...value of an audit to investors is critical because it allows them to assess performance, which in turn allows them to vote on organizational matters such as a board of directors. It also helps them make decisions on whether or not to buy or sell stock. As for creditors, an audit report serves a basis for realizing performance. With this they are able to make loan decisions and analyze risk. As far as the community as a whole, an audit reports shows true performance and therefore helps others understand its ability for future growth. With that being said, people have a chance to make investment decisions for the future. B. An audit of internal control is vital for the investing public because it assures them that there is no corruption and that their money is safer. Before 2002 auditors weren’t required to test internal controls, which lead to huge controversy over the collapse of several big time companies. Now, auditors serve somewhat as investigators to make sure internal controls are correctly doing their job. It is also management’s responsibility to assess and report the quality of its internal controls over financial reporting. C. An audit committee is responsible for hiring and firing an audit firm. The audit committee is established by a company as an independent subcommittee under the board of directors to provide oversight for audit functions. Because this committee is independent, it reduces any possible risk of bias when they elect the external audit. 1-40 A...
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...also discusses who would use these types of services as well as the reason behind doing so. Finally, the team will provide some research about what standards apply to each service and what organization establishes them. Auditing Auditing is “a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating the results to interested users” (Boynton & Johnson, 2006, p. 6). An example of auditing is auditing a company’s financial statements. “ A financial statement audit involves obtaining and evaluating evidence about an entity’s presentation of its financial position, results of operations, and cash flows for the purpose of expressing an opinion on whether they are presented fairly in conformity with established criteria—usually generally accepted accounting principles (GAAP)” (Boynton & Johnson, 2006, p. 8). Security Exchange Commission (SEC) demands every public company to be audited annually. Local, state, and federal governments are also required to be audited....
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...Multiple Choices: 1. Corporate Governance is________. a) About ethical conduct in business b) Direct or indirect concerns in the organization c) A manufacturing system d) None of the above 2. The term corporate governance is derived from the__________. a) Greek word b) English word c) French word d) Latin word 3. The definition “Corporate Governance is the system by which business directed and controlled” is given by a) SEBI committee b) OECD committee c) Cadbury committee d) All of the above 4. Internal control is implemented by the________. a) Board of directors b) Audit committee c) Management d) All of the above 5. OECD stands for_______________ 6. Which of the following have the power to hire fire and compensate the top management? a) Board of directors b) Audit committee c) Shareholders d) Management 7. CII stands for _________________ Examination Paper of Certified Corporate Governance Professional 2 IIBM Institute of Business Management 8. The managers are expected to act in the interest of: a) Audit committee b) Stakeholders c) Employees d) Customers 9. To endorse the organization strategy, develop directional policy, appoint, supervise and remunerate senior executives and to ensure accountability of the organization to its owners and authorities is the responsibility of: a) CEO b) Manager c) Top management d) Board of directors 10. SEBI stands for_________________ 11. The role of corporate governance is_______ a) To ensure the...
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...Enron was a well established company registered in the United States of America which was ranked 7th in the Fortune 500 magazine and arguably the most innovative company in the United States. Hanson (2002), as quoted by Nakayama (2002) argues that the Enron scandal is the most significant corporate collapse and it demonstrated the need for significant reforms in accounting and corporate governance, as well as a close look at the ethical quality of the culture of business generally. There are many causes of the Enron collapse. Among them are the conflict of interest between the two roles played by Arthur Andersen, as auditor but also as consultant to Enron; the lack of attention shown by members of the Enron board of directors to the off-books financial entities with which Enron did business; and the lack of truthfulness by management about the health of the company and its business operations. In some ways, the culture of Enron was the primary cause of its failure. Zimbabwean companies can draw a number of lessons from the Enron scandal. The lessons learnt from the Enron scandal have been one of the bases for the development of more robust corporate governance recommendations and legislation in some countries, for example the Sabanese-Oxley Act in the United States. According to Nowroozi (2002), the failures and lessons associated therewith can be classified as follows: Fudiciary failure Enron’s board clearly failed in its fudiciary duties to safeguard the shareholders’ interest...
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...corporate scandals and misappropriation of finances, the United States government has developed many laws and action agencies to aid in reducing the amount of corporate mishandlings. Regulatory legislation mandating a report on internal controls is now a corporate obligation. Risk management is a fundamental area of importance to stakeholders. Organizations that are best practice companies look to the Committee of Sponsoring Organizations for guidance to develop efficient internal controls, enterprise risk and against fraudulent activities. This paper will outline a plan to implement enterprise risk for an organization of choice. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) “is dedicated to guiding executive management and governance entities toward the establishment of effective, efficient, and ethical business operations on a global basis. It sponsors and disseminates frameworks and guidance based on in-depth research, analysis, and best practices” (COSO, 2006). COSO is a private-sector program funded and sponsored by five professional organizations. The Committee conducted an 11-year research study to analyze instances of fraudulent financial reporting and determine contributing factors that lead to financial statement fraud (COSO, 2006). COSO’s research demonstrated that most fraudulent behavior involved the chief executive officer (CEO) and chief financial officer (CFO). In 83% of the cases, that COSO evaluated, either the CEO, CFO,...
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...S. Security and Exchange Commission (SEC) is a federal agency which holds primary responsibility for enforcing the federal securities laws and regulating the security market in the United States. SEC was established in 1934 as an independent, quasi-judicial regulatory agency after the massive market crash in 1929. “The mission of U.S. Security and Exchange Commission is to protect investors, maintain fair, orderly and efficient markets and facilitate capital formation” (SEC. The Investor’s Advocate: How the SEC Protects Investors, Maintains Market Integrity, and Facilitates Capital Formation. From http://www.sec.gov/about/whatwedo.shtml#create). Currently, SEC is responsible for administering Securities Act of 1933 and 1934, The Trust Indenture Act of 1939, The Investment Company Act of 1940, The Investment Advisors Act of 1940, The Sarbanes-Oxley Act of 2002 and Credit Rating Agency Reform Act of 2006. Congress has allowed SEC to bring civil enforcement actions against individual or companies in violation of securities law. It is the primary body to regulate public companies and their activities in United States. SEC has enacted various rules, regulations and releases to pursue its objective of investor protection mission. Out of numerous provisions, section 10(A) –Audit Requirement is fundamental one. “In 1995, with little fanfare, the SEC added a powerful new weapon to its enforcement arsenal, specifically directed at independent auditors ... Section 10A of the Securities...
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...With the complexity of accounting today there is a need for someone to oversee the auditors and the publicly help companies. The auditors must prove their independence when attesting to the financial statements of publicly held companies. The public companies must be honest and open when they file their financial statements. In recent years there have been auditors who were bias towards some companies and also companies have not been disclosing all the facts about their financial position. These problems are the reasons why there is a need for an overseeing, unbiased board of professionals. The board can help stop most of the problems with auditing and filing of financial statements. The board can do so by establishing and enforcing rules and standards for public companies and auditors. The two recent boards that have attempted to solve the problems are the Independence Standards Board and the Public Company Accounting Oversight Board. The Independence Standards Board was established in May of 1997 as a result of discussions between the American Institute of Certified Public Accountants and the U.S. Securities and Exchange Commission. The biggest issue was the integrity of the financial statements of public companies. In order to have confidence and credibility of the financial statements the auditors must be independent of the public companies. “The operating policies of the Independence Standards Board are designed to permit timely, thorough, and open study of issue involving...
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...Nguyen_____________________________________ Telling the Enron Story Name five ethical problems and the existing conditions that caused the Enron fiasco. Explain each. 1. Fiduciary Failure – the board of directors failed to safeguard the companies from many inappropriate practices. 2. High Risk Accounting – Enron allowed high risk accounting in that the partnerships with Chewco and LJM1 and LJM2 did not conform with accounting rules 3. Enron had extensive undisclosed off-the-books activity. There were billions of dollars in off-the-book assets and liabilities. 4. Excessive Compensation – There was a cash drain caused by the 2000 annual bonus and performance unit plan. 5. Lack of Independence – There were financial ties between Enron and board members. Arthur Anderson provided internal auditing services as well as consulting services. Accounting 1370 Accounting Ethics Session 6 Governance, Accounting, and Auditing, Post-Enron Group 1: Student Name__Carol Cates_____________________________________ Student Name__Brenda Bohm____________________________________ Telling the Enron Story Name five ethical problems and the existing conditions that caused the Enron fiasco. Explain each. 1. At Enron, a lack of integrity was built into the foundation of the company from the top to the bottom. The floor traders were heavily involved in the California rolling blackouts and the management team was involved in numerous, non-GAAP accounting practices. No internal controls existed...
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...by Name Nahid Rijwan Roll 3-09-17-033 CONTENTS Topic CHAPTER – 1 About British American Tobacco Bangladesh Business Principles of BAT, Bangladesh Standards of Business Conduct of BAT, Bangladesh: CHAPTER – 2 Corporate Governance Statement Board of Directors of BAT Bangladesh and Their Roles Relationship with Shareholders Accountability and Audit Compliance with Legal Requirements Employees Standards of Business Conduct CHAPTER -3 Corporate Social Responsibility Statement Probaho Socially Responsible Tobacco Production (SRTP) Deepto Afforestation CHAPTER - 4 Auditor’s Report to The Shareholders 16 12 12 13 14 15 6 7 9 10 10 10 11 1 2 3 Page CHAPTER - 5 Comparative Analysis of Bat Bangladesh’s Corporate Governance Compliance Status of compliance with the Provisions Denoted in the Code of Corporate Governance for Bangladesh, March 2004 Status of compliance with the Conditions Imposed by the Securities & Exchange Commission's Notification 21 19 18 REFERENCES 23 ANNEXURE - I 24 CHAPTER – 1 About British American Tobacco Bangladesh: British American Tobacco Bangladesh is one of the largest multinational companies in the country and has been operating for over 100 years. There are over 1,000 employees and take pride in being one of the preferred employers in Bangladesh. Responsibility to the shareholders, employees, business partners, customers and any other...
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...claim, usage of coding guidelines, payer specific issues, and any additional gray areas that may arise in the coding function. Education and training processes must also be outlined in a HIM compliance plan. This would need to identify the number of mandatory CEU’s for each employee, new hire training guidance and requirements, as well as physician and clinical staff educational guidelines and processes. The HIM/Coding compliance plan should also include policies and procedures that address communication, the auditing/monitoring process, any necessary corrective action steps and finally the process for reporting the coding compliance steps that have been followed and any areas identified as risks or any findings of noncompliance. 2. The HIM director will be responsible for creating and maintaining the coding compliance plan by performing periodic reviews of all policies and procedures to ensure that all aspects of compliance are covered with the currents P&P’s. All policies and procedures will also be reviewed by the Ethics and Compliance Committee. The coding supervisor will be responsible for conducting all coding reviews and...
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...of the document.] | In the case of Koss Corporation vs. Sachdeva and Grant Thornton, Koss Corporation, the plaintiff, alleges Sacheva, its former Vice President of Finance, committed fraud and embezzlement of company assets and Grant Thornton failed to properly conduct its audits and failed to disclose numerous accounting irregularities at Koss. Plaintiff Koss is a publicly traded company listed on the NASDAQ with its principal place of business in Milwaukee and Wisconsin. Currently, Koss mainly designs, manufactures and markets high-fidelity headphone products all over the world. Defendant SujataSachdeva was employed as former Vice President of Finance and was responsible for the day-to day operation of the company’s accounting department and accounting operations. As an officer of the company, Sachdeva was entrusted with numerous important fiduciary duties. However, she took advantage of her position to embezzle Koss’s assets of over thirty million dollars to cover her personal expense. Defendant Grand Thornton is one of the largest accounting firms in the United States. It was hired to serve as an independent auditor for Koss during fiscal year 2004 through 2008. However, Grand Thornton was sued into court because it failed in its fiduciary role by issuing false audit opinions during this period. The negligence, carelessness and reckless auditing behavior caused that the scheme of Sachdeva wasn’t uncovered for a long time. Before March, 2004, PWC played the role of main auditor...
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...created a new private sector, nonprofit corporation-the Public Company Accounting Oversight Board (PCAOB)-to oversee the financial reporting of public companies. Among other changes, SOX's sweeping reforms required that a company strengthen auditor independence; have its chief executives sign off on the financial statements; obtain an opinion about its internal control systems; and have an internal audit function that is examined by external auditors” (Grumet, 2007). Part A Audit Committees The Sarbanes-Oxley Act affects audit committees of public company boards of directors. The committee of the board of directors is directly responsible for the public company financial statements, in addition to the appointment, compensation, and oversight of the work of any registered public accounting firm employed by that issuer. In the case of misunderstanding between management team and the auditor’s regarding financial reporting, it is the audit committee’s responsibility to get everyone involved on the same page. In addition, the audit committees need to monitor all financial information communicated to the public to ensure that investors are not receiving misleading information. The Sarbanes-Oxley Act requires that the audit committee meet separately in private with the management team, internal and external auditors to verify their financial reporting. The audit committee responsible for selecting and replacing auditors and pre-approving audit and non-audit fees services...
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...New South Wales Auditor-General’s Report | Performance Audit | WestConnex: Assurance to the Government Professional people with purpose Making the people of New South Wales proud of the work we do. Level 15, 1 Margaret Street Sydney NSW 2000 Australia t +61 2 9275 7100 f +61 2 9275 7200 e mail@audit.nsw.gov.au office hours 8.30 am–5.00 pm 247 audit.nsw.gov.au New South Wales Auditor-General’s Report Performance Audit WestConnex: Assurance to the Government Roads and Maritime Services WestConnex Delivery Authority Infrastructure NSW Transport for NSW NSW Treasury Department of Premier and Cabinet The role of the Auditor-General GPO Box 12 Sydney NSW 2001 The roles and responsibilities of the AuditorGeneral, and hence the Audit Office, are set out in the Public Finance and Audit Act 1983. Our major responsibility is to conduct financial or ‘attest’ audits of State public sector agencies’ financial statements. We also audit the Total State Sector Accounts, a consolidation of all agencies’ accounts. Financial audits are designed to add credibility to financial statements, enhancing their value to end-users. Also, the existence of such audits provides a constant stimulus to agencies to ensure sound financial management. Following a financial audit the Audit Office issues a variety of reports to agencies and reports periodically to parliament. In combination these reports give opinions on the truth and fairness of financial statements...
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...change to federal securities law, but at the time, the costs were unknown. Today after nine years, companies have realized that the costs of this act are not be stopping the fraud as originally expected, and it is having some unintended consequences to the securities industry. The most important, and possibly the most costly parts of this act are corporate responsibility, increased internal controls, new auditing requirements, privatization of businesses, and the reaction to this act by foreign entities. Title I & II– Public Company Accounting Oversight Board and Auditor Independence The act established the Public Company Accounting Oversight Board (PCAOB), which was placed in charge of developing and enforcing professional standards, ethics, and competence of accounting professionals providing services to publicly traded companies. The PCAOB recently announced its budget for 2011 would be $204.4 million to perform these duties (Financial News, 2010). One of their guidelines is that public accounting firms that provide audit services to public companies can no longer provide any bookkeeping, consulting, actuarial, or investment services that may interfere with their objective findings in an audit, and to guarantee auditor independence the act provides for the mandatory rotation of lead auditor's. Title III– Corporate Responsibility The act also provides for an audit committee whose primary duty is to the Board of Directors and the investing public. Executive officers and directors...
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...bookkeeping services to a public company. The services were pre-approved by the audit committee of the company. Yes b. Providing internal audit services to a public company that is not an audit client. No c. Implementing a financial information system designed by management for a private company. No d. Recommending a tax shelter to a client that is publicly held. The services were pre-approved by the audit committee. No e. Providing internal audit services to a public company client with the pre-approval of the audit committee. Yes f. Providing bookkeeping services to an audit client that is a private company. No 4-21 a. Rule 101 - Independence. No violation. If the services performed conform to the requirements of Interpretation 101-3, independence of Emrich would not be considered to be impaired. There would be a violation of SEC rules if the client were publicly held. b. Rule 101 - Independence. No violation. Franz Marteens is not a partner nor is he assigned to the engagement team for the audit client. c. Rule 201 - General Standards. Violation. Interpretation 201-1 states that a member who accepts a professional engagement implies that he or she has the necessary competence to complete the engagement according to professional standards. Wilkenson has violated the rule since he does not have the expertise to review the work of the consultant hired by Wilkenson. Wilkenson should have suggested that the company hire the consultant directly...
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