running low. 3. Increase in short-term borrowing. 4. Poor internal control. a. Cold Gold outstanding account receivable for substantial period, as En.Selamat was best friend of Director of Cold Gold during college days, therefore being doubt that En.Selamat has benefited from the deal. (personal interest issue) b. Balance of account do not tie to the confirmation. Customer complaint that the statement of accounts sent to him were incorrect, Encik Munir didn’t disclosed the receipt
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the affects SOX has on public company Chief Operating Executive’s (CEO’s) and Chief Financial Executive’s (CFO’s), the impact SOX has on outside independent audit firms, and the improvement SOX section 404 has established on corporations’ internal financial controls. The final discussion will address whether SOX can guarantee the accuracy of public company financial statements. Main advantages and disadvantages associated with SOX There are several positive things that occurred after the passage
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calculations or recalculating the client’s calculations. • Computation produces highly reliable mathematical evidence. • Computation addresses existence and valuation for calculated amounts. Reperformance is applied in control testing, the auditor independently executes an internal control procedure. Observation: looking at the application of policy or procedures by others. (reliable evidence as to performance at the time of observation) PRODUCES A GENERAL AWARENESS OF EVENTS. Confirmation: consist
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Running Head: INTERNAL CONTROLS May 8, 2011 Manhattan Company Re: Audit of Internal Controls Dear Mr. Jerry Mays, This letter is to inform you of our findings of the conducted audit on your company’s internal control process. There are many great things your company does with its internal control processes, however there are several vulnerabilities that could pose a huge risk to your company’s assets
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* The likelihood that a material misstatement will occur * The characteristics of the class of transactions, account balance, or disclosure involved * The nature of the specific controls used by the entity, in particular, whether they are manual or automated * Whether the auditor expects to obtain audit evidence to determine if the entity’s controls are effective in preventing or detecting material misstatements. 2. Additional information needed to complete an assessment:
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“How Internal Controls can be used to prevent fraud” Jonathan Evans Dr. M. A. Turner ACC 455 Auditing 16 October 2011 Abstract This research paper will explain the use of internal control procedures as a way to prevent and or deter business related theft caused by employees. It will feature an introduction explaining what internal controls are, who is responsible for them, and detailing the five components that make up internal controls. Then there will be a number of examples showing
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Major Case Study Cendant Corporation 1 Briefly summarize the accounting techniques used by Cadent to manipulate financial results. Categorize each technique into one of Schilit’s financial shenanigans. Cendant used aggressive accounting to shift current marketing expenses to a later period by capitalizing the cost; this is shenanigan number 4. Cendant also swift future expenses to the current period and later released reserves into income. When Cendant made acquisition, it took large restricting
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governance of the company Importance of Corporate Governance Disclosures * Stakeholders are paying more attention to what is reported * The global financial crisis has sharpened the lens through which corporate governance structures are held to account and expectations around transparency. * To drive improvements in reputation * Public understanding of structure and activities * Relationships with the communities * Environmental issues Public disclosure is typically required, at
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component can be a financial statement account or a business (transaction) process. This approach allows the auditor to gather evidence by examining the processing of related transactions through the accounting system from their origin to their ultimate disposition in the accounting journals and ledgers. Thus, the auditor can examine an accounting transaction from the time it is initiated by the entity until its final recording in the financial statement accounts. 4-2 The financial statements contain
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line to reduce costs. Due to the importance of inventory control, we showed management how to take their current inventory data tables and construct pivot tables to improve decision making on inventory. Internal controls were reviewed on payroll, accounts payable, accounts receivable, and inventory processes to ensure the accuracy and validity of data. The review determined that if Kudler does not implement the recommended internal controls system suggested, the business could be under serious threats
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