economic nature of a transaction should determine how it is reported on a company’s accounting records, rather than its legal form (Donaldson, 1964). This concept aims to undercut certain transactions such as related party transactions that are solely to distort profitability, rather than a true economic transaction between two parties. The auditor is responsible for the review and testing of the client’s accounting records to see that the substance of their transactions are reflected in their records
Words: 832 - Pages: 4
American Accounting Association DOI: 10.2308/ciia-50775 INSTRUCTIONAL RESOURCE ABC Electronics: An Instructional Case Illustrating Auditors’ Use of Preliminary Analytical Procedures Paul M. Clikeman and Jamie Diaz SUMMARY: This instructional case demonstrates auditors’ use of analytical procedures during the planning/risk assessment phase of a financial statement audit. An Excel spreadsheet enables instructors to embed up to seven operating problems or potential accounting issues into
Words: 3683 - Pages: 15
Importance of finance & ethics- Pg. 233 Definition of Valuation- Pg. 234- A powerful tool in weighing options. The summarization of entire future scenarios into a single number that can help simplify complex decisions. Standards of accounting- Pg. 245 Strategies for stakeholders in regards to finance- Changing the reporting or classification for specific purpose/stakeholder. Making operational decisions based on their impact to financial statements. Manipulating revenue or expenses
Words: 404 - Pages: 2
accountant? The chief accountant is responsible for establishing and enforcing accounting and audit policies to ensure reporting is conducted accurately and fairly. The chief accountant also maintains the standards used for accounting to ensure transparency and accuracy. 2 – Financial Accounting Standards Board (source: BYP7-5 Kimmel textbook). The FASB is a U.S. private organization established to improve accounting standards and financial reporting. The FASB conducts extensive
Words: 649 - Pages: 3
their company look more profitable on paper. This allows them to value their company hire and receive more investments. How SOX Act affect ethical decisions Rules and guidelines have been put in place to deter people from making unethical decisions. There are a specific set of rules that the SOX Act applies to how business people shall perform auditing financial records of a public company. After Enron is states ‘An auditor is prohibited from “contemporaneously” providing a public company auditing
Words: 444 - Pages: 2
Antonio, USA ABSTRACT This case examines the two decade long tobashi scheme by Olympus Imaging Executives to hide $1.7 billion in losses. In the 1980s, a soaring yen and falling dollar caused bottom line income problems for many Japanese companies. Some companies sought to offset the declining revenue with zaiteku, a form of speculative investment. While early activities generated profits in 1987, by 1991 Olympus recorded 2.1 billion losses in yen. Rumors circulated that by the late 1990s, losses
Words: 5012 - Pages: 21
determine if the Sarbanes-Oxley Act of 2002 violates the Constitution’s separation of powers framework by assigning too much power to the Public Company Accounting Oversight Board without providing any residual control power to the President to supervise the Board” (Balasanian & Chu, 2009). The ruling in the case of Free Enterprise Fund v. Public Company Accounting Oversight Board (PCAOB) shows the extent to which the issue of separation of powers upheld (PCAOB, 2010). The main argument in the case was
Words: 717 - Pages: 3
Forensic Accounting Conceptual Framework: A skills Set Theoretical Analysis Abstract : Forensic accounting, given its peculiar investigative stance, requires a specific skills set on the part of the forensic accountant, that integrates accounting, auditing and investigative skills. The Jordanian Anti-Corruption Commission’s (JACC) struggle to investigate Maward’s, a Jordanian state-own company, suspected corruption has raised serious concerns regarding the weak state of forensic accounting in Jordan
Words: 4916 - Pages: 20
Forensic Accounting Name Institutional Affiliation Fraud committed on behalf of an organization vs. fraud committed against an organization Fraud commuted on behalf of the organization entails a section of the organization’s employees especially the senior management engaging in activities that are meant to benefit the company but in reality cause serious issue to the larger society the group is supposed to serve. An example of these types of frauds is false bidding scheme that refers to situations
Words: 1320 - Pages: 6
behaviors in the accounting field is extremely important to investors and stock holders. This is critical information will help determine their investment in the company and the amount of stock that they are going to purchase. Misleading financial funds in order to gain personal leverage, misuse of analysis, exaggerating revenue of assets, bribery and security fraud are just a few problems of unethical behavior. In 2002, Enron/Andersen and the Worldcom scandal were two companies that involved in
Words: 325 - Pages: 2
