Harley-Davidson, Inc: Identifying eBusiness Risks and Related Assurance Services for the eBusiness Marketplace (Case Study) 1. What new risks did Harley-Davidson face by integrating eBusiness into its supply-chain management system and by allowing suppliers to have access to the company’s Intranet? E-commerce is a fantastic way for businesses to connect with customers around the world in a way that has never before been possible. Yet, that is not to say that eBusiness
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Unit 2 Assignment 1-38 A. The value of an audit to investors is critical because it allows them to assess performance, which in turn allows them to vote on organizational matters such as a board of directors. It also helps them make decisions on whether or not to buy or sell stock. As for creditors, an audit report serves a basis for realizing performance. With this they are able to make loan decisions and analyze risk. As far as the community as a whole, an audit reports shows true performance
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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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IFRS vs GAAP: Concerns about LIFO General accepted accounting principles (GAAP) allows the use of LIFO (Last-in First-out) under ASC 330-10-30-9 to determine inventory costs. However, IFRS (International Financial Reporting Standards) does not allow the use. Many companies choose to use the LIFO method because it allows the higher value inventory to be included into the cost of sales. This results in a smaller profit margin that further results in less tax. IFRS doesn’t allow the use of LIFO for
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assessment of his or her objectivity and to support user reliance on the financial reporting process and to enhance capital market efficiency. However, it is not that simple to be ethical in public accounting profession. According to AICPA Code of Professional Conduct, there are mainly five potential threats to auditor independence: intimidation threat, self-interest threat, self-review threat, advocacy threat and familiarity threat. In my opinion, intimidation threat and familiarity
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CASE 1.6 NEXTCARD, INC. Jeremy Lent, a chief financial officer (CFO) with Providian Financial Corporation decided to apply the marketing tactics used by Providian to establish an internet based company to offer Internet users a faster way to obtain credit cards. Lent hired dozens of marketing researchers to analyze the “surfing habits of Internet users. With this information the marketing team developed an Internet-based advertising campaign to target internet users that frequently used
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Just for Feet, Inc. Abstract Just for Feet, Inc. (JFF), its executive vice president; Don-Allen Ruttenberg, and the company’s auditing firm; Deloitte & Touche, LLP, and its associates; Steven H. Barry, CPA and Karen T. Baker, CPA, were all found guilty, on some level, in the fraud of Just for Feet, Inc. Ruttenberg purposely gave the company’s accounting department false financial information causing the accountants to record over $5 million in fictitious accounts receivable. This, in turn, caused
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connection with the purchase accounting for the merger. B.52 Other Responsibilities and Practice Cases (refer to Rule 301 and 502 of the AICPA professional code, pages 610-611 and 613-614 – There is no need to read the entire Module B). Read the following cases. For each, state whether the action or situation shows a violation or potential violation of the AICPA Code of Professional Conduct; if so, explain why an cite the relevant role or interpretation. a. CPA Ron Stout completed a review of
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MEMORANDUM TO: Accounting Staff FROM: Junior Accountant DATE: September 23, 2013 SUBJECT: Replacement of SAS 112 with SAS 115 The American Institute of CPAs (AICPA) Statement on Auditing Standards (SAS) Number 115 supersedes SAS Number 112. Going forward, auditors are to use rule SAS 115 when performing internal control audits. The rules have some similarities. However, the key differences in the rules are the definitions for control deficiency, significant deficiency, and
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CONSERVATIVE RECOGNITION OR COOKIE JAR RESERVES Robin Turner Summary Two months after graduating from college Nick O'Brien started to work in the accounting department at his aunt's software company. While going over some financial statements Nick notices what he believes are revenue recognition issues. Since Nick believes that Lee Marchetti the Chief Financial Officer (CFO) of O'Brien Software is an honest man, he decides to have a discussion with him about what he believes are revenue
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