take the deal with First National D) External users like shareholders and lenders depend on assured information. Also they can test their effectiveness of their internal controls of the company. E) The Audit service is going provide a written audit report to report their findings. Understanding the clients’ business is essential to the accuracy, they are well versed in the expertise of that field. It’ll give clarity and provide confidence to the external users. 19A) Information: Information
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2. A company's board of directors is responsible for acting in favor of the shareholders benefit, such as making major company decisions that could affect the shareholders. The Board of Directors hires and fires the executives, decides on dividend policies, option policies and, how much to pay the executives. In my opinion, I think that the board of directors could have changed some policies, been more aware of the risk involving the SPE's instead of letting things unfold the way that they did. The
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Expanded audit report Empirical studies have been conducted in the US, the UK and Australia to examine whether using an expanded audit report is effective in reducing an audit expectation gap. A survey conducted by Nair and Rittenberg (1987) in the USA revealed that an expanded audit report changes the users’ perceptions with regard to the responsibilities of the auditors. Likewise, Gay and Schelluch (1993) found that audit reports based on the revised Statement of Auditing AUP3 (i.e
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Case 1.1 Ocean Manufacturing, Inc.: The New Client Acceptance Decision Ocean Manufacturing, Inc. is recommended as a prospective audit client of Barnes and Fischer, LLP. I believe that Barnes and Fischer should accept the client because of Barnes and Fisher's opportunities in consulting and information technology (IT) development, Ocean Manufacturing, Inc.'s sound management/business model and past successful audits, and primarily, the growth potential of Ocean Manufacturing, Inc. following
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Health Management, Inc. was a pharmaceutical sales company who faced many problems after their fiscal year ending on April 30, 1995. They had issues surrounding a in transit 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
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and unqualified opinion can be issued when, in fact, they are materially misstated. From the definition, we can see that responsibility for business failure is mainly on the management side. The management should be alert towards the internal and external factors affecting the business condition in order to avoid business failure. Business failure not necessarily linked or due to the fault of auditors. It’s the management responsibility to cope with the changing environment. On the other hand, audit
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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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directors ins Marcus C Blackmore Am. He has 4,479,278 fully paid ordinary shares. 6. There are several purposes of the external auditor report. The external audit performed by a third party and an independent organization and is suppose to provide a true and fair view. A requirement of the Corporation Act 2001 is the auditor independence with regards to the audit. External auditing must conduct its audit in accordance with specific laws and
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Generally Accepted Auditing Standards ACC/490 June 25, 2012 Generally Accepted Auditing Standards The auditing and accounting profession has various standards and regulations that must be followed. The standards and regulations were put into place to ensure that reports are unbiased and accurate. The Generally Accepted Auditing Standards create stipulations on the accuracy, consistency, and verifiability of the information. The Sarbanes-Oxley Act of 2002 and the Public Company Accounting
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