Audit Program Design Part III Tywana Bowman University of Phoenix ACC545/Financial Accounting Professor Michael DeMarco September 26, 2010 Introduction In order to conduct a substantial audit of Apollo Shoes the auditor must obtain a sufficient understanding of the entity and the entity’s environment, including the internal control. The understanding of the entity and its environment helps the auditor in a variety of ways throughout the audit, including establishing materiality, considering
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c. Attitude/Rationalization The fraud triangle is depicted by the following image: Incentive/Pressure Management or other employees will have incentives or circumstances of pressure to commit fraud. If the decision is made by management to report fraudulent financial statements, the most common reason for this will be threat by economic, industry or entity operating conditions to the financial stability and profitability of the company. Excessive pressure is placed on management to meet the
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Jarvis Smith Finance 4311 Corporate Governance and Ethics First Paper Corporate governance has been define many different ways throughout time, but there is one definition that I feel properly demonstrates what corporate governance means. Corporate governance refers to the system by which corporations are directed and controlled. The governance structure specifies the distribution of rights and responsibilities among different participants in the corporation (such as the board of directors
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| Public Company Accounting Oversight Board | Establishment and operation | Prior to audit work done by an external auditor, confirm that the audit firm plans to register with the Public Oversight Board.Once rules for registering are in place, confirm that the audit firm is registered and is in compliance and good standing with the Public Oversight Board rules. | Auditor Independence | Segregation of audit and other services | Request that the bank’s accounting department determine what payments
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Chapter Four Professional Accounting in the Public Interest, Post-Enron Purpose of the Chapter When the Enron, Arthur Andersen, and WorldCom debacles triggered the Sarbanes-Oxley Act of 2002 (SOX), a new era of stakeholder expectations was crystallized for the business world and particularly for the professional accountants that serve in it. The drift away from the professional accountant’s role as a fiduciary to that of a businessperson was called into question and reversed. The principles
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the preparation of information is true and accurate. They also micromanage audits from broker-dealers, including compliance reports filed in accordance to federal security laws; which also promotes investor protection. 103 Regulation of Audit Firms Section 103 of the Sarbanes-Oxley Act of 2002 charges the PCAOB with creating auditing and other related standards for registered public accounting firms when preparing audits. It also authorizes the Board to create any rules it deems necessary to
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save a lot of money by avoiding the costs of translating their financial reports into several local accounting languages. On the costs side, adopting IFRS would require various upfront costs for companies. During a transition phase, companies would have to modify their accounting systems and processes as well as provide comparative financial information between their previous U.S. GAAP reports and their new IFRS-compliant reports. In addition, companies would have to train their employees and outside
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independence? Moreover, how do we weigh the cost of financial misstatements with the cost of redundancy due to rotation of audit firms? Demanding public companies to rotate their audit firms may appear reasonable on paper, however, this rotation brings more concerns than answers. Currently in the auditing of publicly held companies, lead audit partners are required to rotate of audits every five years. This ruling was enacted from the Sarbanes- Oxley Act of 2002 (SOX). Also, SOX requires a 1-year cooling
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corporate behaviour, ethical responsibilities, and internal controls due to the increasing number of corporate fiascos. The Arthur Andersen scandal was one of many conducted worldwide and an example of how things can go wrong in the public sector. This report will briefly describe the Arthur Andersen scandal, analyze the major failure elements that led to the scandal, and finally provide recommendations that could have been implemented to prevent these issues. Overview, Issues, and Recommendations:
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Chapter 13 Overall Audit Plan and Audit Program Key objectives: 1. Know the five types of audit tests. 4. Understand how the tests are emphasized in different circumstances. 5. Know the methodology for designing an audit program. 6. Understand the relationship of transaction-related audit objectives to balance-related audit objectives. 7. Integrate the four phases of the audit process. 1. Audit program The importance of the audit program cannot be underemphasized
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