disclosures of financial statements to deceive financial statement users, particularly investors and creditors. In other words, these fraudulent activities take place when a business entity engages in certain practices designed to hide or maneuver its accounts in order to remain attractive to investors. Theoretically, there are three factors that appear to be present in every case of financial statement fraud. These factors are an apparent situational pressure, a perceived opportunity to commit and
Words: 878 - Pages: 4
AVOIDING INVESTMENTS IN FRAUDULENT COMPANIES: THE WORLDCOM FRAUD Introduction The purpose of this report is to investigate and discuss the accounting fraud that occurred at WorldCom in order to recommend improved strategies to Berkshire Hathaway’s management for avoiding investments in companies with fraudulent financials. Accounting fraud is a crime committed by high level employees at an organization to manipulate the organization’s financial statements and intentionally disguise company
Words: 3453 - Pages: 14
all the laws of the land, accountability and responsibility towards the stakeholders and commitment to conducting business in an ethical manner. Another point which is highlighted in the SEBI report on corporate governance is the need for those in control to be able to distinguish between what are personal and corporate funds while managing a company. Fundamentally, there is a level of confidence that is associated with a company that is known to have good corporate governance. The presence of an
Words: 3550 - Pages: 15
4.1 Audit objective relating to database access is verify that database access authority and privileges are granted to users in accordance with their legitimate needs. Audit procedures for testing data access controls are: Responsibility for authority tables and subschemas. The auditor should verify that database administration personnel retain exclusive responsibility for creating authority tables and designing user views. Evidence may come from three sources: (1) by reviewing company policy and
Words: 1785 - Pages: 8
Q1: Discuss how the SEC has influence (if any) over the audit of Smackey Dog Foods, Inc. The Securities and Exchange Commission assists in providing investors with reliable information upon which to make investment decision. The SEC has considerable influence in setting generally accepted accounting principles and disclosure requirement for financial statements as a result of its authority for specifying reporting requirements considered necessary for fair disclosure to investors. The SEC has
Words: 1802 - Pages: 8
1. | Internal controls are concerned with | A) | only manual systems of accounting. | B) | the extent of government regulations. | C) | safeguarding assets. | D) | preparing income tax returns. | 2. | Control over cash disbursements is generally more effective when | A) | all bills are paid in cash. | B) | disbursements are made by the accounts payable subsidiary clerk. | C) | payments are made by check. | D) | all purchases are made on credit. | 3. | Which of the following
Words: 422 - Pages: 2
transmits, processes, maintains, or accesses significant information electronically, some accounting data and source documents may be available only in electronic form, or only at a certain point in time. The auditor would generally perform tests of controls several times during
Words: 11286 - Pages: 46
Evaluating Internal Controls Internal Controls can be easily evaluated by making use of a comprehensive questionnaire containing all pertinent components of the internal control system in place within the company or business unit. The idea of the internal control questionnaires is to provide auditors with wealthy information in regards to the controls in place and possible risky areas. “Internal control questionnaires are designed to help the audit team obtain evidence about the control environment
Words: 866 - Pages: 4
audits of the 19th century. Answer: True Difficulty: Medium 2. The American Institute of Certified Public Accountants issues CPA certificates and permits CPAs to practice. Answer: False Difficulty: Medium 3. A company is either audited by the GAO or internal auditors, but not both. Answer: False Difficulty: Easy 4. The SEC does not pass on the merits of the securities that are registered with the agency. Answer: True Difficulty: Medium 5. The American Institute of Certified Public Accountants has the
Words: 2367 - Pages: 10
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………………………………………………………
Words: 3585 - Pages: 15
