...detrimental to your business. The success of a business is partly determined by it’s employees. Employees that are well rested, not overworked, and not under a lot of stress are better able to perform in the work environment. They are more productive and higher productivity means higher profits for the company. Before companies lay-off or terminate their employees they need to know all of the costs and not just the financial costs. In most cases the cost of laying off the employees is higher in the long run. Anna Hooper Amato, Neil. "More North American companies rewarding internal auditors with pay raises, perks." Journal of Accountancy . (2013): n. page. Web. 22 Jan. 2013. More North American companies rewarding internal auditors with pay raises, perks In 2012 more North American companies started rewarding their internal auditors with pay...
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...Procedural Component IV. Conclusion Compliance Auditing Compliance auditing determines whether a process or transaction has or has not followed applicable rules. If rules are violated, the auditor determines the cause and recommends ways to prevent future deviations. The rules being tested can be those created by the organization for itself through corporate by-laws, policies, plans, and procedures; can be those imposed on the organization through external laws and regulations; or can be those external standards that the organization has chosen to follow. In addition Compliance auditors gather evidence regarding fraudulent or abusive activity affecting governmental entities. Their audits are designed to detect and deter the misappropriation of public assets and to reduce future fraud risks. (Associates, 2003) Compliance auditors must have the skills to research issues effectively using authoritative materials, understand how to apply the knowledge gained to the circumstances being tested, and be able to explain to the organization what compliance means in day-today operations. Reaching a conclusion that an outcome complies or does not comply with a standard is not necessarily simple, especially in domains governed by complex regulations (e.g. occupational health and safety, environmental, employment practices, health care, insurance, federal grants and contracts, employee pensions and benefits, federal tax etc.)....
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...Opinion Shopping Who are the stakeholders involved in this situation? Investors/Shareholders In terms of auditor switching, shareholders are dependent on the reliability of audit opinions on the financial reporting of management. Shareholders rely heavily on the quality of audits in valuing their shareholder wealth and making advised business decisions. The Board/ Audit Committee The directors are elected by the shareholders and are responsible for representing shareholders best interests and in overseeing management. They are interested in long-term profitability and are responsible for the audit committee overseeing both the external and internal audit functions. External Auditors External Auditors are concerned with minimizing legal and professional risk to maintain their reputation. They are responsible for objectively acquiring and assessing evidence regarding economic actions and events made by management. They are also responsible for communicating these results to interested parties. The two external auditors involved are the current auditor Paige & Gentry and Webster & Co. Regulators Regulators are concerned with the company’s compliance with specific environmental standards, health & safety product by-laws, and professional conduct rules. The three regulators involved in this case include Canada Environment Protection Agency, Health Canada, and Institute of Chartered Accounting Ontario. Customers Customers’ satisfaction...
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...Audit Proposal Audits are a critical and an important part of every company whether performed internally or externally. With the expansion of Kudler Fine Foods and update of their information system, the company must ensure system processes are functioning properly. Conducting an audit will identify any problems with the newly implemented computer system. There are several types of audits that can be performed for each process. The most important factor is choosing the appropriate type of audit that best fits the process. Most audits are conducted similarly and should always be completed in an efficient and effective manner. Furthermore, there are events that could prevent the reliance of an audit through the computer in which management must be made aware of and evaluate accordingly. Types of Audits There are various types of audits that will give credence to the accounting records, accounting policies, and financial statements of a business organization. For example, an internal audit can be conducted of the accounting department to examine company policies and procedures as well as development and evaluations of internal controls. Internal audits will provide management with insight and recommendations based on analysis and assessment of data and business processes. An external audit will assess the computer-based accounting system and provide judgment on the accuracy and fairness of financial statements. “The fairness evaluation is conducted in the context of generally...
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...still exist, and there is more work to do. Apple knows that workers are counting on them and they will not stop until every person in their supply chain is treated with the respect and dignity they deserve There has been no amendment to Apple Code of Conduct policy since 2014 once Apple Started taking previous audit scores into thought and conduct careful risk assessments with Suppliers World Health Organization had not been audited within the past before award the new business. In 2014, we have a tendency to reviewed 459 suppliers, and factored their responsibility performance into our choices. This engagement has allowed Apple to deal with over 700 findings associated with labor standards, employee safety, permits, environmental hazards, and chemical management before production began (Apple – 2014 provider Code of Conduct). Apple has created vital progress, gaps still exist, and there's additional work to try and do. Apple is aware of that staff square measure relying on them and that they won't stop till one and all in their provide chain is treated with the respect and dignity they merit (Apple - provider Responsibility 2015 Progress Report). industry. To track working conditions at suppliers’...
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...Government regulated monopoly GAAP General Standards 1. Adequate training and proficiency 2. Independence in mental attitude 3. Due professional care Standards of Field Work Proper Planning and supervision Understanding of the entity Sufficient appropriate evidence Standards of Reporting Statements prepared in accordance with GAAP Circumstances when GAAP not consistently followed Adequacy of disclosures Expression of opinion on financial statements *Test* Table 5.1 Definitions And broad broad stuff Can accept a gift from a client as long as its no more than “token” or the amount the firm gives you You can indirectly own stock in an auditing client if its immaterial to your net worth You cannot be paid in stock Because we don’t see the audit as one event, its not a series of events even though that looks like it. Because once you have the client you usually have it for a good amount of time. “The professional engagement period begins when the registered public accounting firm either signs an initial engagement letter (or other agreement to review or audit a client’s financial statements) or begins audit, review, or attest procedures whichever is earlier: and (B) the professional engagement period ends when the audit client or the registered public accounting firm notifies the commission that the client is no longer that firm’s audit client. You might be able to write a contract that can say the audit engagement is only a year and you might get...
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...incidental objective. a. Primary objective – as per Section 227 of the Companies Act 1956, the primary duty (objective) of the auditor is to report to the owners whether the balance sheet gives a true and fair view of the Company’s state of affairs and the profit and loss A/c gives a correct figure of profit of loss for the financial year. b. Secondary objective – it is also called the incidental objective as it is incidental to the satisfaction of the main objective. The incidental objectives of auditing are: i. Detection and prevention of Frauds, and ii. Detection and prevention of Errors. Detection of material frauds and errors as an incidental objective of independent financial auditing flows from the main objective of determining whether or not the financial statements give a true and fair view. As the Statement on auditing Practices issued by the Institute of Chartered Accountants of India states, an auditor should bear in mind the possibility of the existence of frauds or errors in the accounts under audit since they may cause the financial position to be misstated. Fraud refers to intentional misrepresentation of financial information with the intention to deceive. Frauds can take place in the form of manipulation of accounts, misappropriation of cash and misappropriation of goods. It is of great importance for the auditor to detect any frauds, and prevent their recurrence. Errors refer to unintentional mistake in the financial information arising on account...
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...Accountant (CPA). It became one of top 5 chicken suppliers within mid-tier producers in the country due to increasing demand in year 2000 from superstores and fast-food chains, high chicken consumption by Malaysian, and expansion of chicken industry. However, in 2008, cost of poultry production increased. EPM operating cash was low and severe, that it “had puzzled Encik Selamat” (p.4). Other problems were also identified. Decision Maker: Credit Controller Ms Choy is the decision maker as she has the responsibility to make the right decision regarding unethical conduct of Encik Selamat, she can convince Board of Directors about En. Selamat. If she failed to convince BOD to take action, she can then reveal the issue to the auditor, besides mentioning to the auditor the lack of segregation of duty in the business operation. She can execute and monitor implementation and performance of employees under her responsibility and convince her friend, Puan Azura to do the same. What should Ms. Choy do? Analysis: 1) SWOT analysis S – STRENGTHS * One of top 5 chicken suppliers * Continuing profitability and growth * Good promotional strategy * Qualified accountant (Encik Kasim) * Reliable Credit Controller (Ms Choy) * Encik Selamat’s reputation in community W – WEAKNESSES * En. Selamat’s lack of expertise in poultry and meat industry * 2008’s operational crisis * Lack of focus of business operation * Cash flow issue * Conflict of interest * Possible error/...
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...1. Discuss the environmental, strategic and organizational changes that occurred over the life of Andersen in the context of Figure 11.1. Architectural design of firm may vary among companies. There are most common categories are business environment, strategy, and organizational architecture. Business environment of Andersen includes technology that was used effectively; structure of its markets, regulations which helped Andersen to grow along with its reputation. The second category is strategy which includes Andersen’s primary goals, choice of business, and services. Finally, the last category is organizational architecture which explains how authority is distributed among Andersen’s employees, and how rewards determined. BUSINESS ENVIRONMENT TECHNOLOGY | MARKETS | REGULATIONS | Company started using computers for bookkeeping.Company developed the largest technology practice. | Arthur Andersen was well respected, reputable auditing company for many customers.Early 1950s Andersen entered in computer consulting business. | The federal law in 1930’s which required companies to provide their financial statements to an independent auditor each year helped Andersen’s grow. | STRATEGY Quality audits were valued more than higher short-run firm profits.“Four cornerstones” of good service, quality audits, well managed staff and profits.Auditors were rewarded and promoted for making sound audit decisions. Mid-level partner was making average $160,000 in today’s currency.In 1990s...
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...too easy to become caught up in this stampede for change, but how far can accounting change and for it still to be called accounting? This chapter seeks to explore the major issues facing contemporary ®nancial reporting ± this will include its interrelationship with external auditing and the provision of assurance to those outside the reporting entity. After all, `[e]ffective reporting and accounting, and external scrutiny from auditors, are essential for effective corporate governance' (Company Law Review Steering Committee, 2001: para. 8.1). To understand the ®nancial statements, one needs to appreciate the auditors' work and opinion, and, conversely, to understand the auditors' work and opinion, it is necessary to appreciate the scope and limitations of the ®nancial statements. All too often, ®nancial reporting and external auditing are treated and discussed in isolation despite being inextricably linked. However, the ®nal ®gures in the ®nancial statements may come about as a result of negotiations between management and their auditors ± with the auditors examining the reasonableness of management's justi®cations for their representations. Indeed, the modern audit with its emphasis on high-level business risks could almost be viewed as the `audit of motivations' ± to understand the ®gures in the ®nancial statements, it is important to understand management's motivations. Financial reporting and auditing are not just technical subjects, but they...
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...International Journal of Business and Management December, 2009 Auditor Independence: Malaysian Accountants’ Perceptions Nur Barizah Abu Bakar (Corresponding author) Department of Accounting, Faculty of Economics and Management Sciences International Islamic University Malaysia PO Box, 10, 50728, Kuala Lumpur, Malaysia Tel: 60-19-288-4540 E-mail: nur.barizah@gmail.com Maslina Ahmad Department of Accounting, Faculty of Economics and Management Sciences International Islamic University Malaysia PO Box, 10, 50728, Kuala Lumpur, Malaysia E-mail: maslina@iiu.edu.my Abstract Independence is the primary justification of the existence, and thus the hallmark of the auditing profession. It is recognized as the primary attribute to be maintained by auditors in all circumstances. This study attempts to explore the determinants of auditor independence as perceived by Malaysian accountants using a self-administered mail survey. It was evidenced from the survey that size of audit fees is the most important factor, followed by competition, size of audit firm, tenure, provision of management advisory service and finally audit committee. More specifically, the study indicates that (1) larger size of audit fees, (2) audit firms operating in a higher level of competitive environments, (3) smaller audit firms, (4) audit firms serving a given client over a longer duration, (5) audit firms providing MAS, and, (6) the non-existence of an audit committee, are perceived as having a higher risk of...
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...may vary. The SEC final rules define an audit committee financial expert as a person who has all of the following attributes: * An understanding of GAAP and financial statements. * The ability to assess the general application of such principles in connection with the accounting for estimates, accruals, and reserves. * Experience preparing, auditing, analyzing, or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the issues that can be raised by the registrant’s financial statements, or experience actively supervising one or more persons engaged in such activities. * A lack of proper communication with management, the internal auditor, and external auditors. * Inadequate resources including access to legal counsel and advisors. * Insufficient staff support. * Lack of exercising due diligence. * Unclear mission and undefined authority in the committee charter. * Insufficient number of qualified committee members. * Inadequate compensation to demand high-quality performance. * Lack of accountability for committee performance. * Characteristics of a good director include the ability to: (a) ask the difficult questions; (b) work well with others; (c) utilize industry experience and awareness; (d) provide valuable input; (e) be available when needed; (f) be alert and inquisitive; (g) use business knowledge; (h) contribute to committee work; (i) attend...
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...framework for financial statement auditors and related research questions Mark E. Peecher a,⇑, Ira Solomon b,1, Ken T. Trotman c,2 a Department of Accountancy, College of Business, University of Illinois at Urbana-Champaign, 1206 South Sixth Street, Champaign, IL 61820, United States A.B. Freeman School of Business, Tulane University, 7 McAlister Drive, New Orleans, LA 70118, United States c School of Accounting, Australian School of Business, University of New South Wales, Sydney 2052, Australia b a b s t r a c t We address the following overarching questions: What kind of accountability framework could regulators use to (a) motivate auditors to improve audit quality, and (b) evaluate how well auditors have carried out their duties? We draw on research in accounting, economics, psychology, and neuroscience to critique the accountabilities, incentives, and learning opportunities embedded in auditors’ extant regulatory environment. We first establish that forward-looking estimates are the basis for most financial statement information and that some of these estimates are highly uncertain, which increases the challenges faced by auditors. We propose an accountability framework with two dimensions: rewards versus penalties and processes versus outcomes. We show that auditors’ current regulatory accountabilities generally are in the form of penalties rather than rewards and primarily depend on audit outcomes rather than attributes of auditors’ judgment processes. We provide...
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...COMPANY AUDITOR IN POST-ENRON SOUTH AFRICA Hannine Drake THESIS PRESENTED IN FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF LAWS AT THE UNIVERSITY OF STELLENBOSCH Supervisor: Prof A.H. van Wyk March 2009 ii DECLARATION By submitting this thesis electronically, I declare that the entirety of the work contained therein is my own, original work, that I am the owner of the copyright thereof (unless to the extent explicitly otherwise stated) and that I have not previously in its entirety or in part submitted it for obtaining any qualification. Date: 25 February 2009 Copyright © 2009 Stellenbosch University All rights reserved iii ACKNOWLEDGEMENTS In acknowledgement to all who have contributed to this work in some form: writing this thesis would have otherwise been like swimming through mud. To my supervisor, Professor Andreas van Wyk, thank you for your leadership, patience, and academic skill in guiding me through the research process. To Adéle Mulder and Charl Marais, thank you for your continuous insight and perspectives, both academic and otherwise. And finally to Hilda and Gerrie Steyn, who have been absolutely crucial throughout all my years of study, thank you for your indispensable support, in all its forms. iv SUMMARY The worldwide increase of corporate failures on the scale of Enron and WorldCom has sparked a renewed international trend of corporate governance review. With the external company auditor blamed...
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... 21 - 23 References and Bibliography: 24 - 25 Environmental Management Accounting (EMA) versus Environmental Financial Accounting (EFA): If so, what is the significance of knowing the better accounting method to use when identifying environmental cost? It has become indispensable for companies to increase their responsibility regarding all facets of the environment and to acclimatize existing practices to cause limited environmental impairment; more especially at this present time when stakeholders linger ‘bitterly’ about how corporate failure have influence organization’s environmental performance and measurement issues. Yoking this emergent obligation within the corporate sector is consequently a strategic component in any strategy for accomplishing the goal of sustainable development; and evaluating the viability of such a strategy requires both the resolution of scientific and manufacturing problems; and also the attention of how organization’s account for environmental cost to demonstrate their corporate social responsibilities. The Environmental Management Accounting (EMA) and the Environmental Financial Accounting (EFA) are the two mainstream accounting approaches that have allowed an upsurge in the demand for relevant information to augment...
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