been more relaxed but still in accordance with PCAOB. Until the IPO occurs, Barnes and Fischer will be able to offer consulting advice, and according to the PCAOB, will be allowed to engineer the IT Control system after the IPO. The previous auditor of Ocean Manufacturing, Inc. lacked the technical expertise to understand sophisticated controls software and was not competent in providing required consulting services to move the company towards its goal of national markets and
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inventory problem that totaled up to $1.8 million. Involved in the problem was an independence problem with their auditors. Professional accounting standards do not specifically state what is considered “friends”. This issue is highly controversial because there is not a defining point to where the independence issue is clearly seen. There comes a point to where a company and their auditors should not have a relationship. The point that I feel is the line that shouldn’t be crossed is if there is a
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business failure and audit risk. Why is business failure a concern to auditor? Firstly, these two terms are distinguished by definition. A business failure occurs when a business is unable to repay its lenders or meet the expectation of its investors because of economic or business conditions, such as recession, poor management decisions, or unexpected competition in the industry. Audit risk represents the risk that the auditor will conclude that the financial statements are fairly stated and unqualified
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6 October 2013 Audit Case 4.3 1a. The auditor’s responsibility should have been to show the misstatements that CUC had since 1995. Deloitte and Touche, LLP should have reviewed past audits with Ernst and Young, CUC’s prior auditors. b. One category of fraud that affected the financial reporting was the independence with CUC. They hire a few employees who worked for Ernst and Young in the past. This is an independence problem. The other fraud category would be the false coding of services sold
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Ryan Mullin Auditing- ACC 304 Assignment 2.63 Auditors are expected to adhere by certain responsibilities, performance and reporting standards. In the case study 2.63 the evidence provided shows that these principles were violated when conducting the audit. Auditors are responsible to be competent and capable in order to perform the audit. It was unsuitable for Holmes to hire two accounting students to perform the audit since they lacked the proper experience in the accounting field needed
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responsibility to ensure the validity and reliability of information. They will also express their opinions on the financial report based on their audit. Deloitte should conduct their audit which must be in line with Australian Auditing Standards. The auditors are required to comply with the ethical requirements and give a true and fair view. 3. It is under Note 2 that deals with Significant Account Policies. The method of depreciation adopted by Blackmores Limited to depreciate property, plant and
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reporting and ensure accuracy. The Generally Accepted Auditing Standards is “a set of systematic guidelines used by auditors when conducting audits on companies’ finances, ensuring the accuracy, consistency and verifiability of auditors’ actions and reports” (Investopedia, 2012. p. 1). Following the guidlelines set forth by the Generally Accepted Auditing Standards allows auditors to reduce the chance of overlooking information. The Generally Accepted Auditing Standards are divided into three sections:
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audited by external auditors routinely. Feckle and his vice presidents must take any revealed weakness in external auditors’ report serious. Hiring external auditors for auditing Hafford’s internal control will ensure management that internal control system is powerful enough to find any financial problem and track its underlying reasons including management poor performance. Providing financial and accounting information by accounting department is Hafford’s internal auditors’ responsibility. Hafford’s
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Should external/internal auditors be responsible for detecting client fraud? In 2001 Enron, the seventh largest energy company in 2001, filed for bankruptcy. The event named “Enron Scandal” is considered to be the most shocking incident in American economic history. Bring the country to the edge of disaster, the scandal was basically caused by securities fraud which Enron was charge with. The irrationality of accounting and auditing system encouraged U.S. legislative to respond the scandal, enacting
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client. His partner’s office is located out of Atlanta, GA. A professional staff auditor owns stock for J& J’s Manufacturing Co. His manager states that one of the auditors has quit and left the engagement and they need them to fill it. The professional auditor takes the engagement on. 4-18) A. What is the meaning of the generally accepted auditing standard that requires the auditor be independent? 1) The auditor must be without bias with respect to the client under audit. B. The independent
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