A. 1. Audit committees of public company board of directors responsibilities since SOX 2. Sarbanes-Oxley section 404 on internal control 3. The accuracy of public company financial statements and the cost of capital for public companies 4. The main advantages and disadvantages of Sarbanes-Oxley Act B. Can legislation guarantee the accuracy of public company financial statements? Why have previous laws failed? Why CEOs and CFOs are paying so much attention to this law? Audit Committees
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Before the fall of corporations like Enron and WorldCom, there was also far too much corporate fraud during the Internet bubble. According to Stanley Block and his co-authors, “The major accounting firms had failed to detect fraud in their accounting audits, and outside directors were often not provided with the kind of information that would allow them to detect fraud and mismanagement.” (Block, 12). What is the definition, in a nutshell, of the Sabarnes-Oxley Act? This is something that needs to
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June 5, 2014 Audit Report Number: LJB-505-2014 To: Patrick Krause President, LJB Company Anthony Sahara General Counsel, LJB Company Rebecca Patriosky Treasurer and Controller, LJB Company From: Dilenia Baez Audit Engagement Manager, Ralph & Golberms, PLLC Highlights As part of the engagement approved by Patrick Krause, President of LJB Company. Ralph & Golberms, PLLC evaluated the current internal control functionality of LJB Company
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account (#111-1) and document your procedures on an audit document similar to the one in Exhibit 9-4. Indicate and prepare on the audit document any proposed correcting entries that are needed to ensure fair presentation of this financial information. [Case 9-1.doc] Lakeside Company Tests of Buildings - Warehouse/Office December 31, 2012 Audit document No. W-3 Prepared by: KB Reviewed by: RG Reviewed by: JG Description | Amount | | Audit Procedures | Balance per books - Beg. of Year
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Usefulness of having audit committee. The first one is audit committee can improve the auditor’s independence. Audit committee is the body responsible for overseeing the company’s relations with the external auditor. Therefore, audit committee help in ensuring that there is no conflicts of interest exist that might interfere with the auditor's ability to issue its opinion on the financial statements. Thus, they may help in improving the independence of external auditor. Next, audit committee can improve
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ANALYSIS Established in 1998 by Chris Richard, Gemma Wood and Lauren Hulme, Richard, Wood and Hulme LLP (“RWH”) is a financial services firm offering audit and taxation services to its clients with a mission of delivering excellent service and improving clients’ internal controls. Being a “team player” is an essential trait of a RHW employee because client audits are completed by teams. The client fee is flat, so the more efficiently and effectively the team members’ work, the higher the margins the firm
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Case #3.4 – Sunbeam – Incentives and Pressure to Commit Fraud I. Technical Audit Guidance To maximize the knowledge acquired by students, this book has been designed to be read in conjunction with the post-Sarbanes-Oxley technical audit guidance. All of the post-Sarbanes-Oxley technical guidance is available for free at http://www.pcaobus.org/Standards/index.aspx. In addition, a summary of the Sarbanes-Oxley Act of 2002 is also available for free at http://thecaq.aicpa.org/Resources/Sarbanes+Oxley/Sarbanes-Oxley+–+The+Basics
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Introduction to Accountant Responsibility Essentially, accountants have a responsibility a number of parties, with the major parties in this case being the government, clients and third parties. In today’s capitalist society, the accounting profession is deemed to be a common and important feature. Discussing the responsibilities accountants have to the three parties identified above would, therefore, certainly be a prudent and logical move. Responsibility to Clients To begin with, accountants
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under a misleading firm name. 11. A member shall not knowingly subordinate his or her judgment to others. 12. A member shall follow the technical standards of the Auditing Standards Board in an audit engagement. 13. A member bases the fee on the findings determined by the IRS in a tax audit case. 14. A member discloses confidential information in a peer review of the firm’s practice. 15. A member issues an unqualified opinion when a client departs from GAAP because of a conceptual
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company that provides air cargo carrying services within the Asian region. The company owns five fully owned subsidiaries and the major shareholders of this company is Bangor Berhad. The company’s external auditor is Kencana & Associates where the audit team is led by Mr Chuah Mun Soong. On 5th February 2006, Mr Chuah has been informed by his team that there are some inconsistencies in the accounts of FCB. Therefore he has decided to do his own investigation on the company to determine is there any
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