...The accountant has a major responsibility in preparing and presenting financial information to users of financial statements in an accurate, crystal clear and reliable manner. The case between Ultramares vs. Touche deals with the issue of damages caused by improper presentation of false and inaccurate financial information. Were the auditors in this case intentionally out to mis-lead third parties who would rely on the financial information? Were they negligent? Ultramares sued Touche on the basis of negligence however there was no contractual relationship between the auditing firm and Ultramares and lost. OR YOU CAN REFRAME THIS SENTENSE LIKE THIS (Though there was no contractual relationship between the auditing firm and Ultramares, Ultramares sued Touche on the basis of negligence and lost). The ruling was Touche did not have any responsibility towards the defendant due to the privity relationship with the auditor. This case shows critical role of audit in the business field, and also warned us of the accountabilities and responsibilities of audit. Touche was definitely responsible for the loss of Ultramares incurred. The only reason Ultramares came to the decision to loan the funds was due to the auditor’s financial report. So was the auditor fraudulent? No the auditor did not intend to commit fraud. Was the auditor negligent? Yes definitely, the auditor did not perform well in his job. Prior to the auditor preparing his final trail balance, the accountant from...
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...Compilation • Compiled financial statements represent the most basic level of service CPAs provide with respect to financial statements. • In a compilation engagement, the accountant assists management in presenting financial information in the form of financial statements without undertaking to obtain or provide any assurance that there are no material modifications that should be made to the financial statements. • In a compilation, the CPA must comply with Statements on Standards for Accounting and Review Services (SSARSs), which require the accountant to have an understanding of the industry in which the client operates, obtain knowledge about the client, and read the financial statements and consider whether such financial statements appear appropriate in form and free from obvious material errors. • A compilation does not contemplate performing inquiry, analytical procedures, or other procedures ordinarily performed in a review; or obtaining an understanding of the entity’s internal control; assessing fraud risk; or testing of accounting records; or other procedures ordinarily performed in an audit. • The CPA issues a report stating the compilation was performed in accordance with Statements on Standards for Accounting and Review Services; and that the accountant has not audited or reviewed the financial statements and accordingly...
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...ACCOUNTING vs. HUMAN RESOURCES Research, Comparison, and Recommendation Irina Mashevsky DeVry University Contents Introduction 1 The purpose of the report 1 Report organization 1 Sources and methods 1 Job overview 2 Accounting 2 Job description 2 Working environment and hours 2 Human Resources 2 Job description 2 Working environment and hours 2 Job requirements 3 Accounting 3 Skills and personality traits 3 Education/Training 3 Human Resources 3 Skills and personality traits 3 Education/Training 3 Employment outlook 4 Accounting 4 Current statistics 4 Salary 4 Future predictions 4 Related occupations 4 Human Resources 5 Current statistics 5 Salary 5 Future predictions 5 Related occupations 5 Job satisfaction 6 Conclusion 6 Summary 7 References 8 Introduction On average people spend 40-50 years and even longer in the work force, which makes the choice of the career path one of the most important in our lives. A satisfying career can be a source of financial security, benefits, and gives a great sense of accomplishment. This decision requires a lot of thought and research. To make the best choice possible it is important to choose a career that is compatible with an individual’s personality, capability, and background, has the opportunity for professional growth, and requires a practical amount of education and training. The purpose of the report The purpose of this report is to present, analyze, and evaluate two career choices...
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...Chapter 1 The Nature and Purpose of Accoun3ng McGraw-Hill/Irwin Copyright © 2011. The McGraw-Hill Companies. All Rights Reserved. What Accoun0ng Does • Accoun3ng is a system that provides informa3on on: – Amounts of resources. – How resources were financed. – Results achieved by using resources. • For either: – Par3es inside or outside of organiza3on. – Profit and nonprofit organiza3ons. 1-2 Categories of Accoun0ng Informa0on • Opera3ng • Financial accoun3ng. • Management accoun3ng. • Tax accoun3ng. 1-3 Opera0ng Informa0on • Needed to conduct day‐to‐day ac3vi3es. • Largest quan3ty of accoun3ng data. • Examples: – Hours worked by employees. – Inventory on hand. – Amounts owed by customers. – Amount of money in bank. 1-4 Financial Accoun0ng Informa0on • For external users (investors) and managers. • Used by investors to make decisions to buy, sell, or hold shares of a company. • Annual report and its financial statements. – Common rules used so investors can compare with other companies’ financial statements. – No “tailor‐made” informa3on 1-5 Management Accoun0ng Informa0on • For internal users such as president, marke3ng manager, produc3on manager, etc. • Used for three management func3ons: – Planning. – Implementa3on. – Control. 1-6 Planning • Deciding what ac3ons should be taken. • Decision making involves: 1. 2. 3. 4. 5. Iden3fy problem or opportunity...
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...it is to that standard and potential outcome that forensic accountants generally have to work. Forensic accountants, also referred to as forensic auditors or investigative auditors, often have to give expert evidence at the eventual trial. There are several organizations worldwide that provide continuing education and certification for forensic accountants. There has been a growing need for this specialized field with recent company scandals that have occurred. Forensic accountants utilize an understanding of business information and financial reporting systems, accounting and auditing standards and procedures, evidence gathering and investigative techniques, and litigation processes and procedures to perform their work. The main goal of their engagements is to provide the answers to the how, where, what, why, and who committed the alleged allegations. They will use the same basic procedures for obtaining evidence of the crimes that they investigate. They will examine records and interview suspects to determine the answers to these questions. Forensic accountants are also increasingly playing more proactive risk reduction roles by designing and performing extended procedures as part of the statutory audit, acting as advisers to audit committees, fraud deterrence engagements, and assisting in investment analyst research. Most companies will not publicize that they have used the services of a forensic accountant because they do not want the public to know that something...
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... or suitable to courts of judicature or to public discussions and debate”. Therefore, forensic accounting is generally defined as relating and applying financial facts to legal problems (Singleton and Singleton 12). Forensic accounting consists of a combination of the techniques that are used in accounting, auditing, and investigative work. The focus of this paper is on the concept of forensic auditing; however, forensic auditing cannot be fully understood without incorporating all of the facts about forensic accounting. Most situations that involve forensic auditing will deal with proposed fraudulent activities, but there are some cases that may deal with non-fraudulent activities, such as settlements of monetary disputes (“Student Accountant”). Throughout this paper, we will discuss, in detail, the profession of forensic auditing and forensic accounting in relation to fraudulent activities. What is Forensic Auditing? Forensic auditing and financial auditing are not related in any way; rather, they have their own distinct objectives that are set to achieve different goals. Forensic auditing can be defined as “the process of detecting, preventing, and correcting fraudulent activities” and focuses on establishing an environment that will help to encourage the detection and prevention of these fraudulent activities (Singleton and Singleton 14-15). Thus, forensic auditing focuses on the strength and effectiveness of a company’s internal...
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...Licensed to: iChapters User Licensed to: iChapters User CONTEMPORARY AUDITING REAL ISSUES & CASES MICHAEL C. KNAPP SEVENTH EDITION MAKE IT YOURS! SELECT JUST THE CASES YOU NEED Through Cengage Learning’s Make It Yours, you can — simply, quickly, and affordably — create a quality auditing text that is tailored to your course. • Pick your coverage and only pay for the cases you use. • Add cases from a prior edition of Knapp’s Contemporary Auditing. • Add your course materials and assignments. • Pick your own unique cover design. We recognize that not every program covers the same cases and topics in your auditing course. Chris Knapp wrote his case book for people to use either as a core e book or as a supplement to an existing book. If you would like to use a custom auditing case book or supplement the South-Western accounting book you are currently using, simply check the cases you want to include, indicate if there are other course materials you would like to add, and click submit. A Cengage Learning representative will contact you to review and confirm your order. G E T S T A R T E D Visit www.custom.cengage.com/makeityours/knapp7e to make your selections and provide details on anything else you would like to include. Prefer to use pen and paper? No problem. Fill out questions 1-4 and fax this form to 1.800.270.3310. A Custom Solutions editor will contact you within 2-3 business days to discuss the options you have selected...
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...Financial Statement Audit by Kendra James, Demand Media [pic] Auditors analyze material account balances during a financial statement audit. Related Articles • Forensic Audit vs. Financial Audit • How Does a CPA-Audited Financial Statement Add Value? • Financial Statement Certification • What Is a Certified Financial Statement? • Audit Procedures for Income Statements • Phases of the Audit Process A financial statement audit is an engagement performed by an independent accountant to provide assurance that an entity’s financial statements are reported in accordance with accounting principles generally accepted in the U.S. Specifically, certified public accountants, or CPAs, are obtained to provide audited financial statements to businesses, non profit organizations and government agencies. Each audit is customized to meet the needs of the organization. However, the overall approach to every audit is the same. Engagement Acceptance The American Institute of CPAs recommends that an auditor evaluate the risks associated with each engagement. Therefore, a CPA inquires about any special circumstances, the integrity of management and pending lawsuits before performing an audit. In addition, the auditor evaluates the staffing needed to complete the engagement and determines that each staff member is able to maintain an independent viewpoint while performing the engagement. Once the auditor decides to accept the engagement, an engagement letter is prepared...
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...Transcript of ZZZZ Best Company, Inc ZZZZ Best Company, Inc Case 1.9 Audit Review VS Full Audit Review • The accountant is not aware of any misstatements or material modifications that need to be made • Limited assurance • Auditor has no opinion on the financial statements, just looks them over Barry Minkow- 16 years old 1982 Carpet cleaning business turned insurance restoration Tom Padgett and Interstate Appraisal Services Ernst & Whinney- elaborate scheme to convince them History 1. Client imposed audit limitations 2. Limitations of audit evidence 3. Importance of auditor communication when one resigns & 8K filing Key Issues Audit- • Auditor obtains a high level of assurance • Auditor can express an opinion about the accuracy and level of assurance • Auditor tests internal controls and tests for misstatements and obtains and understanding of the entities internal control and fraud risk Matt Sepiol Samantha Claysen Limitations of Audit Evidence AU 326- Audit Evidence Auditors Used Confirmation, Documentation, and Analytical Procedures AU 326.08- Information from outside sources is better than from internal sources Confirmations were made by Tom Padgett who was involved in the scheme. Interstate Appraisal Services and Assured Property Management provided the Documentation Was Involved in Fraud Collusion amongst outside Parties Gives Evidence Limitations The client receiving payment doesn't prove the existence of those contracts. No third...
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...RESPONSIBILITIES OF THE INDEPENDENT AUDITOR Statutory Law A. Securities Act of 1933 B. Securities Exchange Act of 1934 C. RICO Act D. Private Securities Reform Act of 1995 I. Common Law A. Clients B. Third Parties C. Burden of Proof D. 1136 Tenants Case II. Terms A. Ordinary Negligence B. Gross Negligence C. Fraud D. Joint and Several Liability E. Proportionate Liability III. Limited Liability Partnerships vs. Limited Liability Corporations 4-1 Legal Responsibilities of the Independent Auditor I. Statutory Laws - Potential legal liability as defined by the Securities Act of 1933, the Securities Exchange Act of 1934, the Rico Act of 1970, and the Private Securities Litigation Reform Act of 1995. Questions concerning the Securities Acts of 1933 and 1934. 1. Describe the general purpose of each Act. 2. How does the auditor become subjected or exposed to each Act? 3. What are the specific provisions of each Act? Include in your discussion: -Who is the plaintiff? -Who has the burden of proof? -What civil or criminal penalties are provided by the Acts? A. Securities Act of 1933 1. Regulates the initial sale of securities in interstate commerce. 2. Auditor becomes subjected to the Act when he/she...
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...identifying, measuring, and communicating economic information about an organization for the purpose of making decisions and informed judgements. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | The work that accountants do is divided into three broad fields: 1. Financial Accounting consists of the process that results in the preparation and reporting of financial statments. The Bookkeeping activity is an important subdivision of financial accounting. Bookkeeping is the process of accumulating the financial results of an entity's activities. 2. Managerial Accounting consists of the use of economic and financial information to plan and control many activities of the entity and to support the management decision-making process. Cost Accounting is a subset of managerial accounting that is involved with the determination and accumulation of product or service costs. 3. Auditing, or Public Accounting is the function in which a firm's financial statements are reviewed or examined by an independent third party (the auditor). Public accounting firms and individual certified Public Accountants (CPAs) provide this auditing service. The work that accountants do is divided into three broad fields: 1. Financial Accounting consists of the process that results in the preparation and reporting of financial statments. The Bookkeeping activity is an important subdivision of financial accounting. Bookkeeping is the process...
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...and relationships can help to overcome these three related agency problems iv. Independent board of directors v. Independent board chair vi. Independent board subcommittees such as audit, remuneration and nomination 4. Stakeholder theory g) Reject the only important relationship is shareholders and managers, but consider from a much broader perspectiveshareholder is only one part of the group h) Stakeholders include employees, creditors, suppliers and so on, and they all have impact on the corporation to some extent. i) Company can only achieve its goal with a full and detailed understanding of the relationships it holders with different group of stakeholders. 5. Agency theory vs....
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...Salvador Carmona *, Marco Trombetta IE Business School, Calle Pinar, 15-1B, 28006 Madrid, Spain a r t i c l e i n f o a b s t r a c t The widespread acceptance of International Accounting Standards (IAS)/International Financial Reporting Standards (IFRS) makes it timely to examine their technical determinants as well as their implications for the accounting profession and the process of accounting harmonization. In this respect, we suggest that the principles-based approach to the standards and its inner flexibility enables the application of IAS/IFRS to countries with diverse accounting traditions and varying institutional conditions. Furthermore, the principles-based approach involves major changes in the expertise held by accountants and, hence, in their educational background, training programs, and in the organizational and business models of accounting firms. Finally, we submit that the standards set by the IAS/IFRS constitute a step forward in the process of accounting harmonization, although there is still far to go in the comparability of accounting measures across countries and regions. Ó 2008 Elsevier Inc. All rights reserved. Keywords: Globalization Accounting harmonization Convergence Principles-based standards Rules-based standards 1. Introduction The harmonization of accounting standards has made considerable progress within a relatively short period of time (Camfferman and Zeff, 2006). In 1993, Daimler Benz AG aimed to list on the New York Stock Exchange...
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... | Chapter Overview This chapter explains some fundamentals of accounting information systems and the historical development of it until the need to have one become so essential to meet the competitive environment. In addition, it discusses the role of systems within the organizational setting as well as accountants’ roles in using, designing and auditing the accounting information systems. Learning Objectives ▪ Explain the historical development of corporate accounting information systems ▪ Explain the nature, context and purpose of corporate accounting information systems. ▪ Explain the business information support systems. ▪ Examine the role of accountants and information systems. Learning Outcomes: On successful completion of this topic students should be able to: Describe the major influences changing the nature and context of accounting information systems; Demonstrate an understanding of business information support systems. Illustrate an awareness of the role of accountants, accounting and finance related specialists in accounting information systems; History of Accounting 10 Early Accounting • Early forms of accounting can be found in Egypt and Mesopotamia. • Some records existed before money often in the form of clay or other forms of recording marks. • Accounting was important...
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...PBSA 811 PEC – Individual Assignment MANUSCRIPT REVIEW FORM Student: 25807609 Name: Ngwanasegolo Walter Solomon MakgaiLecturer’ s name: Professor Pieter BuysModule name: Financial Reporting PBSA811Title of manuscript: Independent Reviews: Perceptions of Chartered Accountants (South Africa) Journal: Southern African Journal of Accountability and Auditing Research Vol. 12: 2011 (25-36) | | 1. Are the Title and Abstract Appropriate? Explain On the one hand, the paper title does not seem to fully capture the essence of the paper. The meaning is ambiguous in that, it might either mean the perceptions of chartered accountants study is conducted by an independent review, or, it might suggest that the study is about how Chartered accountants perceive independent reviews. On the other hand, the authors (Odendaal and De Jager, 2011) have rightly specified that the study applies to Chattered Accountants in South Africa. The research findings are based on this geographical location. But while the title could have been more comprehensive, the abstract seems sufficient in that it summarises the study objective as to “determine the perceptions of Chartered Accountants (South Africa) regarding independent reviews” and goes on to report the process of data collection (questionnaire) as well as the summarised findings of the study. Recommendations are also outlined in the abstract. The abstract therefore provides a concise summary of what the reader should expect in the entire...
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