an opinion on these financial statements based on our audit. The major audit issue involved will be determining that the client has properly categorized costs between research and development (those costs involved in establishing technological feasibility) and those costs that should be capitalized. The auditors will have to determine at what point the software product reached the point of technological feasibility. We conducted our audit in accordance with auditing standards generally accepted
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clients may impair objectivity and independence. Implications- auditor may not qualify the audit report when qualification is required because this will upset client who may move to another audit firm and thus cause loss of significant income. Safeguards Do not accept certain assignments. Resign from certain assignments. Do not stand for reappointment as auditor. Reduce non audit work with a view to control gross practice income from that particular client. As a general
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|Sandeep Kumar | | |[pic] | | |sandeep_sidhwani@yahoo.com | | |
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Shaun Peter is the partner in charge of the audit of Bluefin Ltd (Bluefin). Over the years, he has become a golfing buddy of Bluefin’s CEO, Richard Sam. During the current year, Shaun and Richard jointly purchased an exclusive holiday home in Brisbane. The holiday home represents more than 10% of Shaun’s personal wealth. Required For the independent situation above, and using the conceptual framework in APES 110, answer the following questions. 1. Identify potential threats to independence
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statements as of June 30, 2009 and 2008 (as well as in prior years) by a Big Five auditing firm. However, in accordance with SOX, the audit firm was not required to have, nor was it engaged to perform an audit of Koss’s internal control over financial reporting. The audit did include consideration of internal control over financial reporting as a basis for designing audit procedures that were appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Koss’s
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Wal-Mart Vs. Amazon University of Phoenix ACC 291 Principles of Accounting II Wal-Mart vs. Amazon. Who do you think might win? Well, these are two of the nation’s largest retailers. Wal-Mart mainly sells in-store while all of Amazon’s sales happen online. So why could this competition between two of the largest retailers cause unethical practices and behavior in accounting? Wal-Mart is “considering using its own shoppers as delivery people, providing some kind of incentive to drop off online
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3-31 Ron Barber, CPA, is auditing the financial statements of DGF, Inc., a publicly held company. During the course of the audit, Barber discovered that DGF has been making illegal bribes to foreign government officials to obtain business, and he reported the matter to senior management and the board of directors of DGF. a. If management and the board of directors take appropriate remedial action, should Barber be required to report the matter outside the company? If they take the appropriate
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one's actions on others. 3. When is it appropriate to contact the audit committee about a difference of opinion with the CFO over an accounting or financial reporting manner? A. If the CFO does not agree to correct the financial statements B. The CEO supports the CFO and does not agree to correct the financial statements C. The external auditors support the CEO and do not agree to correct the financial statements D. The audit committee should always be the first to be informed about such a difference
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Equity 2.1617 1.9786 1.7462 4.8755 Activity Ratios: Accounts Receivable Turnover 32.5026, 116.7711 49.7515, 52.7208 Inventory Turnover Ratio: 4.98, 3.55, 1.89, 1.95 Looking at the key ratios during that period there were a lot of red flags. The audit risk for Crazy Eddie would be very high. Some of the major red flags were inventory turnover in 4 years went from 4.98 to 1.95. That shows that some of the accounting was incorrect. Some of the other red flags are the amount of accounts receivable
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Internal Controls Internal Controls The University of Phoenix (Axia) XACC/280 Financial Accounting Concepts and Principles Renee’ Baker April 3, 2011 Internal Controls. Internal controls are a certain system that includes actions and methods with emphasizing organization’s security and intention to protect its assets and keep the accounting process trustworthy and precise (Weygandt, Kimmel, Kieso, 2008). Protecting a company’s assets is necessary because of the danger resulting
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