Worksheet for You Decide Name Cathie Reid Course Code ACC555 Grade ___/ Date_12_/12_/12_ Questions: Q1: Discuss how the SEC has influence (if any) over the audit of Smackey Dog Foods, Inc. Solution: The SEC does not have direct influence over the audit of Smackey Company because, Smackey is not a public held organization, they do not have assets in excess of $10 million, and they do not have over 500 stockholders; which are the requirements for public and privately held companies
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Case 2-8 Juggyfroot “I’m sorry, Lucy. That’s the way it is.” Ricardo Rikey said. “I just don’t know if I can go along with it, Rikey.” “We have no choice. Juggyfroot is our biggest client, Lucy. They’ve warned us that they will put the engagement up for bid if we refuse to go along with the reclassification of marketable securities.” “Have you spoken to Fred and Ethel about this?” Lucy asked. “Are you kidding? They’re the ones who made the decision to go along with Juggyfroot
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Among the ten generally accepted auditing standards is the standard that requires an auditor to have independence in mental attitude. As with so many rules and guidelines set forth by the government and numerous other organizations, the interpretations of many of these rules can be vastly subjective. During the case against Health Management’s founder Clifford Hotte, his co conspirators and the auditors at BDO Seidman the defendant’s attorney Michael Young brought forth the idea that according to
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wants to be able to record this sale for the year ending 2010. This would violate the revenue recognition principle according to GAAP guidelines and would be looked at as an earnings management tactic, which is viewed as an unethical practice by the AICPA and GAAP. The CFO approaches his accounting department with the expectation that they come up with a solution to this problem. The accounting department is well aware of the rules and guidelines in place when it comes to revenue recognition, but
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as financial information services or expert services. [b] Independence rule 101 states that a partner or employee may not hold more than 5% and the partners holdings are just over half of one percent. Therefore, this is not a violation of the AICPA code
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to verify transactions or accounts and detect fraud has been present since the advent of trade and accounting. Thus the goal of auditing, in this sense, has not changed since. Teck-Heang Lee observed that “auditing serves as a mechanism to monitor conduct and performance, and to secure and enforce accountability (Lee 2008). All in all, an audit function plays a crucial role in maintain welfare and stability in society.” However, what has changed is how the roles and responsibilities of auditors have
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Asia-pacific region wherein China has the most number of fraud cases and followed by India, Australia, Indonesia and United Arab Emirates. This claim has been confirmed further by Yancey (1996), which she states in her study that during 1987-1993 AICPA Professional Liability
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auditors may change completely. Auditors know the risk of losing this client, and may become more flexible during audit engagements. The only way to figure out if such prospective clients be avoided is to process each unique situation, and use professional judgment in deciding whether to take on a client or not. 3. This issues goes back to the substance-over-form concept. The audit should consider whether economic substance was used in accounting for these transactions. They should also consider
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accountants (CPAs) have many professional responsibilities whether completing a review or an audit of the client’s financials. CPAs can also ask the opinion of other CPAs during the course of completing work for clients. The firm has been asked to provide information on the correct way to calculate deferred taxes, the correct way to report accounting changes and error corrections, and why a company would want to establish a subsidiary as a corporation. CPAs Professional Responsibilities According
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the criminal conviction of Arthur Andersen, LLP, one of the then Big 5 accounting firms, on charges of destroying documents related to the Enron case brought into question the ethical standards of the profession. 1–2 Assurance services are professional services that enhance the quality of information, or its context, for decision making. The two types are: (a) those that increase the reliability of information and (b) those that involve putting information in a form or context that facilitates
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