...University of Amsterdam Faculty of Economics and Business Msc. Accountancy and Control Assurance Assurance: Essay Assignment Assigned article: Geiger, M.A., & Rama, D.V. (2006). Audit Firm Size and Going-Concern Reporting Accuracy. Accounting Horizons, 20(1), 1-17. Additional articles: Carcello, J.V. & Neal, T.L. (2000). Audit Committee Composition and Auditor Reporting. The Accounting Review, 75(4), 453-467. Geiger, M.A. & Raghunandan, K. (2002). Auditor Tenure and Audit Reporting Failures. Auditing: A Journal of Practice & Theory, 21(1), 67-78. Name: Karlijn Dirks Student number: 10674837 Tutorial Group: 2 fulltime Lecturer: drs. Francesco Campisi RA Date: 10 February 2016 Paper: 8 * Summary The papers that will be discussed in this essay all revolve around auditor reporting. Especially about issuing going-concern modified reports in relationship with different variables. The variable discussed in the first paper is audit firm size. For the second paper auditor tenure is the variable and for the final paper audit committee composition is the variable that will be looked at. The rest of this section will provide summaries of the three articles. Paper 1. Geiger & Rama (2006) investigate whether audit firm size affects the accuracy of going-concern reporting. They look at two different type of errors, type I errors occur when a going-concern modified report is issued but the client does not go bankrupt. A type II error...
Words: 1786 - Pages: 8
...AUDITING: A JOURNAL OF PRACTICE & THEORY Vol. 24, No. 1 May 2005 pp. 21ñ35 Recent Changes in the Association between Bankruptcies and Prior Audit Opinions Marshall A. Geiger, K. Raghunandan, and Dasaratha V. Rama SUMMARY: The intense legislative and media scrutiny after a series of high-profile corporate failures, coupled with the paradigm shift in the regulation of the auditing profession brought forth by the Sarbanes-Oxley Act, suggests that auditorsí decisions would be more conservative in the period after December 2001. Based on analyses of 226 financially stressed companies that entered bankruptcy during the period from 2000 to 2003, we find that auditors are more likely to issue going-concern modified audit opinions in the period after December 2001. Since the post-December 2001 period coincides with recovery from a recession in the U.S., we also examine prior audit opinions for 93 companies entering bankruptcy in 1991 and 1992. We find that auditors were also more likely to issue prior going-concern modified audit opinions in 2002ñ03 than in the earlier recession recovery period. Following the technique used in Francis and Krishnan (2002), we document that the increase in going-concern modification rates for bankrupt companies after December 2001 is due to changes in auditor reporting decisions and not solely due to differences in client characteristics between the time periods studied. Keywords: bankruptcy; going-concern reports. Data Availability: Contact the authors...
Words: 8724 - Pages: 35
...Abstract This paper focuses on the modifications and opinions of an audit report. An audit report is a crucial part in the auditing process. It is a guide for users of the financial information. Auditors issue opinions on the financial statements based on certain criteria. The main thing is if the financial statements are presented in accordance to GAAP. Also, modifications can occur after the opinion is issued. Modifications vary depending on the issue at hand. Changes in principles or a report involving other auditors are a few. More will be addressed in the paper. An audit report is different is many ways. Even for one company, the audit report may not be the same every year. Modifications and Opinions in Audit Reports Every publicly traded company gets audited. Pop Iuliana (2012) says, “The purpose of an audit is to improve the degree of trust of the users across the financial situations” (p.454). Companies must present their financial statements in accordance to Generally Accepted Accounting Principles (GAAP). The final stage of an audit is writing an audit report. An audit report “expresses an opinion over the audited financial situations so that any user of this information is able to take decisions based on it” (Iuliana, 2012, p. 453). A standard audit report contains eight parts. The eight parts are report title, audit report address, introductory paragraph, management’s responsibility, auditor’s responsibility, opinion...
Words: 2456 - Pages: 10
...CHAPTER 1 INTRODUCTION 1.1 Research Background The auditor’s roles are to provide an opinion on financial statement and to ensure that the statements are based on true and fair image of company performance to the stakeholders. They are authorized in checking the accuracy of business records. Opinions given by the auditor gives an added credibility to the financial statements (Maqableh, 2014). Commonly, investors often rely on financial statements provided by auditor in making investment judgement and increase the productivity of financial markets. Financial statements provided by the auditors are often reviewed as credible, unbiased opinion that truly reflects the company financial positions. There’s no doubt that auditor independence is the core of auditing profession when establishing its objectivity and integrity. Auditor independence, in particular, indicates the ability of an auditor to disregard any influence or control when conducting an opinion (AAA, 1973). Therefore, auditor must be, and must be seen to be independent of company management. Lack of independence causes audits to be considered to have little value (Johnstone, Sutton, & Warfield, 2001). This is further supported by Elliott and Jacobson (1998) that a particular interest may trigger a risk that could weaken the outcome of the audit which in turn impairs the auditor independence. Hence, independence is fundamental to the purpose served by auditors (Moore et al., 2002). This study is limited to...
Words: 12977 - Pages: 52
...The Great Emperor Raghu was a valorous king of the Ikshvaku dynasty. According to the Raghuvamsha, he was born to king Dilīpa and his queen Sudakshina. His name in Sanskrit means the fast one, deriving from Raghu's chariot driving abilities. So celebrated were the exploits of Raghu, that his dynasty itself came to be known as the Raghuvamsha or the Raghukula after him. The history of his dynasty is elaborated upon by Kalidasa in his Raghuvamsha. Contents [hide] 1 Lineage 2 Life 3 Legacy 4 See also 5 Notes [edit]Lineage A number of Puranas, which include the Vishnu Purana, the Vayu Purana, the Linga Purana, mention Dirghabahu as the son of Dilīpa and Raghu as the son of Dirghabahu. But the Harivamsha, the Brahma Purana and the Shiva Purana mention Raghu as son of Dilīpa and Dirghavahu as his epithet.[1] The lineage described in the Raghuvamsha mention Dilīpa as the father of Raghu. According to most of the Puaranas, as well as Kalidasa, Raghu was succeeded by his son Aja, who was the father of Dasharatha, the father of Rama, Lakshmana, Bharata and Shatrughna. [edit]Life Raghu was a great donor. It is said that no one returns from his palace empty-handed. Raghu's father Dilīpa was a very pious king, and performed as many as 100 yajnas or sacrificial rituals. Until he did so, only Indra, king of the Gods, had earned that distinction. In a bid to prevent Dilipa from equaling his record, Indra placed many hurdles in the path of the successful completion of the 100th...
Words: 381 - Pages: 2
...INTRODUCTION INDUSTRY PROFILE Ashok Leyland is a commercial vehicle manufacturing company based in Chennai, India. Founded in 1948, the company is one of India's leading manufacturers of commercial vehicles, such as trucks and buses, as well as emergency and military vehicles. Operating six plants, Ashok Leyland also makes spare parts and engines for industrial and marine applications. It sells about 60,000 vehicles and about 7,000 engines annually. It is the second largest commercial vehicle company in India in the medium and heavy commercial vehicle (M&HCV) segment with a market share of 28% (2007-08). With passenger transportation options ranging from 19 seaters to 80 seaters, Ashok Leyland is a market leader in the bus segment. The company claims to carry over 60 million passengers a day, more people than the entire Indian rail network. In the trucks segment Ashok Leyland primarily concentrates on the 16 ton to 25 ton range of trucks. However Ashok Leyland has presence in the entire truck range starting from 7.5 tons to 49 tons. The joint venture announced with Nissan Motors of Japan would improve its presence in the Light Commercial Vehicle (LCV) segment (<7.5 tons). Type : public Industry : automotive Founded : 1948 Head quarters :chennai, India Key people : R.Seshasayee, R.J. Shahaney, S.P. Hinduja, D.G. Hinduja Vinod Dasari Products :Automobiles , Engines. Revenue :US$ 1.4 billion(2008-09) Employees :11,500 Parent : Hinduja group Subsidiaries : Ennore...
Words: 2011 - Pages: 9
...Assignment Unit 1 H By Mula Raghunandan Reddy Information Technology is the utilization of any computers, storage, networking and other physical devices, and procedures to make, procedure, store, secure, and trades all types of electronic information. Regularly, IT is as a part of the setting of big business operations rather than individual technologies. The business utilization of IT includes both computer technology and telephony. The term information technology was instituted by the Harvard Business Review, keeping in mind the end goal to make a qualification between purposes built machines intended to perform a constrained extent of functions and general purpose computing machines that could be modified for different assignments. As the IT business developed from the mid-twentieth century, it includes transistors and integrated...
Words: 579 - Pages: 3
...Evidence on the Audit Risk Model: Do Auditors Increase Audit Fees in the Presence of Intemal Control Deficiencies?* CHRIS E. HOGAN, Michigan State University MICHAEL S. WILKINS, Texas A&M University 1. Introduction Internal controls over financial reporting (ICOFR) should provide reasonable assurance about the reliability of financial statements by setting in place policies and procedures related to maintaining accounting records, authorizations, and safeguarding of assets.' For such controls to be effective, they should ensure, to the greatest extent possible, that material financial statement misstatements either cannot occur within a given functional area or will be detected and corrected by management before financial reports are issued. If ICOFR cannot provide this assurance, it is widely assumed that financial reporting quality will suffer. This assumption underlies many of the provisions of the Sarbanes-Oxley Act (SOX) of 2002, including the requirement that managers attest to the effectiveness of ICOFR. Although it may seem reasonable to assume that intemal control deficiencies and "bad accounting" go hand in hand, we contend that strong intemal controls are not necessary for reporting to be in compliance with generally accepted accounting principles (GAAP). Stated differently, financial reports are not generated in a vacuum; rather they are a joint product of management and an independent auditor. The audit risk model — which provides a framework for evaluating the relationship...
Words: 3497 - Pages: 14
...A Case analysis of Jensen Shoes: Jane Kravitz’s Story Mary C Gentile Pamela J Maus Harvard Business School PGP – I, BATCH 2014-16 SECTION - 7 GROUP - AL2 1. | 14S710 | Ms. Apoorva Agarwal | 2. | 14S714 | Mr. Gaurav Bansal | 3. | 14S729 | Mr. Raghunandan Balasubramanian | 4. | 14S747 | Mr. Sriman Kumar Pradhan | 5. | 14S748 | Ms. Subhasree Dantuluri | T. A. Pai Management Institute, Manipal Case Analysis of Jenson Shoes: Jane Kravitz’s Story Problem Statement In what ways can Jane Kravitz further persuade Lyndon Brooks to work in favor of completing his Strategic Performance objectives, in a restricted timeline, to achieve better evaluation incentives and bonuses for both of them? Reasons 1. Lyndon Brooks wasn’t assigned a job role of his choice, viz. a managing staff role. This led him to be less enthusiastic on current assignments. 2. Jane Kravitz didn’t work on the negative feedback she had received about Lyndon from the employees previously associated with him, which allowed Lyndon’s focus to deviate from the company’s objectives. 3. Lyndon was additionally assigned a project on environment consumer buying trends over his Latino and African American market study indirectly by the Executive Vice President on an urgent basis. 4. In spite of Jane’s continual support and necessary interventions in order to keep up with the timeline to fulfill the s.o’s, Lyndon continued to be indifferent towards his job role. 5. Jane was...
Words: 591 - Pages: 3
...WHITEFIELD Until the late 1980s, Whitefield was a small village. It has since become a major hub for the Indian technology industry. The Export Promotion Industrial Park (EPIP) at Whitefield of one of the country's first information technology parks - International Tech Park, Bangalore (ITPB) which houses offices of many IT and ITES companies. One of the oldest establishments is Tata Elxsi which came to Whitefield around the late 80s. The EPIP zone has offices of other IT and R&D giant like TCS, Accenture, UTL, Symbian, General Electric, SOA IT Solutions, Wipro, GE Medical Systems, iGate Global Solutions, Sapient, Manhattan Associates, SAP Labs, Dell Services (former Perot Systems), Dell, IBM, Intel, Mindtree Ltd, Sabre Holdings, CapeGemini, ABB and Oracle. INTERNATIONAL TECH PARK BANGALORE or simply ITPB (earlier known as ITPL), in Whitefield, is India’s first hi-tech park of its kind designed to provide a complete "work and play" environment for IT and technology-related businesses opened in 1998. It is unique in its 'work and play' concept, offering high-quality infrastructure combined with extensive amenities and recreational facilities and activities. ITPB has a built-up area of over 2,000,000 sq ft (190,000 m2) with more than 233 companies and over 320,000 people comprised by the community working out of ITPB. There are six buildings, named Discoverer, "Innovator”, Inventor, Explorer,Navigator, Creator, and Pioneer. In addition to this, ITPB also boasts of its own five-star...
Words: 841 - Pages: 4
...Journal of Finance and Accountancy The Effect of the Sarbanes-Oxley Act on Auditors’ Audit Performance Tae G. Ryu Metropolitan State College of Denver Barbara Uliss Metropolitan State College of Denver Chul-Young Roh East Tennessee State University ABSTRACT The issue of audit reporting for financially distressed firms continues to be of interest to the public and to legislators. Previous studies have consistently shown that auditors fail to issue going-concern opinions to more than half of bankrupt firms one year prior to bankruptcy. The Enron and Arthur Andersen failures in late 2001 and early 2002, respectively, led to the enactment of the Sarbanes-Oxley Act (SOX) in July 2002. Audit firms now claim that they have become much more conservative with respect to client retention and acceptance decisions because the risks associated with auditing increased significantly after the enactment of the SOX. The primary purpose of this study is to provide a basis for a proper evaluation of auditors’ performance. We conducted performance comparisons between the pre- and post-SOX periods. Although auditors are now expected to use a more vigorous audit process in deciding whether to issue going-concern or other qualified opinions to financially distressed firms, our preliminary results show that there is no significant difference between the two periods. Key words: Audit Decision, Going-Concern, Opinion, Z-score, Industry Failure Rate The Effect of Sarbanes Oxley...
Words: 2631 - Pages: 11
...based on consumer needs and feedback. It is this difference in approach that led one company to falter and the other to become one of the fastest growing companies in this sector. OLA has now not only beaten the competition but has bought( acquired) TFS for 200 million $. Let us analyse the differences in the two business models and what were the key factors that brought about this acquisition. Background check: TaxiForSure.com is a taxi aggregator company based in Bangalore, India. It provides facility to book a cab through calling, through their website or through their mobile application. Taxiforsure.com is run by Serendipity Infolabs, which was started in June 2011 by two graduates from IIM Ahmedabad, Aprameya Radhakrishna and Raghunandan G.[2] The company started providing its services in Bangalore in 2011 and expanded to Chennai and Delhi in 2013 after turning profitable in Bangalore.[3] In 2013, the company launched its mobile application for iOS and Android platforms and also started the facility to book cabs through Twitter.[4]It tied up with Goibibo in October, 2013 to offer airport services to its customers in Bangalore and Delhi.[5] The company expanded its operations toAhmedabad, Hyderabad, Baroda, Surat, Pune, Mysore and Rajkot in 2014. It has also started giving the option to hire luxury vehicles.[6] Of late, the company has...
Words: 856 - Pages: 4
...The International Accounting Standards Board (IASB) has one main role; this main role is to promote the use of accounting standards and to bring convergence of international financial reporting standards and national accounting standards. Other roles IASB consist of develop drafts of International Financial Reporting Standards (IFRS) and to carry out tasks alongside with the International Financial Reporting Committee (IFRIC), where the IASB role is to approve the interpretations by the IFRIC. Australia has joined the revolution of accounting integration by the intention to adopt IFRS in 2003, with implementation required for reporting periods on or after 1 January 2005 (Nobes & Zeff, 2008). Intention of adopting IFRS is to embrace international harmonisation by having a single universal set of accounting rules and to optimize accounting quality reducing diversity in accounting practices and information asymmetries. Concurrently, many scholars has raised doubts and speculation of this ideology of accounting standardisation stirred up by the adoption of the controversial International Accounting Standards (IAS) 39 or in Australia, the Australian Accounting Standards Board (AASB) 139: Financial Instruments: Recognition and Measurement which has been subject to much criticism (Armstrong, Barth, Jagalinzer, & Riedl, 2008; Barth, Landsman, & Lang, 2006). Due to this uproar, the IASB has decided to review the standards for financial instruments formulating a new financial...
Words: 2897 - Pages: 12
...might affect the audit quality, but only 4 identified factors which is size of audit firm, auditor’s tenure, auditor’s experience and pricing pressure will be discussed in this paper. 2.1 Independent Variable 2.1.1 Auditor’s Tenure and Audit Quality The studies on auditor tenure cannot be separated with the auditor switching studies which formally known as auditor rotation. Auditor rotation can either is mandatory or voluntary. Voluntary rotation is the clients have option to switch auditors while mandatory rotation is pushes clients to change auditors after a fixed period (Mohamed & Habib, 2013) Previous researches had indicated that auditor’s tenure is related to the impact on audit quality. According to Geiger and Raghunandan (2002), there were two viewpoints (regulator views and economic view) on the effect of...
Words: 3078 - Pages: 13
...Feasibility Analysis in Project Management- An Empirical Study By Dr. Cynthia Menezes, Associate Professor and Research Guide And Raghunandan G, Research Scholar, Canara Bank School of Management Studies, Bangalore University Abstract: The system analyst gives a project meaning and direction. It is necessary to know what the problem is before it can be solved. This leads to a preliminary survey or an initial investigation to determine whether an alternative system can solve the problem. Depending on the results of the initial investigation, the survey is expanded to a more detailed feasibility study. A feasibility study is a test of a system proposal according to its workability, impact on the organization, ability to meet user needs, and effective use of resources. It focuses on three major questions such as what are the user’s demonstrable needs and how does a candidate system meet them, what resources are available for given candidate systems, whether the problem is worth solving, what could be the likely impact of the candidate system on the organization and how well it is within the organization’s master MIS plan. Each of these questions must be answered carefully because they revolve around investigation and evaluation of the problem, identification and description of candidate systems, specification or performance and the cost of each system and final selection of the best system. The objective of feasibility study is to acquire...
Words: 1155 - Pages: 5
