Premium Essay

The Auditor Book Summary

In:

Submitted By txbaseball11
Words 3241
Pages 13
The Auditor, an instructional novella written by James K. Loebbecke, tells the story of Jack Butler, a man from the San Francisco Bay area, who goes to college, majors in accounting, and goes to work for a large accounting firm referred to as “The Firm.” The story is loosely based upon the real world experiences of the author, and is written to give students a look into the world of public accounting that goes beyond a textbook. The Auditor not only gives students a chance to follow Jack Butler’s journey up the company ladder at The Firm, but also reiterates the relative importance of conventional lessons learned in school. The story begins with a nerve filled morning for Jack Butler. He is one of three managers who are being considered for partnership, and today is “the big day.” The fact that Jack, an experienced auditor at this time, is filled with anxiety on this day shows how special it is to be considered as a candidate for partnership in a firm. It also depicts the level of competition a student can expect to experience at a firm in the future. In the story, Jack states that the other two managers up for the partnership are very close friends, and he worries that their relationships might be affected if he gets the position. Jack receives the promotion, along with one of the other two managers, Barbara Gillespsie. Jack is excited for the promotion, but quickly realizes the additional responsibility that comes with being a partner in the firm. This first experience for Jack shows students that while more money does come with promotions, there is also a greater level of responsibility associated with higher positions in firms. Jack also describes his boss in the first chapter. His name is Quentin Barnes, and he is referred to around the office as “Bear.” Jack makes it known that Bear is great at what he does and speaks of his relationship with Bear, which

Similar Documents

Premium Essay

Vouching

...A voucher is documentary evidence in support of a transaction in the books of account. Vouching is a technical term which refers to the inspection by the auditor of documentary evidence supporting and substantiating a transaction. It means to substantiate an entry in the books of account not only with any documentary evidence such as agreements, receipts, counter foils of a receipt book, or pay-in-book, contracts, but also to see that the transaction has been properly authorized, recorded and entered in the books of account e.g. verification of the entries in the invoice book with the invoices, checking of the cash receipts with counter foils of the receipt books, the checking of the cash payments with the receipts issued by the payee an so on. Vouching is testing the truth of items appearing in the books of original entry. Clever frauds can only be discovered by proper vouching as for example if the auditor simply compares the entry on the credit side of the cash book with the voucher, he might be deceived as in a case where the purchase was not for the business or the receipt might have been for the previous year. In the case o receipt side of the cash book it is possible that a less amount might have been entered on the counter foil than the money actually received. It is through vouching that an auditor can satisfy himself as to the authenticity and completeness of transactions in the books of accounts. In case he is negligent he will be held guilty. Vouching...

Words: 6388 - Pages: 26

Premium Essay

Auditing Process

...Complete overview of an Audit Executive summary A financial audit refers to the verification of the financial statements of a company by an audit firm in order to express a professional opinion regarding their credibility. This process begins when a client approaches the auditor if deemed reputable the auditor accepts he begins by planning how to carry out the audit. This is done by assessing several factors such as risk, materiality etc. and then obtaining feedback in order to draw up the audit plan. At this point an audit team is assembled based on the audit strategy who visit the clients premise to carry out the procedures agreed upon in the planning stage through practical work or field work. Once enough evidence is accumulated to support the auditor’s opinion a draft audit report is drawn up. The client is contacted after this and feedback is obtained to make final necessary adjustments. Once finished the final audit report is issued which expresses the auditors professional opinion and recommendations, depending on the issues at hand a follow-up review may be carried out afterwards to see clients progress in adopting the suggested changes thus concluding the audit process. Table of Contents Particulars | Page # | Introduction | 3 | Stage 1: Planning | 3 | Step 1: Notification/Engagement Letter | 4 | Step 2: Audit Strategy | 4 | Step 3: Initial Meeting | 4 | Step 4: Planning Analytical Procedures | 5 | Step 5: Risk, Materiality and Control assessment...

Words: 3488 - Pages: 14

Premium Essay

Auditing and Answer

... I am deeply grateful to him, that he constructs this course to render exposure of Auditing as well as the basic functioning of such. The course builds on the capacity developed in the principle of accounting practice basic concepts and apply them in real case situations. This will help me a lot, in accounting and auditing discipline and auditors decision making process in the real world. I am sincerely thanked to him, that he gives us this case as an assignment, which will help us in future. Because of, this case is based on the practical experience from ‘real world’ situation that is applicable to all business organization. It is making us familiar with real experience. We now know what kind of fraud is taking place in organization, how we can prevent them, how we improve breakdowns, what kind of process should an auditor follows to discover fraud, all of this will help us further carrier as an auditor Dhaka April 2011. Neaz Executive Summary An audit is an examination of a company’s financial statements prepared by the directors of the company. Its purpose is to give the company’s owners an independent, professional and informed opinion stating. Assurance services are a class of services provided by certified public accountants (CPAs) in public practice. While the term is sometimes...

Words: 6869 - Pages: 28

Premium Essay

The Effects of Longterm Auditor-Client Relationship on Audit Quality

...THE EFFECTS OF LONG-TERM AUDITOR - CLIENT RELATIONSHIP ON AUDIT QUALITY IN SMEs INTRODUCTION 1.1 BACKGROUND TO THE STUDY Small and medium-sized enterprises (SMEs) play a vital role in the economy of any country, and the impact of their growth is experienced positively across the overall economy. As stated by the European Commission report, Small and Medium-sized Entities (SMEs) represent 99% of all the entities operating in Europe, and have been important for both the social and economic developments in Europe. In Europe, micro-enterprises within the SMEs are considered to be the real giants of European economy, and are the ones with fewer than 10 employees. As per the stats of Eurostat, 67% of the privatesector jobs in Europe are created by SMEs, which represents a major share in the overall economy of a country (European Commission, 2008). Most SMEs encounter limited financial as well as non-financial resources. They depend upon the creditors like banks and other financial institutions, or private equity. In this regard, banks have become one of the major sources for SMEs fulfilling their financial requirements. However, banks are less likely to provide loans without any reasonable assurance of creditability of the firms. Banks generally rely on the financial information of the firms. They do prefer credible audited financial statements by independent auditors as a matter of assurance. In other words, most banks view auditing as a guarantee for the quality of information...

Words: 2429 - Pages: 10

Premium Essay

The Impact of Ict on Accounting Practice in Nigeria

...The impact of ICT on accounting practice in Nigeria CHAPTER ONE Introduction 1.1    Background of the study             In the recent past centuries, before the inception of Information and Communications Technology (ICT), the accountants of an organization were using a socially acceptable behavioural method of reporting accounting and economic reports, carried out during accounting year ends, the preparation of accounting records, book such as the profit and loss account, the balance sheet, cash book, cash flow statement, income and expenditure accounts.             The application of Information and Communication Technology (ICT), on accounting practice in Nigeria has become a subject of fundamental importance and concerns to all business enterprise and indeed a prerequisite for local and international competitiveness. It is obvious that the way accountants plan and take decision on what and how to provide their service in the accounting profession has been affected immensely by Information and Communication Technology (ICT). This has continued to change the manner in which accounting practice and their corporate relationships are organized worldwide and the variety of innovative device available to improve and facilitate the speed and quality service delivery.             It is obvious that the biggest impact of Information and Communication Technology (ICT) has been made on accounting; and it is the ability of companies to develop and use computerized system to...

Words: 4194 - Pages: 17

Premium Essay

Worldcom

...WorldCom: The Scandal that Shocked the Nation By: Eric Dixon FSAAC_624_OL2 November 23, 2011 Professor Stephen Oliner Table of Contents Executive Summary…………………………………………………………Page 2 Corporate Environment……………………………………………………...Page 4 Types of Fraud Committed.…………………………………………………Page 5 Board of Directors Responsibility…………………………………………...Page 6 Internal Auditors Responsibility…………………………………………….Page 7 Conflicts of Interest………………………………………………………….Page 7 Collusion…………………………………………………………………….Page 8 Complicity of Auditors and Investment bankers …………………………...Page 9 Sarbanes Oxley-Act……………………………………………………….....Page 9 Recommendations……………………………………………………………Page 10 Re-establishing WorldCom………………………………………………….Page 11 Glossary………………………………………………………………...……Page 12 Appendix…………………………………………………………………….Page 13 Web Site Resource Summary……………………………………………......Page 14 Executive Summary In the late 1990’s WorldCom was regarded as one of the largest long distance phone companies. WorldCom stormed and dominated the telecommunication industry by completing sixty-five significant mergers and acquisitions. These mergers put WorldCom in debt of $41 billion dollars, which the Board of Directors was unaware of. By obtaining these companies WorldCom made themselves a favorite on Wall Street and to numerous investment bankers. Management didn’t know the complications that would arise when trying to integrate several different billing systems. Chief Executive Officer Mr. Ebbers kept...

Words: 3585 - Pages: 15

Premium Essay

Jamilo

...The impact of ICT on accounting practice in Nigeria CHAPTER ONE Introduction 1.1 Background of the study In the recent past centuries, before the inception of Information and Communications Technology (ICT), the accountants of an organization were using a socially acceptable behavioural method of reporting accounting and economic reports, carried out during accounting year ends, the preparation of accounting records, book such as the profit and loss account, the balance sheet, cash book, cash flow statement, income and expenditure accounts. The application of Information and Communication Technology (ICT), on accounting practice in Nigeria has become a subject of fundamental importance and concerns to all business enterprise and indeed a prerequisite for local and international competitiveness. It is obvious that the way accountants plan and take decision on what and how to provide their service in the accounting profession has been affected immensely by Information and Communication Technology (ICT). This has continued to change the manner in which accounting practice and their corporate relationships are organized worldwide and the variety of innovative device available to improve and facilitate the speed and quality service delivery. It is obvious that the biggest impact of Information and Communication Technology (ICT) has been made on accounting; and it is the ability of companies to develop and use computerized system to...

Words: 4194 - Pages: 17

Premium Essay

Paps- 1003ph

...Accompany the Agreed-Upon Procedures Report……………………………………. 24-25 Effective Date……………………………………………………………….. 26 Appendix 1: Required SEC Procedures Relating to an Application for Increase in Authorized Capital Stock as Contained in SEC Memorandum Circular No. 6, Series of 2008 Appendix 2: Example Auditor’s Reports on Agreed-Upon Procedures Engagements Appendix 3: Illustrative Auditor’s Representation Letters 2 PAPS 1003Ph Philippine Auditing Practice Statements (PAPS or Statements) are issued by the Auditing Standards and Assurance Council (AASC) to provide practical assistance to auditors in implementing the Philippine Standards on Auditing (PSAs) or to promote good practice. Statements do not have the authority of PSAs. This Statement does not establish any new basic principles or essential procedures; its purpose is to assist auditors, and to develop good practice, by providing guidance on the application of the PSAs...

Words: 6575 - Pages: 27

Premium Essay

The Auditor Summary

...The Auditor Book Summary The Auditor, an instructional novella written by James K. Loebbecke, tells a story about a man named Jack Butler, who is from San Francisco Bay area, goes to college, majors in accounting, and goes to work for a large accounting firm referred to as “The Firm.” The auditor is based on real world experiences of the author that lets students follow Jack Butler’s journey up the company’s ladders at The Firm, which gives students a better understand of the auditing profession. The story begins with Jack Bulter getting a promotion to become a partner in the firm in which he has been working for over 10 years. We are later introduced to his colleagues Dan Pamell and Barbara Gillespie who were in the same situation as Jack to whether they were going to be chosen as a future partner. In the end Barbara Gillespie gets the promotional, worrying Jack that his relationship with Dan Pamell be affected with not obtaining the position. At the end of the book Don, Jack’s friend, was offered to get a partnership position in the Oakland branch but he declined it. As the story progresses, we follow Jack through the struggles and achievements that lead him into becoming a partner as well as maintaining a life outside the office. As the story progresses, Jack Bulter explained how he was going to purse a law degree to become a lawyer like his father who we learn is a partner in Messner, Smith and Bolther in San Francisco. After taking some accounting classes and making...

Words: 824 - Pages: 4

Premium Essay

Sox Effects on Corporate Fraud

...Government Regulations Introduce three governmental regulations that have assisted in the checks and balances of government trading. A. Introduce the three government regulations covering the Securities Acts of 1933 and 1934, The Foreign Corrupt Practices of Act of 1977 and finally Sarbanes-Oxley Act. B. Origin of Securities Acts of 1933 and 1933 (Beatty, Samuelson & Bredeson, 2013) C. Genesis of the enactment of The Foreign Corrupt Practices of 1977. D. Origin of Sarbanes-Oxley Act and its enactment (retrieving information from: https: www.soxlaw.com/introduction.htm) 11. Securities Acts of 1933 and 1934 A. Registration requirement includes the statement and prospectus B. Annual, Quarterly reports and Form 8-k C. Inside Trading D. Private Offerings E. Blue Sky Laws F. Antitrust (The Sherman Act, The Clayton Act, and The Robinson-Patman Act) 111. The Foreign Corrupt Practices Act (FCPA) of 1977 makes it illegal for an American businessperson to give anything of value to any foreign official in order to influence an official decision. A. Applicability of the Act B. Prohibitions under the Act C. Penalties for Violations of the Act 1. Criminal 2. Civil 3. others D. Defense under FCPA 1. Lawful payment 2. Bona fide expenditures E. Fraud/Scandal of the FCPA of 1977 1. Detection method 2. Importance of Early Detection 3. Big problems for small corporations/organizations 4. Types of fraud and who is involved 1V. Sarbanes Oxley Act A. The effects of...

Words: 3193 - Pages: 13

Premium Essay

Paper

...mainly the directors of husband and wife who were involved in the management of the company. The company involved in trading and engineering service3s. The company has limited financial resources. Based on the audit finding the records were not properly kept and no procedures and financial system were in place and lacked internal control. The auditors were not able to express a true & fair view on the accounts and recommended to qualify the audited accounts. Introduction It was July, 2006 when En Zayed engaged the external auditor Aziz & Co ( a Chartered Accountant), introduced by his friend to perform the statutory audit for the period of 2003 to 2006. This was the first audit experience for En. Zayed and Puan Hashimah and was a difficult learning experience faced by both. The Auditors expressed their intention to qualify the financial statements of the business due to several unresolved issues. However, En. Zayed and Puan Hashimah negotiated with the Auditor to not doing so. Failing to this negotiation, En Zayed and Puan Hashimah planned to terminate Aziz & Co appointment and to replace (appoint) with their new “friendly party” auditor. Interestingly, En Zayed and Puan Hashimah were not familiar with the Accounting Standards, provisions of the Companies Act 1965 and the roles and duties as Company Directors. Besides, the company maintained a very lean organization and had employed family members as their employees and a majority is without a necessary qualification and job...

Words: 2236 - Pages: 9

Premium Essay

Stdy

...mainly the directors of husband and wife who were involved in the management of the company. The company involved in trading and engineering service3s. The company has limited financial resources. Based on the audit finding the records were not properly kept and no procedures and financial system were in place and lacked internal control. The auditors were not able to express a true & fair view on the accounts and recommended to qualify the audited accounts. Introduction It was July, 2006 when En Zayed engaged the external auditor Aziz & Co ( a Chartered Accountant), introduced by his friend to perform the statutory audit for the period of 2003 to 2006. This was the first audit experience for En. Zayed and Puan Hashimah and was a difficult learning experience faced by both. The Auditors expressed their intention to qualify the financial statements of the business due to several unresolved issues. However, En. Zayed and Puan Hashimah negotiated with the Auditor to not doing so. Failing to this negotiation, En Zayed and Puan Hashimah planned to terminate Aziz & Co appointment and to replace (appoint) with their new “friendly party” auditor. Interestingly, En Zayed and Puan Hashimah were not familiar with the Accounting Standards, provisions of the Companies Act 1965 and the roles and duties as Company Directors. Besides, the company maintained a very lean organization and had employed family members as their employees and a majority is without a necessary qualification and job...

Words: 2249 - Pages: 9

Premium Essay

Healthsouth- Summary

...Corporation: Fraud, Greed and Corporate Governance Case Summary During the 1990s, Richard M. Scrushy, the former CEO of HealthSouth Corporation, engineered many acquisitions of rehabilitation clinics, outpatient surgical care operators, nursing homes and other health care companies. Mr. Scrushy had been a respiratory therapist who spotted a niche in the health care market and utilized his entrepreneurial talents, marketing skills, and super salesmanship to set up and run what became the third largest publicly held company in Alabama. Eventually, HealthSouth became the largest provider of ambulatory surgery and rehabilitative health care services in the United States with 1,700 facilities and 51,000 employees. In 2003, the Securities and Exchange Commission (SEC) accused the company and Mr. Scrushy of inflating earnings to the tune of $1.4 billion since 1999. In November 2003, a federal grand jury indicted Mr. Scrushy on 85 counts including conspiracy, securities fraud, money laundering and charges related to overstating HealthSouth’s earnings by nearly $3.0 billion. According to federal investigators, the company overstated earnings to meet analysts’ earning estimates, while hiding the accounting fraud from the auditors. However, questions were raised whether the auditors failed to find or simply overlooked the fraud at HealthSouth. Central to the investigation was the issue of what role Mr. Scrushy played in “cooking the books.” However, as the case unfolded, it highlighted many...

Words: 362 - Pages: 2

Premium Essay

Adelphia Corporatopn

...ACCT632-04 MS Business Analysis Using Financial Statements Spring 2016 Individual Project Name: Shenqian Duan Date: April 3 2016 Adelphia Communication Corporation Executive Summary: Adelphia Communications Corporation was founded in 1952 with a $300 license by John Rigas,-(Founder), Willaim T. Schleyer (Chairman and CEO), Ronald Cooper (President and COO) and Vanessa Wittman (EVP and CFO) in the town of Coudersport with its main headquarters at Greenwood Village, Colorado. The company is to Cable Television and Internet Services Provider with 275 employees. Their slogan says that “Get. Watch. Do What you want.” Adelphia backed $2.3 billion worth of personal loans to the Rigases. Rigas Management commingled Adelphia funds with family funds causing Adelphia to fund non-corporate projects, such as personal loans, real estate transactions (Purchase of Manhattan apartments for private use and Purchase of land for a private golf course), cash advances to the Buffalo Sabres, and $252 million to pay margin calls, or demands for cash payments on loans for which the family had put up Adelphia stock as collateral. The Rigases used Adelphia’s line of credit for personal purchases. The Rigases doctored financial records at Adelphia and created sham transactions and phony companies to inflate the firm's earnings and to conceal is mounting debts. Upon realizing the extent of funds taken, Tim Rigas “limited”...

Words: 1490 - Pages: 6

Premium Essay

Paps 1001

...Introduction…………………………………………………………………. BIR Requirements for Filing of Audited Financial Statements…………….. Incomplete or Unaudited Financial Statements……………………………. Responsibility over Financial Statements………………………………….. Handling of Incomplete or Unaudited Financial Statements………………. Other Considerations……………………………………………………….. Effective Date………………………………………………………………. 1-3 4-5 6-8 9-11 12-18 19 20 Philippine Auditing Practice Statements (PAPS or Statements) are issued by the Auditing Standards and Assurance Council (AASC) to provide practical assistance to auditors in implementing the Philippine Standards on Auditing (PSAs) or to promote good practice. Statements do not have the authority of PSAs. This Statement does not establish any new basic principles or essential procedures; its purpose is to assist auditors, and to develop good practice, by providing guidance on the application of the PSAs when conducting an audit of financial statements. The auditor exercises professional judgment to determine the extent to which any of the audit procedures described in this Statement may be appropriate in the light of the requirements of the PSAs and the entity’s particular circumstances. -2- PAPS 1001Ph The Public Sector Perspective (PSP) is set out at the end of PAPS. Where no PSP is added, the PAPS is applicable in all material respects to the public sector. This particular PAPS issued by the Auditing and Assurance Standards Council is not based on a specific International Auditing Practice...

Words: 2583 - Pages: 11