -- just the development of methods used to scrutinize and control abuses. In addition, the Act does not apply to privately held companies. What it does, though, is set a precedent for the idea that an employer is responsible if employees use company equipment and time to do something illegal, or use information from a company database to access customer data, private information, or other prohibited forms of communication that are private for the individual business in question (Corporate Conduct, 2002).

SOX specifically strengthens auditor independence and requires additional disclosures to all investors about services provided by independent accountants. There are requirements that more information is disclosed, that independent auditing companies be more distanced from clients, and that transparency increases. SOX insists that companies clean up their internal controls, correct issues in a timely manner, and publish important figures and results to their stakeholders. Because of SOX, in fact, research shows that corporations have improved their internal controls and financial statements, all proving to be more reliable to stakeholders. This engenders an easier time for an auditor, who now has access to more information on a timely basis (IIA Research Foundation Releases, 2005; Commission Adopts Rules, 2003).

It is clear that ethically, Enron and Arthur Anderson, among others, manipulated employees, clients, and the public. This does not mean that 401(k) programs are bad, just that the instrument was misused. Any tool can be both positive and negative, depending on the intent -- even IRAs and checking accounts. Corporate social responsibility holds that companies should not wait for regulations like Oxley, but should do the right thing prior to government regulation. With Sarbanes-Oxley, there is considerably more oversight into certain types of abuses, but we should keep in mind "401(k's) do not make a company bankrupt, bad investments do."


Commission Adopts Rules Strengthening Auditor Independence. (September 2003). U.S. Securities and Exchange Commission. Retrieved from: / news/press/2003-9.htm

Corporate Conduct. (2002, July 31). Retrieved from The New York Times:

Bryce, Robert, (2002), Pipe Dreams: Greed, Ego, and the Death of Enron, Washington, DC: Public Affairs.

Bumiller, E. (2002, July 31). Corporate Conduct: The President. Retrieved July 2010, from The New York Times: / sec50.aspx

Dean, R. (2010). ERSA, Pension Funds, and 401(k) Programs. FreeLegalAdvice.Com.

Retrieved from: / insurance_law/enron-erisa-pension-funds-401k.htm

IAA Research Foundation Releases Report on Costs vs. Benefits of SOX 404 Implementation. (April 2005). The Institute of Internal Auditors. Retrieved from: benefits&C=226&I=519

McLean, Bethany & Peter Elkind, (2003), Smartest Guys In The Room: The Amazing Rise and Scandalous Fall of Enron, Portfolio Press.… [read more]

For-Profit Organization Research Paper

… (the "Company") recently received some negative publicity because the Company made some decisions regarding GAAP, internal accounting policies and their relationship with external auditors that has now caused the company to have to restate their published financial statements going back to 2008. The core issues were " improperly deferred income that it earned but under-billed its fulfillment partners during prior reporting periods (Q3 2008 and before) by moving such income to future reporting periods (Q4 2008, Q1 2009, Q2 2009, and Q3 2009). In other words, took income that should have been reported in prior reporting periods (Q3 2008 and before) and moved it to future reporting periods (Q4 2008 and later) to materially overstate its financial performance in those later reporting periods." (Anatar, 2010) and "The Big O. also admitted that it "incorrectly amortized the expense related to restricted stock units based on the actual three-year vesting schedule rather than a three-year straight line amortization and applied an outdated forfeiture rate in calculating its expense under the plans." While they were at it, they threw a bunch of other corrections that were "[not] material either individually or in the aggregate," as the saying goes." (Newquist, 2010)

When an accounting error reaches this magnitude, it generally involves a number of top-level company officials in both the executive and accounting departments. The core responsibility of the accounting department is to provide managers and investors with information to make decisions. Management is responsible for the financial statements of a company.

The impact of the first point, which is the most material and important, is a blatant attempt of the Company to publish misleading financial statements. In effect, violated GAAO by creating an illegal cookie jar reserve to materially inflate future earnings or reduce future…… [read more]

IRS Technological Solutions Improvements Essay

… This requires updating the IRS manual detailing to whom security breaches must be reported and the nature of which breaches of security are most critical.

As well as 'beefing up' its general security, the IRS is also in an ongoing project with Lockheed Martin to streamline its procedures. In 2007, Lockheed was contracted to "automate the process to prepare, manage and store customer account notices, significantly reducing production time and enhancing taxpayer service. This system will serve as a backbone to provide timely and accurate notices to taxpayers and will allow IRS employees faster access to taxpayer accounts" (Lockheed Martin wins two contracts to help modernize IRS technology, 2007, Red Orbit). The new system also allows for the organization to more easily "create IRS publications, manuals, specialized tax products and the million of tax forms distributed to the public each year" (Lockheed Martin wins two contracts to help modernize IRS technology, 2007, Red Orbit). Through the availability of information on its website, citizens have greater access to the materials they need from the IRS and expedited tax refunds, which improves the image of the organization in the public eye. Expedited reporting also results in expedited accounting for the agency overall.

However, such enhanced public relations will be impinged upon unless the IRS also pairs it with improved security procedures, so users feel comfortable sharing their information with the IRS online. Without fully secure servers and careful investigations of all serious compromises of user security, a significant breach is a virtual 'accident waiting to happen.' Security breaches will impinge upon the overall financial mission of the IRS to ensure positive customer relationships and hassle-free tax collecting.


Lockheed Martin wins two contracts to help modernize IRS technology. (2007). Red Orbit.


Nevius, Alistair. (2012).TIGTA recommends improvements to IRS cybersecurity system.

Journal of Accountancy. Retrieved:… [read more]

Indispensable Role of the Auditor in a Free Market Economy Essay

… Role of Auditor

The role of the auditor, in its basic form, is to ensure that the statements produced by public companies accurately reflect the financial condition of the company, in accordance with the prevailing accounting principles. This role, however, is evolving, especially in light of a series of accounting scandals ten years ago and the enactment of the Sarbanes-Oxley law, which created the Public Company Accounting Oversight Board (PCAOB). The role of the auditor, therefore, is indispensable. Auditors provide a safeguard against accounting fraud, and they ensure that the information on which financial decisions are made is accurate within the confines of the law.

Free markets function properly when the market participants, especially the investors on whose money the markets rely for their existence, trust in the market. This trust is dependent on a relative absence of fraud. Financial statements for publicly traded companies are governed by a set of rules that are laid out and enforced by regulators, and this allows market participants to be certain that the statements are free from fraud and misrepresentation. The consistent format of financial statements allows market participants to easily understand the financial condition of a company. Thus, transparency is one of the most important aspects in free markets, because the more easily and accurately that information is transmitted, the more efficient the markets can be. Auditors also play a critical role in improving the transparency of financial statements, and therefore auditors in indispensable in free markets.

One of the major issues with financial statements is that if those statements contain information that is not true -- either by error or by fraud -- the statements will not convey information accurately. When market participants do not trust in the information they receive, the market will lose participants as people seek opportunities that carry less risk. Johnson (2010) notes that auditor's play an especially key role…… [read more]

Sunbeam Analysis Research Paper

… There is an additional restructuring charge of $154.9 million listed in 1996 as well, and removing this cost all but eliminates the loss that occurred in 1996, the majority of which still occurred in the fourth quarter when all of the special charges entered the picture. All of the above effects would be magnified still further if the reported charges in 1996 were removed from earnings in 1997, or were split between the two years. That is, it appears as though false losses were created in 1996 to make 1997 look better, and it would make sense that these false losses were then reported as part of earnings in 1997. If this is the case, performance in both years would be even closer in value and would be generally lower -- especially in 1997 -- than reported.

Taking the new earnings figures and adjusting for other discrepancies in the cash flow statement also leads to some significant differences in the perceived financial standing of the company in both years. While it is impossible to determine how much of the extreme difference in receivables and inventories for the two years comes down to the withholding in 1996 and the inflation of 1997's numbers, simply averaging out the values reported in both years and accounting for these differences (and the different earnings) in the net cash provided (or used ( by operating activities changes things substantially, making 1996 a much better year than reported and…… [read more]

Businesses, Transactions Take Place Essay

… ¶ … businesses, transactions take place. Transactions vary from such things as sales, expenses, wages, purchases, and receivables. These transactions are maintained in various journals and ledgers and tell the financial story of the business. The process of maintaining this financial story is called the Accounting Cycle.


There are ten steps involved in completing the accounting cycle. They are as follows: "(1) Transactions are analyzed and recorded in the journal. (2) Transactions are posted to the ledger. (3) an unadjusted trial balance is prepared. (4) Adjustment data are assembled and analyzed. (5) an optional end-of-period spreadsheet is prepared. (6) Adjusting entries are journalized and posted to the ledger. (7) an adjusted trial balance is prepared. (8) Financial statements are prepared. (9) Closing entries and journalized and posted to the leger. (10) a post-closing trial balance is prepared." (Warren, Reeve, & Duchac (2012) pg. 162)

The accounting cycle begins with analyzing and recording transactions. The bookkeeper, for example, would review the invoices, purchase orders, bank statements, etc. After the transactions have been analyzed they are now ready to be posted to the journal using the double-entry accounting system. The double-entry accounting system means that the transactions are recorded in at least two or more accounts so that the debits and credits equal.

After the transactions are recorded in the journal they are now ready to be posted to the ledger. A ledger is a book which contains the businesses individual accounts in it. Posting is simply transferring the data from the journal to the proper accounts in the ledger.

To verify all the debits and credits equal after posting, an unadjusted trial balance is prepared. This is a list of all the accounts in the ledger and their balances at any given time.

The next step in the accounting cycle would be to analyze the adjustment data. Adjustments are made to bring asset and liability accounts balances to their proper amounts and update the corresponding revenue and expense accounts.

At this point, and optional end-of-period spreadsheet may be prepared. This is used to show the effects of the adjusting entries to the unadjusted trial balance.

In the next step, the adjusting entries are recorded in the journal and then posted to the ledger.…… [read more]

Financial Analysis Compilation Report Essay

… To hold employees responsible it is important to keep track of who operated a register and when. Designating employees to certain registers and keeping logs helps to determine who was responsible and when. "For instance, managers may implement a policy of segregation of duties in the accounting department and require that separate individuals oversee accounts receivable and accounts payable transactions" (Codija, n.d.). The same thing can be implemented in the sales department.












Cost of Sales






Gross Profit












Net Profit






Opening Stock











Closing Stock






Cost of Sales






"Making a clear distinction between controllables and uncontrollables in the budget is critical to administrators" (Penner, 2004). Cost of sales could be from trends in the market that have caused purchases to be higher and could be uncontrollable, which would affect the gross profit and the net profit. Reviewing the purchases journal for discrepancies could uncover some transaction recording errors that would affect the cost of sales. If discrepancies are present in the Stock Control Journal, it would affect the cost of sales. There could be discrepancies in the ending stock count that would also throw the figures off. If the purchases were not checked in according to policy, there could have been stock shortages caused by charges when the product was not delivered. Making sure that purchases are checked when they are delivered is important to ensure that product is delivered that is charged for. Making sure that sales of stock are handled according to policy ensures that sales are recorded properly.

Performance Ratios



Working Capital



Stock Turnover

4.4 times

4.2 times

Average Accounts Receivable Turnover

22 days

16 days

Gross Profit



Net Profit



The variance analysis is important for sales revenue and sales costs (Schmidt, 2012). The working capital ratio is lower than the benchmark, which could have resulted from the cost of sales being higher. The stock turnover ratio is higher than the benchmark, which can be a result of increased sales. The average accounts receivable turnover is six days longer than the benchmark, which could be a result of timing in the transactions. The gross profit ratio is 6% lower and the net profit ratio is 2% lower than the benchmarks, resulting because of increased cost of sales. Revenues and cost of sales are difficult to predict accurately. Two alternatives exist; to adjust the budget to bring revenues and expenses closer to the budgeted figures or take action to impact the future spending and revenues to bring forecasted and actual figures closer together. Discount incentives could be given to customers if they pay their bills by a certain date to encourage bills being paid sooner. Making sure that employees are… [read more]

World Diversity Ireland and US Research Paper

… Ireland/U.S.

While the ICAEW website sheds absolutely no light about what sort of standards the Irish use in their accounting, thankfully the Chartered Accountants of Ireland do talk about this. O'Rourke (2005) notes that the Irish GAAP was in the process of being converged with IFRS at the time. Price Waterhouse Coopers notes that IFRS has now been adopted in Ireland for consolidated financial statements. Ireland in general follows UK reporting rules. For all public companies, EU standard IFRS will be adopted by 2014 and other variants of IFRS will be required for SMEs, and small companies will be allowed to use something called FRSSE, a financial reporting system for small companies. In general, the comparison between Ireland and the United States, therefore, will be between EU standard IFRS and American GAAP.

One of the differences in presentation between GAAP and IFRS is with respect to restatements or changes in accounting policy. IFRS requires that the company presents the prior three years' worth of financial statements in the event of a material restatement; GAAP does not have the same requirement (, 2011). In addition, there are differences in what line items need to be presented between the two systems, and even in the format of the statements, with IFRS inverting current and long-term assets and liabilities, for example. Another difference is that while GAAP prohibits the presentation of cash flow per share, the IFRS does not have that restriction (Ibid). There are also differences in the disclosure of risks, where GAAP has disclosure requirements that are not included in IFRS. There are also differences in the classification of refinancing of current obligations (for example if a firm expects to roll over its current debt at the end of the period); the classification of unfunded pension obligations; contractual commitments; government grants and a wide range of other areas.

With specific respect to valuation, there are significant differences between the two systems. U.S. GAAP has a number of "explicit interim disclosure requirements that are related to…… [read more]

Sarbanes-Oxley Act of 2002 Literature Review

… These firms have very few meetings of audit committees, they have very few directors who are independent, their audit committees have very few experts present, and they have CEOs who are also the Chairmen of the boards. While on the… [read more]

Independent Auditor Has Been Playing an Important Term Paper

… ¶ … independent auditor has been playing an important part in helping to ensure that a corporation's balance sheet and financial records are in compliance with different regulations. This is because there have been specific laws that allow auditors to… [read more]

Rutgers Admission the Choice of a University Admission Essay

… Rutgers Admission

The choice of a university is not only critical but vital. Making the wrong decision can have deleterious or beneficial consequences for the rest of an individual's life. University choice is not only about the course offerings of the university or it prestige. A critical consideration for me was the issue of fit. In fact the most important consideration was how I believed that the universities programs would fit and shape my life. Rutgers University provides the best congruence with my future personal goals and present needs. I have a passion for accounting and the Rutgers program along with the scholastic environment will facilitate this development.

To add greater precision to my decision making, I scoured numerous college websites and critically examined the accounting programs offered by each university. From each website the universities strengths could be determined. Some universities were strong business schools, some described technological superiority and others touted their ambient environment. While all of these elements were important, and they represent the essence of the schools ethos, the Rutgers accounting program is a multilayered program that incorporates not only key accounting courses but also a research element. Rutgers fuses their accounting degree, with a robust research environment. The result is an excellent program that provides diversity and completeness to the student.

I am not conscious as to the genesis of my love for accounting. I however am aware that I was always interested in understanding the financial dimensions…… [read more]

Betty Vinson Was Horribly Unjust Essay

… When recent attempts to improve legal compliance and to avoid future problems are critical, one remains doubtful that any such system could serve in the function of a fool-proof mechanism to prevent the happening of future frauds. These reforms have largely ignored protecting the whistle blower. After all, besides not addressing the base issues that bring the frauds about, there is also no protection of those whose testimonies like Ms Vinson who brought the mighty down low and offered them up to federal prosecutors. While there are laws to protect whistle blowers, the reality of what would happen to her gave Ms Vinson pause about doing the right thing, that is the fear that she would never work as an accountant again.


Certainly, if this author was in the place of an employer, they would hire Ms Vinson on the spot. If employers do not hire and protect them, then they will not come forward and do the right thing to help clean up the system when a violation happens. Despite the federal laws and regulations, unless employers step in and reward the right behavior, then these people will not come forward in order to keep the system clean. This is certainly the reason why there were major corporate scandals in 2008, only six years after the WorldCom scandal. To restore faith to the system, the whistle blower will not only need to be protected, but further rewarded or they will not do the right thing at all.


McClam, E. (2005, August 5). Ex-worldcom exec vinson gets prison, house arrest. Retrieved from… [read more]

US Adoption of IFRS Article Review

… U.S. Adoption of IFRS

The formation of a single set of high quality global accounting ideals is a matter of increasing position as the contributors in the ever gradually assimilated world capital markets mandate comparability and clearness of financial reporting… [read more]

Internal Control Weaknesses That Existed Case Study

… I would then implement an updated proactive approach that has all the proper components necessary for the monitoring of the internal controls that would help in the prevention, deterrence as well as detection of fraud as opposed to relying on a reactive one that only comes into action when the fraud has already occurred and the damage already done.

3.A Critique the ethical nature of Pavlo's actions the case

I am in complete disagreement with Pavlo's comments about the environment as the motivator for committed fraud as well as the circumstances that made him to engage in fraudulent activities. Since he was part of the top management, he had the full trust of the shareholders and stakeholders at large. He also had the full confidence of the other employees as well as executives. He however new very well that what he was doing was entirely wrong and were in direct contravention of the accounting regulations, principles and ethics. Pavlo should therefore stop telling fabricated stories to make his career as at fraud advisor prosper. This is because it is unethical to gain from lies.

4. Apply one theory that is related to crime causation to the case

The theory that best applies to the Pavlo case is that of "Perceived Opportunity" (Kranacher, Riley and Wells,2011).This is because the weak internal controls that existed in MCI gave Pavlo the opportunity and motivation to engage in fraudulent activities through the account receivable system. He saw the opportunity that existed and then used his knowledge on the account receivable process as well as the poor controls of the system to manipulate in a manner that never affected the reported earnings. This communicated a good but false financial position of the company which helped in creating shareholder and stakeholder confidence in the company stocks.

He used the existing opportunity to his advantage by seizing the moment and then using it to commit accounting fraud. The theory of Perceive Opportunity operates on the principle that crime is a function of opportunity. If an opportunity exists, then there is an attraction or temptation to engage in a criminal activity. If the opportunity is eliminated, then the crime is also eliminated altogether because the chances for being tempted are also eliminated. It is therefore important for firms to provide effective monitoring of the company's operations and financial movements by auditors with the installation of proactive fraud detection systems. Good corporate governance and ethical accounting must also be encouraged.


Carpenter, T., Durtschi.,C and Gaynor., LM (2002).The Role of Experience in Professional Skepticism, Knowledge Acquisition, and Fraud Detection

Fullerton, Rosemary and Durtschi, Cindy (2004).The Effect of Professional Skepticism on the Fraud Detection Skills of Internal Auditors (11 November 2004)., . Available at SSRN: or doi:10.2139/ssrn.617062

Kranacher, M.,Riley, R., Wells, JT., (2011).Forensic Accounting and Fraud Examination, 1st Edition.Association of Certified Fraud Examiners .

Lyon, TL & Tocco, AL (2007).And the Fraud Continues. The Society of Case Research… [read more]

Career Goal I Have Always Enjoyed Numbers Essay

… Career Goal

I have always enjoyed numbers, even as a little girl. All my friends always came to me to get advice about their Mathematics homework and, in later years, their accounting papers. For me, numbers are a type of art; they speak to me. For this reason, I entered college with the aim of majoring in accounting. I have achieved this goal and am looking forward to also achieving my goal in terms of getting my CPA license and starting my own accounting business. Of course, this path will not be an easy one and there will be challenges to face along the way. I do, however, believe that if I keep my eye on my goal and work towards it, even with obstacles in my way, I will be able to achieve my goal and make a better life for my family and myself.

One of the challenges I will face along the way is employment. I currently have a part-time job as a junior accountant at a bookstore. I took this work in order to help me pay form my tuition. Although my father does help with my expenses, he cannot cover all the costs of my studies and accommodation. There are also textbooks and transport to think about, in addition to my daily needs such as food and my monthly expenses such as rent. While it helps greatly to have a part-time job, this is challenging to my energy levels and my ability to put time into my studies.

On the other hand, having these responsibilities throughout my college career is teaching me valuable lessons about time management and responsibility. I am able to prioritize my work and social life in such a way that I can, mostly, find enough time for my studies and assignments as well. Some days are more difficult than others, but this in itself is helping me to cope with the many challenges I will face on the way to my ultimate goal.

One way to overcome these challenges is to have a specific plan in place. My first goal is then to finish my college degree with as high an achievement as possible. While I do this, I will also do all I can to learn as much as I can from my…… [read more]

Cases in Corporate Governance Case Study

… ¶ … Corporate Governance


What occurred in Shell case?

In what became known as the Royal Dutch case, Shell, in 2004, overstated its oil reserves. This resulted in a loss of confidence in the group, a $17 million fine… [read more]

Corporate Governance of Finances Case Study

… corporate governance fiasco.

It is the incentives to act in accordance with principles of good government that are at the heart of issues with independent directors. The company had a majority independent Board of Directors and the obvious question arises as to how things could go so badly in this type of regulatory environment (Kumar, Paul, and Sapkota 2011 3). Despite this, Indian companies, information in Indian companies is closely held. Therefore, the companies seem to lack the proper disclosure and other governance requirements that might seem to be normal to Western eyes. With no clear understanding of their role, it is no wonder that they would fail in a regulatory role (ibid. 4).

So, this raises the question of why the auditors did not deal with the financial problems. The auditors were paid by the same managers who may have been responsible for misreporting. This failure of corporate governance led to the fraud (ibid. 7). Logically, this author would suggest that the independent directors should not be held responsible for a hole in the system and for unclear duties.

3) Comment on shareholder activism as the way forward for corporate governance as opposed to the introduction of numerous governance rules.

As pointed out in Capricio and Levine, laws enforcing shareholder rights that are on the books in many countries are frequently not enforced, providing us with a negative picture of the potential success of shareholder activism to improve corporate governance (Caprio Levine 2002 5). In the Kumar, Paul and Sapkota article, we find that the independent directors were to function as "watchful monitors of promoters and management on behalf of shareholders,..." (Kumar, Paul and Sapkota 2011 5). Auditors also had the responsibility to look out for and function as the sensory organs for the shareholders (ibid. 5). To complicate things further, the auditors have no contractual obligation to look out for the shareholders since the audit contract is with the company and not with the shareholders (ibid. 7). It is obvious that these shareholder's rights need to be strengthened in a regime that would enable the activism of the shareholders in constructing that system in an atmosphere of audit transparency (ibid. 8). Shareholder rights need to be strengthened to realize the success of their activism. Such rights have to become an integral part of any contract.

Historical Analysis and Conclusion

In a modern, globalised economy, there is an increased need for transparency in accounting and the strengthening of shareholder rights. It is imperative that these two functions be strengthened for self-regulating corporate governance to work. This type of action increases the trust that is so much a part of investment in corporate organisations.


Caprio Jr., J. And Levine, R. (2002). Corporate Governance in Finance: Concepts and Inernational Observations. World Bank, IMF, and Brookings Institution Conference, Building the Pillars of Financial Sector Governance: The Roles of Public and Private Sectors.. pp. 1-44. Available:

Kumar, G, Paul, P, and Sapkota P. (2011). The Largest Corporate Fraud in India: Satyam… [read more]

Financial and Management Accounting Essay

… Tesco Financial Statements

Financial statements like the ones Tesco publishes in its annual report are provided by companies to the public and to regulators by law. There are four main financial statements, and each one serves a unique purpose. Understanding how to read financial statements will allow anybody to understand a firm's financial position. The Securities and Exchange Commission (SEC) in the U.S. has published a guide to reading financial statements that outlines some of the basics.

There are three main financial statements produced by Tesco: the group income statement, the group balance sheet and the group cash flow statement. These three statements discuss the company's revenue and earnings, its assets and liabilities and the organization's cash position.

For publicly traded companies -- companies traded on stock exchanges -- the financial statements must meet a certain format. In the UK, this format is governed by the Generally Accepted Accounting Principles (GAAP), although there is a transition underway to move towards the International Financial Reporting Standards in use already in over 100 countries (Grant Thornton, 2011). The use of accounting standards means that financial statements for public companies are produced according to the same rules. This allows investors, creditors and other stakeholders to be able to analyze the statements both in context of the firm's past statements but also against other firms as well. This consistency allows for better information to investors, which in turn encourages more robust capital markets.

Internal stakeholders like customers and staff have less use for the financial statements, but there are instances where they can be affected by financial statements. For example, they can gauge the direction o the company, and the financial statements play a role in building transparency so as to avoid accounting scandals. Some staff may receive stock options as part of their pay packet, or may have company stock in their retirement portfolios. In such situations, the financial statements are valuable, as are the financial summaries that the company publishes on its website. The information in the financial statements can help explain the stock price, something that is important for all stakeholders.

Investors need the statements in order to make good investment decisions. In order to make these decisions, they need information about the firm regarding its liquidity, gearing, margins and other aspects of the firm's finances. For the investor, a rigorous breakdown of the financial statements is required, because investors are often seeking companies with strong operating performance in order to make good investment decisions. This can be contrasted, however, with the efficient market hypothesis that states all publicly available information has already been incorporated into stock prices (Investopedia, 2011). If this is true, then investors may not find the financial statements to be as useful, as they are just historical records documenting past performance.

Tesco's financial statements are produced according to GAAP. This means that these statements are useful to investors and other stakeholders. The financial statements are reliable, with the information used to produce those statements consistent with past… [read more]

Project Management A) Lessons Learned Sessions Essay

… Project Management

a) Lessons learned sessions or conducting project-post mortems are essential for the success of future projects, because of two primary reasons: on one hand, they can allow the developing team to identify what went well with a project, and thus retain these elements for future phases of development or for other projects. At the same time, these help in determining what did not go well with a project, and creating the basis to correct this in the future (Hackett, 2007).

At the same time, the project post mortems are important because they create a "calm period of reflection" (Wolf, 2010) after the project is completed, something that the team has not benefited from during the developing phases of the project. This reflexive period is essential to creating the set of lessons learned that can be used in the future.

Finally, the post-mortem is also important from a financial point-of-view (Pastore, 2003). In some large organizations, this is a full audit of the way money was spent during the developing phases. At the same time, any organization or even smaller team should use the project-post mortem to analyze how efficiently the money was spent and how this efficiency can be improved in the future. Ideally, this can be extended to the productivity of the workforce as well or to ways that the expenses can be trimmed down.

b) One of the important thing about the lessons learned is that this is a worthwhile investment (Lee, 2008). With that in mind, it is essential that the project post mortem process is not one that is done for the sake of it being done, but rather that it takes meaning, that it gathers the necessary historical facts that will influence and impact the future development of the organization and the future projects that the company will commit to.

At the same time, one should always remember and take into consideration the fact that the lessons learned process is not a "holy grail of knowledge" (Lee, 2008) -- some of the experience may be useful in future projects, while parts of this knowledge may have no immediate effect in the short and medium term. The useful thing is for this knowledge to remain in the institutional mindset for potential use.


1. Lee, Melvyn. 2008. Making Lessons Learned a Worthwhile Investment. PM World Today. Vol. X, Issue VII

2. Pastore, Michael. 2003. Post-Mortems Key To Successful Projects. CIO Update. On the Internet at Last retrieved on September 29, 2011

3. Hackett, Michael. 2007. Conducting Effective Post-Mortem Meetings. On the Internet at Last retrieved on September 29, 2011

4. Wolf, Leslie. 2010. The Project Post-Mortem: A Valuable Tool for Continuous Improvement. On the Internet at Last retrieved on September 29, 2011

Part 2

a) Primarily, project audits are conducted because they provide an opportunity to analyze and evaluate the different phases of the project, with the particular challenges and issues that each of the phases proposed for the individuals working… [read more]

Reporting of Capital and Operating Term Paper

… . .and on distinguishing a lease from a service contract" ("Leases" 6).

While standards bodies are working toward convergence for many lease accounting standards, differences currently remain between International Financial Reporting Standards (IFRS) and U.S. GAAP. Some of the major differences include the following:

Under U.S. GAAP, third party guarantees cannot be included in minimum lease payments to determine whether capital lease criteria are met; under IFRS, third party lease payments must be included.

Under U.S. GAAP, output contracts are leases; under IFRS they are not.

Under U.S. GAAP, lease obligations disclosures are more extensive than under IFRS.

Under U.S. GAAP, leasehold interest in land is accounted for as a prepayment; under IFRS, leasehold interest in land can be accounted for as investment property, valued at fair value with changes in current earnings, or else as a prepayment (Epstein 2011).

In summary, lease accounting standards have been and continue to be evolving to address the concerns associated with earlier standards and guidelines.

Works Cited

Epstein, Barry J. "Accounting for Leases IFRS vs. GAAP. " IFRS Accounting. 2011. 16 September 2011. .

"History of Lease Accounting (Agenda Paper 2)." Joint International Working Group on Leasing. International Accounting Standards Board and Financial Accounting…… [read more]

IASB and FASB Joint Conceptual Framework Essay

… IASB and FASB Joint Conceptual Framework

How have the IASB and FASB sought to eliminate the differences in IASB and FASB accounting standards?

The way that both organizations have been seeking to eliminate these differences is by: creating a universal standard. This is because globalization has been highlighting how the financial accounting methods that are being utilized in various countries, can often lead to confusion. The reason why, is because there is no single standard that everyone is using, to make an accurate assessments about the current financial state of a business. This has lead directly to: problems in understanding the risks and the rewards of a possible investment. At the same time, this helped to encourage a lack of transparency and accountability. This is because many organizations were forced to use different accounting standards for the counties where they have operations. This made it more difficult for investors and auditors to discover irregularities. (McCarthy 2003)

As a result, both organizations have been working together since 2001, to create national standards that can be utilized around the globe. This is significant, because it shows how this has been the main focus in: addressing the differences between the two standards. As this is creating universal practices (that are accepted by both organizations) which will: improve transparency and accountability. Once this takes place, it means that they will be able to eliminate the difference between the two sides by: creating a principal that will be embraced around the globe. (McCarthy 2003)

Explain the progress to date on the development of the IASB / FASB joint conceptual framework with specific reference to the following areas: (a) reporting entity; and (b) objectives and qualitative characteristics

The overall progress of the development of these standards has occurred in three different phases to include: elements / recognition, measurement and the reporting entity. The elements / recognition phase is when there are a number of different standards that are being proposed to include: clarifying the definitions of…… [read more]

Balance Sheet Items Off Research Paper

… Synthetic leases describe a means of off-balance sheet financing. If a company wants to purchase an asset such as an office building, but does not want the debt to appear on its balance sheet, it can avoid the liability by… [read more]

Impact of the Sarbanes Oxley Act on Corporate Financial Reporting Research Paper


The Sarbanes-Oxley Act (SOX) was enacted in 2002 as an investor protection act in the wake of a number of different financial scandals, each of a slightly different type. Public confidence in both financial reporting and in auditing brought about the changes, which were designed to restore public confidence in the accuracy of financial statements and by extension in the entire capital market system. There are eleven sections to SOX, so the impacts on corporate financial reporting are wide-ranging.

SOX establishes rules and regulations for financial reporting, including responsibility for financial statements, transparency in reporting and disclosures, the auditing process and other areas. The legislation is widely believed to strengthen corporate accounting controls. However, there are drawbacks to SOX, many of them related to the cost of implementing the act and the perceived lack of benefit for those costs.

A core element of Sarbanes-Oxley is the concept of responsibility. The CFO and CEO are directly responsible for the financial statements and under SOX need to sign off their personal approval of the statements. They can face legal consequences if the statements are later proven to be fraudulent or otherwise materially false. The auditors as well are held to a higher standard of responsibility than was previously the case. This increased personal responsibility for financial statements was intended to improve the quality of those statements by providing a specific incentive to executives and auditors to ensure that the statements are accurate. While there is some debate as to whether or not this has come to pass, it is evident that the level of responsibility for financial statements has increased as a result of the passage of SOX.

Embedded in the legislation is the creation of a new body charged with SOX oversight, the Public Company Accounting Oversight Board (PCAOB). This board replaces a system of industry self-regulation and is financed by companies registered with the SEC. The PCAOB has more enforcement mechanisms within its arsenal than previous self-regulatory bodies had, in part because of its connection with the Securities and Exchange Commission. The PCAOB's function heightens the pressure on the executives and auditors to ensure that statements are prepared more effectively. For accountants working within public traded companies, the role has become imbued with much more pressure as the result of SOX, as the stakes for many stakeholders have been effectively raised.

Internal controls have essentially been heightened by SOX. Companies, fearful of the consequences of malfeasance, are now oriented towards ensuring that transactions are recorded properly and that there is oversight of the financial reporting process at all levels. In addition to increased pressure on accounting departments, this has increased the costs associated with the preparation of financial statements and created more…… [read more]

Applying Linux Commands to Make Believe Company Application Essay

… Linux Commands for 'Outdoor Adventures'

The Linux directory structure for the 'Outdoor Adventures' here consists of a main directory divided into relevant subdirectories.

Company Main Directory -- OutdoorAdventures

Subdirectory -- Accountant (stores information about a new accountant)

Subdirectories inside 'Accountant'

ProgramFiles (the program files for the accounting system)

DataFiles (Data files for accounts receivable, accounts payable and general ledger)

BusinessReports (Information about any Business Reports generated)

RichTextFiles (Information included in Rich Text Files)

These were created in the Command Line using the 'mkdir'

The 'ls' command shows all the directories present/created.

The directories as seen from the Graphical User Interface (GUI) is shown below

Permissions for files/directories can be assigned using the GUI as well.

The main directory 'OutdoorAdventures' has been granted access only by the company owner (current Ubuntu live session user) and the accountant (who is a part of the group).

Right Clicking on the directory, selecting 'properties' followed by 'permissions' brings us to the main screen to choose the level of access. Drop down menus can be seen for 'folder access' and 'file access' against all 3 -- owner, group and other. 'Other' implies any third party user who is not supposed to get any access rights to the company files.

The 'owner' is assigned 'create and delete files' permission for folder access and 'read and write' permission for file access. The same permissions are granted for the 'group' (Accountant). External users ('Others') are assigned 'none' for both cases. This can be seen below:

Additional subdirectories can be created using the 'mkdir'. The subdirectory 'Customers' has been created inside 'OutdoorAdventures' by going inside it first (using 'cd OutdoorAdventures' which changes the current working directory to what is specified).

This is followed by 'mkdir Customers' which creates the subdirectory inside it.

Permissions to any new subdirectories created can be similarly assigned using the GUI as before.

Owner (Company Owner) -- Create and delete…… [read more]

Fraud, IT's Better to Be Safe Article Review

… ¶ … Fraud, it's Better to Be Safe than Sorry, it is shown how there is an ever rising presence of fraud in companies. This type of fraud is almost always detected eventually, but it is not always easy to do. This article represents why there is a growing need for fraud examination and why fraud examination classes are important. Experts tend to agree that fraud in business and government is endemic and the CPA's role in combating fraud has augmented because of corporate indignities and the ensuing media awareness. It is probable, even likely, that in any large corporation, but especially one with widely dispersed operations someone somewhere will attempt to improve upon actual performance through bookkeeping manipulation. In each of the three situations discussed above, employees at the subsidiary level altered the subsidiary records to improve performance.

This article showed how it is virtually impossible to scrub away the damage to a company's reputation. In the litigious climate in which business is conducted today, a failure to find, correct, reveal promptly, and be completely transparent in the procedure can lead to years of litigation, important expenditure of resources, and worse. Even if some of those consequences are avoided, personal information about malfeasance, obtainable through the Internet, has a half-life long enough to end a career. It is frequently thought that it is better to be safe than sorry (Weinstein, 2010). Because of the growing amount of fraud that appears to be occurring more and more frequently it is important for there to be fraud investigators.

Popular belief shows that not all corporate accounting frauds start at the top. This article looked at three stories of corporate accounting indiscretions all of which started at the bottom. This article set forth the facts concerning the violations of procedures, detection of errors, and appropriate or inappropriate follow-up and corrective actions. In the first case that…… [read more]

Office, There Has Been a Problem Essay

… ¶ … office, there has been a problem with employees visiting sites that they are not authorized to. For basic firm research, the three following periodicals in print have been essential in the history of the firm. The management decision to get these tools in print form will keep the firms partners on track with their work and unoccupied with unnecessary subjects that are a liability in any case (Shymkus, 2010). In some cases, they are actually less expensive than the online versions and will therefore save the firm from the above problem, but also money on subscriptions.

The Journal of Accountancy is the monthly flagship publication of the AICPA with basic breaking news in the field of accountancy. Since the firm is a member of AICPA, we can get the monthly publication for $60 per year ("Aicpa store," 2011). The publication will provide us tells at a glance what is been happening in the accounting profession, the SEC, PCAOB, IRS, and in business and the economy. The journal concisely and very much to the point has articles covering in a number of departments that interest the firm in its work including IFRS convergence, FASB Accounting Standards Codification, the Stimulus Act, practice management, general business and industry issues, technical issues dealing with the accounting field and tax issues that concern the firms work. In particular, IFRS convergence and FASB Accounting Standards Codification are extremely valuable and keeps the firm in line with financial reporting standardsIn the present environment, mastery of reporting standards provides a needed air of transparency that adds favorably to the public perception of the firm. Advertisements in the journal are few and of a foundational nature.

Bloomberg Businessweek for basic overall business research is published on a weekly basis. The cost is $20 for a 26-week subscription. The publication has several basic business departments that serve the firms interests in a number of general areas…… [read more]

Health South Was Under Pressure to Meet Case Study

… Health South was under pressure to meet certain revenue goals to satisfy investor expectations. In retrospect, its actions to show that it was doing so exhibited clear 'accounting red flags.' One of its fraudulent methods was understating its reserves for receivables. An inventory reserve should be deducted from a company's earnings, as its purpose is to pay for future anticipated costs regarding current inventory, such as shipping costs, storage costs, labor-related costs in terms of tending to the inventory, etcetera (What are the generally accepted accounting principles for inventory reserves, 2010, Investopedia). HealthSouth listed such funds as profits. This is not consistent with GAAP (generally accepted accounting practices).

Another HealthSouth 'trick' to inflate its income that was its method of capitalizing expenses. Capitalizing expenses is not inherently against GAAP: it is a common practice of delaying or spreading out the recorded expense of new equipment or other materials over time. Such equipment is supposed to 'give back' to the company in value, defraying the initial outlay cost. Because of the long-term value accrued, companies record the cost of the investment over a specified period of time. However, capitalizing regular operating expenses like HealthSouth is a blatant violation of GAAP, as such expenses are merely drains upon revenue, and do not 'give back' anything to the company in terms of enhanced value over the long-term (Capitalize definition, 2010, Investopedia).

Extending the useful life of equipment was another trick used by HealthSouth. Although depreciation costs reduce a company's tax burden, HealthSouth overstated the useful life of its equipment in the interests of boosting short-term revenue. For tax purposes, and to enhance accurate reporting to shareholders, companies must deduct the costs of the depreciation of company assets, given that these assets may mean that the company is less productive because of necessary repair costs, wear and tear to equipment, and technological obsolesce (Kelley 2010). HealthSouth did not do this.

Q2. The reasons that few people came forward at HealthSouth to reveal its fraud often came down to simple self-interest: although earnings seemed too good to be true, no one…… [read more]

Sarbanes Oxley Act Book Report

… SOX Compliance

How the Sarbanes-Oxley Act Relates to Internal Controls

The impacts of the Sarbanes-Oxley Act (SOX) of 2002 on the internal controls of businesses that are publically traded on U.S.-based stock exchanges continue to be costly, significant and strategic in their impact. Most significant have been the requirement of supporting real-time reporting to the Securities and Exchange Commission (SEC) through the use of the evolving XBRL data integration standard and the supporting processes and systems re-engineering needed to accomplish this (Devonish-Mills, 2007). At a more fundamental level, SOX has completely redefined the underlying accounting and finance systems of companies, often requiring entirely new system integration, process re-definition and reporting processes and reviews to be in place (Hemani, 2005). Market research firm Gartner Inc. said that the cost of compliance for a typical Fortune 1,000 company is nearly $16 M. To redesign and implement new systems and processes to bring them into compliance with SOX regulations and requirements (Bedard, Graham, Hoitash, Hoitash, 2007). Clearly the impact on internal controls is very significant, as nearly every company who makes this sizable of an investment is auditing its own compliance rather than just leaving it up to the SEC to audit and potentially impose fees as well (Bedard, Graham, Hoitash, Hoitash, 2007).

Internal Control Impacts of SOX

Beginning with the accounting and finance systems and progressing through Information Technologies (it) and the need for XBRL reporting (Devonish-Mills, 2007), to the auditing of the to the supply chain transactions of the company (Hemani, 2005) SOX is reorienting and redefining transaction and process workflows very significantly.

Companies who are coping with these significant changes to their accounting, it, purchasing and supply chain processes are adopting Governance, Risk and Compliance (GRC) initiatives…… [read more]

1985 Enron Was Born of a Merger Term Paper

… ¶ … 1985 Enron was born of a merger between Houston Natural Gas and Internorth, a Nebraska pipeline company. During the merger Enron subsequently incurred a large amount of debt in addition to losing exclusive rights to the use of… [read more]

NOTE:  We can write a brand new paper on your exact topic!  More info.