...for-profit organizations, non-profit organizations, government, and the economy. With many standards, rules, procedures, and regulations placed on auditing financial reports for organizations, one would obtain an understanding as to the Generally Accepted Auditing Standards (GAAS). These GAAS were collaborated by members of the American Institue of Certified Public Accounting (AICPA) in the 1940's. In the 1940's, three guidelines to include General Standards, Standards of field work, and Standards of reporting. Each of these topics includes details as to the "flow" of the auditing process. After the Sarbanes-Oxley Act of 2002, (SOX), the regulations were increased with detail, and offered more insight as to the consequences of not following the "rules". The Public Company Accounting Oversight Board, (PCAOB), obtained more duties to assist in reviewing material relevant to auditing and auditors. One of the points one may find interesting is the importance of the regulations lack of required documentation. Rather than placing detailed requirements on included reports it lays a framework of guidelines of which to include, and what material needs to be disclosed. The main purpose for the regulations is to promote full disclosure and transparency, a common element which was missing prior. Commonly, many find the regulations to apply to for-profit and publicly traded organizations, however; many are inclusive for other organizations too. Island Ceremonies, is a non-profit outreach...
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...FINANCIAL MANAGEMENT GUIDE FOR NON-PROFIT ORGANIZATIONS NATIONAL ENDOWMENT FOR THE ARTS OFFICE OF INSPECTOR GENERAL SEPTEMBER 2008 Questions about this guide may be directed to the National Endowment for the Arts, Office of Inspector General, Room 601, 1100 Pennsylvania Avenue, NW, Washington, DC 20506, Telephone (202) 682-5402. Questions about the terms and conditions of grants and cooperative agreements may be directed to the Office of Grants and Contracts, Room 618, Telephone (202) 6825403. Table of Contents Page Use of the Guide .................................................................................................................................... 1 Accountability Requirements ................................................................................................................ 1 Financial Management Standards ............................................................................................. 1 Internal Control Standards ........................................................................................................ 2 Audit Standards ......................................................................................................................... 3 Reporting Standards .................................................................................................................. 4 Subgranting .............................................................................................................................
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...Accounting and Audit Enforcement ACC 599 – Graduate Accounting Capstone QUESTION #1 After so many scandals in regards to financial frauds, Sarbanes-Oxley Act Section 404 mandates that all publicly-traded companies must establish internal controls and procedures for financial reporting and must document, test and maintain those controls and procedures to ensure their effectiveness. Non-for-profit healthcare organizations do not hold themselves to the same standards as the for-profit organizations. Although whether SOX guidelines apply to businesses in the healthcare industry depends on whether the business is a for-profit or non-for-profit organization, some voluntarily adopt SOX in an effort to strengthen internal management controls and increase the quality of healthcare financial reporting (Lohrey, n.d., ¶1). Non-for-profit organizations could certainly benefit from the SOX Section 404 to help reduce the possibilities of corporate fraud by increasing the stringency of procedures and requirements for financial reporting. Many health care executives and board members have concluded that SOX created a new benchmark for best practices, as well as provided extra protection from liability by evidencing direct board attention and oversight of organization compliance (Kusserow, 2013, ¶1). Without audit committees, non-for-profit organizations are at higher risk of financial disaster. Following the SOX compliances can be very beneficial for the non-for-profit healthcare businesses...
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...can be gained by a nonprofit organization to voluntary comply with Sarbanes-Oxley one can make the case that by not doing so the nonprofit is putting themselves at a disadvantage. Nonprofit organization that do not hold themselves to the same standard as their for-profit peers run the risk being perceived as having something to hide and possibly lose the trust of their communities. Nonprofits, by using an independent and competent audit committees, would be able to have assurance that all policies and procedures that are entailed in a financial audit are being covered. This is one of the components that a nonprofit would be wise to adopt. While most non-profits have financial committees that could complete...
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...From Coca-Cola's point of view, what are the CSR-related issues? Please, be specific about the issues and the stakeholders Infringement of labor rights Throughout this case, the message that was constantly portrayed to the public is the fact that The Coca Cola company simply do not value their workers. Firstly, the accusation of murder does no good to the company’s reputation and secondly, the company made no attempts to seek additional alternatives to prove their innocence. The law suit is extremely significant to the Colombians, for it sets a standard and position of the unions in their country. As quoted from cokefacts.org "If we lose this fight against Coke, First we will lose our union, Next we will lose our jobs, And then we will all lose our lives!" (SINALTRAINAL Vice President Juan Carlos Galvis) The case shines a negative light on Coca Cola in the eyes of Colombian citizens as it shows that the company does not favor unions. This could cause rather serious consequences, such as a decrease in demand, adverse attitude from current employees and serious reconsideration from future work applicants. How a company treats its employees reflect a great deal on the corporate culture, and the fact that Coca Cola was accused to have utilized crude, ruthless external forces in attempt to crush a union puts them in a bad position. Furthermore, the company failed to remedy the situation besides constantly denying the accusations. Although the court dismissed the case because...
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...Non-For-Profit Fraud Authors’ Note This paper was prepared for Advanced Accounting, Summer 2013. OUTLINE 1. Introduction 2. The Reasons of Fraud in Nonprofits. 3. Types of Nonprofit Fraud. 4. Recent Fraud Cases: A. $1,000,000 Charity Scam by John Cody. B. ASPCA International and $27,000,000 Fraud. C. Fraud Committed by Anita Collins, Church Bookkeeper. D. Fraud Committed by Hugh Blackburn. 5. Fraud Prevention in Nonprofit Organizations. 6. Conclusion. Introduction. Most of us are familiar with the organization ASPCA (American Society for Prevention of Cruelty to Animals) and some of us even donate or consider donating money or time. But not many of us know that only 5 cents of every dollar collected by ASPCA goes actually towards the organization’s primary goal, which is helping animals. Just a few months ago a disaster hit NYC and the areas around. It is hard to believe but it gave great opportunity for fraud. Consider the case of the couple John Sandberg and Christina Terrassino, who launched a charity website, The Hurricane Sandy Relief Foundation. According to DCA (Division of Consumer Affairs), they have solicited more than $600,000 from about 2,000 donors. However, less than 1 percent of the money was given to the victims of the hurricane (Rose, 2013). Beside, consider the case of Anita Collins, a 67-year old church bookkeeper. She is known for stealing approximately $1,000,000 from the church she worked in (Huffington...
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...maximizing agents * Individuals falling into different groups will ideally have different information and thus the more informed individuals will make a profit at the expense of the others * Another critical assumption made by agency theory is that for the owners to believe the report prepared by the managers of the business, they will demand to have this report verified by a third independent party. * Agency theory goes on to suggest that the appointment of professional external auditors is the most preferred cost effective way of monitoring the agents. * Under strict agency theory, financial reports are thus regarded as reports to owners of the business who are the principals and the external auditor is seen to act for and on behalf of the owners. DEFINITION OF AUDIT STATEMENT OF AUDITING STANDARDS-GLOSSARY OF TERMS issued by the Auditing Practices Board defines an Audit as; “ An exercise whose objective is to enable auditors to express an opinion whether the financial statements give a true and fair view of the entity`s affairs at the end of a period and its profit or loss for the period then ended and have been properly prepared in accordance with the applicable reporting framework” PARTIES TO THE AUDIT PROCES The American Accounting Association suggests that there are four parties to the accountability/audit process; The Preparer/Source- This refers to those individuals who have control of the resources that have been provided by other parties and have the...
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...Board: How are board members selected? Has specific criteria been established for selecting new board members? This is an important question to add to the audit because there should be a set list of criteria of what the board and the director are looking for when looking for new members. This way only the right people get the right job. Staff: How are staff members held accountable for their actions? Are there clear procedures for disciplinary action? This is an important additional audit question because all employees should be treated equally including when dealing with performance and disciplinary issues in the workplace. Clear policies would help guide managers in discipline to attempt to avoid favoritism, retaliation, or other unfair practices. This would ensure consistency. Donors and Fundraisers: If fundraising for a non-profit, are donors provided with the proper paperwork for claiming charitable deductions on their taxes? This is an important question to put on the audit if working with a non-profit organization. There should be consistent paperwork provided to donors for tax filing purposes. Clients/Customers: What is the policy on files of former clients? How long are files kept and are they properly destroyed? This is an important question to add because most of the questions are concerning current clients. There is a question about the confidentiality of clients but I do not think it covers or is clear enough about dealing with the confidentiality...
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...and principle-based accounting and the uses. In addition, there are discussion about auditor should allowed to provide non-audit services. There are also critical discussion on the reason audit partners struggle with making tough accounting decisions and a good recommendation of changes to be made. 1.0 Background of Enron Corporation and Arthur Anderson and fall Of Enron. 1.1 Background of Enron Corporation Enron was established in the middle of a recession in 1985, when Kenneth Lay CEO of Houston Natural Gas Company (HNG), persuaded a joining among Inter North Incorporate (Peterson). There was a young consultant named Jeffrey Skilling who had a background in banking organization (Peterson). He planned an innovative solution for Enron profit in the natural gas business (Sridharan, Dickes, & Caines). For instance, Enron buy natural gas from suppliers and sell to customers with the higher price (Sridharan, Dickes, & Caines). It is because the demand of natural gas increased (Peterson). Kenneth Lay was very impressed with Skilling’s new solution in 1990 and employed Skilling to handle the Enron Finance Corporation (Sridharan, Dickes, & Caines). He makes the Enron Finance Corporation become success in increasing customer rather than competitors (Sridharan, Dickes, & Caines). With power of market, Enron can make future company with better profits (Peterson). 1.2 Background of Arthur Anderson Arthur Anderson started his own business at...
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...Audit Problems ACC 623 Test 1 Review I) Intro to Auditing a. The Need for High quality Information: i. Financial information is relied upon by investors to make their investment decisions, creditors to make lending decisions, and by other parties that include vendors, customers, and potential merger or acquisition partners. It is extremely important that this information be reliable since significant sums of money are at stake in these investment and lending decisions. ii. A user of the financial statements of an entity who views the information they obtain as being low quality, or risky, will demand a higher return for his or her investment in that entity. 1. Risk premium: the difference between the return demanded by the investors and the return that would be demanded in the absence of any associated risk iii. Low quality information can be caused by either intentional or unintentional misstatements of that information. 2. Unintentional misstatements in the financial statements often occur due to weak internal controls, unqualified staff, human judgment errors, or lack of attention to detail in the financial reporting process. 3. Mgt, who prepare the financial statements, have significant incentives to intentionally misstate the financial statements to make the company appear more profitable than it is a. Moral hazard: situation in which one party gets involved in a risky event...
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...Issues and Problems Faced by Non Profit Organizations: Funding for Non Profit Organizations “Funding for Non-Profit Organizations” Introduction In general, non-profit organizations conduct business activities and actually raise revenues but their surplus funds are not distributed to owners or shareholders. They operate with the help of some staff who are, although paid salaries, do not earn as much as those who are employed in business corporations that operate for profit. There are also volunteers who provide manpower, skills and talents but are usually paid minimally or get no payment at all. As such, non-profit organizations are exempted from income and property taxation. While businesses and corporations are a source of funding, volunteerism renders the necessary fuel to keep non-profit organizations moving. By and large, non-profit organizations operate relying heavily on volunteer workers and generating funds through the assistance of business benefactors and foundations as well as through fund-raising activities. The number of people or staff that they maintain varies according to the size of the organization, but one thing that can be said about most of them is that they are generally understaffed primarily because of limited funds. DISCUSSION There are many existing international, national and local non-profit organizations. One common thread about them is that they exist for a cause, which...
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...Discuss the Need for Outsourcing the Internal Audit Function in A Company Traditional internal audit function is defined as an independent appraisal activity to review internal control activities in companies. Dezoort (2001) implies that with the extension of business activities, the internal audit function has evolved from the traditional supervision to value adding which includes a wider scale of audit-related work so as to maximize the value of a business company. This focus on adding value to the corporation through a variety of internal audit services has raised concerns about the ability of in-house auditors to perform the wider-scale audit function in a more professional and cost-saving manner (Chapman and Anderson, 2002). Due to fierce market competitions and overcapacities, company managements set out to downsize company staff and put the focus on its profit-producing business, tending to outsource (referred to the practice that one accounting firm provides audit-related services for a business organization) internal audit function to engage external specialists to present a highly cost-saving and professional performance. Although some evidence suggests that there are many limitations of outsourced activities, this essay asserts that outsourced internal audit function plays an essential role in the development process of a corporation and there is a need to outsource that function. In consequence, these positive effects on companies will be described principally...
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...Audit From Wikipedia, the free encyclopedia For other uses, see Audit (disambiguation). The examples and perspective in this article may not represent a worldwide view of the subject. Please improve this article and discuss the issue on the talk page. (January 2010) This article needs additional citations for verification. Please help improve this article by adding reliable references. Unsourced material may be challenged and removed. (October 2010) Accountancy Key concepts Accountant · Accounting period · Bookkeeping · Cash and accrual basis · Constant Item Purchasing Power Accounting · Cost of goods sold · Debits and credits · Double-entry system · Fair value accounting · FIFO & LIFO · GAAP / International Financial Reporting Standards · General ledger · Historical cost · Matching principle · Revenue recognition · Trial balance Fields of accounting Cost · Financial · Forensic · Fund · Management · Tax Financial statements Statement of Financial Position · Statement of cash flows · Statement of changes in equity · Statement of comprehensive income · Notes · MD&A · XBRL Auditing Auditor's report · Financial audit · GAAS / ISA · Internal audit · Sarbanes–Oxley Act Accounting qualifications CA · CCA · CGA · CMA · CPA · CGFM · APA This box: view · talk · edit The general definition of an audit is an evaluation of a person, organization, system, process, enterprise, project or product. The term most commonly refers to audits in accounting, but similar...
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...INTERNAL CONTROLS AND FRAUD PREVENTION IN NON-PROFIT ORGANIZATION WRITTEN BY DAVID SANNI Designed to provide information on key areas that can strengthen the internal control system of VI-MID-ISLAND SERVICE (VIMS) Submitted To VANESSA OLTMAN Faculty of Management Vancouver Island University Nanaimo, BC, Canada (Nov/15/2012) Table of Content 1.0 INTRODUCTION 3 2.0 NATURE OF FRAUD IN CANADIAN NON PROFIT ORGANIZATION 3 2.1 TYPE OF FRAUD IN NON PROFIT ORGANIZATIONS 3 2.2 PERPETRATORS OF FRAUD IN NON PROFIT ORGANIZATION 4 2.3 IMPACT OF FRAUD TO NON PROFIT ORGANIZATION 4 3.0 COMPREHENSIVE APROACHE TO REDUCE FRAUD 5 3.1 UNDERSTANDING INTERNAL CONTROL 5 3.2 BENEFIT OF INTERNAL CONTROL 5 3.3 LIMITATIONS OF INTERNAL CONTROL 6 3.4 CONTROL MEARSURES IN PREVENTING FRAUD 6 3.5 SUMMARY AND CONCLUSION……………………….………………….8 4.0 REFERENCE…… ……………………………………………………………9 1.0 INTRODUCTION The Canadian non profit sector has one of the largest populations in the world, accounting for over 7% GDP and creating 2 million full time jobs for Canadians. Further discoveries was made that 78% Canadians donates money to non profit Organization irrespective of all walks of life and income bracket. These donations are received to address core issues...
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...governance is to evaluates corporate activities, controls or procedures and ensures that they are adequate and in compliance with senior management's recommendations and human resources guidelines. An internal audit also helps a firm adhere with regulatory standards and industry practices.An internal auditor evaluates a firm's processes, "controls" and mechanisms to ensure that they are "adequate" and "functional". A control is a group of instructions that top management puts into place to avoid losses due to human error, technology breakdowns or fraud. A "functional" control provides corrections to internal problems. A control is "adequate" when it clarifies instructions for job performance and problem reporting. An auditor also ensures that a firm's activities and controls abide by government mandates or industry regulations. (Codjia, 2013) Moreover the role and responsibility of an external auditor is to provide assurance to the general public regarding the truth and fairness of the information presented in the audited reports of the client's financial statements. External auditors are employees of a public accounting firm which has been engaged to conduct the audit of a particular company's financial statements (audit client). Since the general public relies heavily on the audit opinion by a public accounting firm to make investment decisions. Therefore auditors play an important role in corporate governances but...
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