the productivity of financial markets. Financial statements provided by the auditors are often reviewed as credible, unbiased opinion that truly reflects the company financial positions. There’s no doubt that auditor independence is the core of auditing profession when establishing its objectivity and integrity. Auditor independence, in particular, indicates the ability of an auditor to disregard any influence or control when conducting an opinion (AAA, 1973). Therefore, auditor must be, and must
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Auditing and Assurance Introduction The essay is mainly discussing that Transval Ltd wants to hire a new auditing team and depend on the request that be given to the new auditor, whether the new auditor should accept the offer to audit for Transval Ltd or not. Upon that, the essay also talks about the threats to the objectivity as an auditor and the ways to mitigate these threats. Last part of the essay is talking about the risks that could cause misstatements to the financial statements and
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Case 1-2: Cutting Corners 1. Discuss why each of the following options might be considered the wrong thing to do: a) Skip a portion of the count and guestimate. * The problem with guestimating the totals of the inventory count on the sample sections is that, during last year’s audit, Rick made a guestimate for the last few aisles of paper. Continuing to make guestimates will fail to prove that the system’s inventory count is correct. Therefore, a material misstatement of inventory could
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Take to Guard against an Audit report. This report contains information pertaining to the procedures that will prepare an organization for auditing and out of compliance materials. This report is analyzed according to three categories: (1) the accountability an audit can give a company, (2) having on demand documentation on premises, (3) internal auditing being cost efficient versus external audits. This report also explains how audits can damage the business’s reputation if not completed correctly
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CAPSTONE CASE STUDY ON ORGANIZATIONAL ARCHITECTURE: ARTHUR ANDERSEN LLP 1. Discuss the environmental, strategic and organizational changes that occurred over the life of Andersen in the context of Figure 11.1. Architectural design of firm may vary among companies. There are most common categories are business environment, strategy, and organizational architecture. Business environment of Andersen includes technology that was used effectively; structure of its markets, regulations which helped
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Chapter 1 Introduction to Audit & Assurance Engagements Difference between ACCOUNTING and AUDITING • Accounting – preparing financial statements • Auditing – examining financial statements Financial Statements Consist of: • A statement of financial position • A statement of profit or loss • A cash flow statements • Notes to the financial statements • Statement of movement in reserves Together with the documents above, companies also produce director’s reports,
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Case 8.3: Kansayaku Research online news services to identify recent developments impacting the accounting and auditing profession in Japan. Briefly summarize these developments in a bullet format. There have been recent developments in Japan that have impacted the accounting and auditing profession. Two of these developments are the Kanebo scandal of 2004 and the 2011 fraud scandal at Olympus Corp. The Kanebo scandal of 2004 involved ChuoAoyama PricewaterhouseCoopers, a leading auditor
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Sarbanes-Oxley Act of 2002 Sarbanes-Oxley Act of 2002 U.S. Senator Paul Sarbnes of Maryland and U.S. Representative Michael Oxley of Ohio followed a series of corporate failures, which inacted the SOX Act based on Enron’s bankruptcy and other key organizations such as Worldcom, Tyco, Xerox, and Adelphia who were among the United States organizations executives in the headlines for misdemeanors and multi-billion dollar reassertions," (Dembinski, Lager, Cornford, Bonvin, 2005). The Sarbanes-Oxley
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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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Liuting Han Accounting 439, Sec #01 Assignment #1 1-25: The objective of external auditing is to provide opinions on the reliability of the financial statements and, as a part of an integrated audit, provide opinions on internal control effectiveness. The overall objective of external auditing is to ensure that the financial statements of an organization are correct and are in order. The external audit is intended to enhance the confidence that users can place on management-prepared financial
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