Memorandum To: Accountants From: junior accountant Date: October 22, 2012 Subject: SAS 115-Statement on Accounting Standards SAS 115 was issued by the Auditing Standards Board to provide guidance to auditors on what should be communicated to management and those in charge of governance within an organization. The SAS 115 requires the auditor to make communications, in writing, to management regarding imperative deficiencies and material weakness in internal controls that are noted in audit
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Pinnacle Manufacturing: A Case Study Auditing 444 Course Project Professor Ranauto August 4, 2013 Pinnacle Manufacturing: A Case Study Part 2. Section A. External users’ reliance on financial statements. * Situation 6.: Raising debt to finance a manufacturing plant for Solar-Electro. * Situation 11.: An intercompany loan to Solar-Electro from Welburn skews the financial statements. Likelihood of financial difficulties. * Situation 1.: Solar-Electro may not have
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obtained from the client d. (4) Effective internal control provides more assurance about the reliability of audit evidence 7-28 a. (1) to coordinate the audit b. (4) a record to be used as a basis for the following years engagement c. (4) Auditing procedures followed and the testing performed in obtaining evidential matter. d. (1)
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engage external specialists to present a highly cost-saving and professional performance. Although some evidence suggests that there are many limitations of outsourced activities, this essay asserts that outsourced internal audit function plays an essential role in the development process of a corporation and there is a need to outsource that function. In consequence, these positive effects on companies will be described principally in three main areas: increase in the independence of external auditors
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accounting) that Myers and Sullivan wanted them to release $828 million of line accruals into the income statement. Besides that, the internal audit was primarily exist to measure business unit performance and enforce spending controls, whereas the external auditors, Arthur Andersen, was an independent auditors which performed the financial audits to access the reliability and integrity of the publicly reported financial information. Cynthia Cooper, the head of internal audit, had brought an issue related
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1. Primary audit risk factors that were evident within Powder River’s operations are: • Fraudulent Financial Reporting Risk for Revenue • Other Areas of Fraud Risk. From year-end 2004 through the first-quarter 2008, defendant Brian Fox misled the investing public by fraudulently inflating the revenue and assets and fraudulently omitting major liabilities, of Powder River Petroleum International, Inc. (“Powder River” or the “company”) in the company’s Commission filings, and by
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reviewed an interview with Alchemy’s CAE and the external auditing team to identify areas of improvements and noncompliance with The Institute of Internal Auditors’ standards. ISSUES: The following issues were identified while watching the footage. • Authorization o No Charter for the internal audit team to follow. • Reporting o Report is edited by the CEO. o Limited Scope with no audits by parent company. o No interactions with external audit teams. o CAE must report periodically to senior
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Auditing Concepts ZZZZ Best Company, Inc Case Solutions: 1. A review is performed to obtain a reasonable basis for providing limited assurance that the client's financial statements have been prepared in conformity with generally accepted accounting principles. An independent audit is designed to provide a reasonable basis for expressing an opinion concerning whether or not a client’s financial statements have been prepared in accordance with generally accepted accounting principles.
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Question 1 (3 marks) The chair of the board of Hughes Corporation proposed that the board hire as controller a PA who had been the manager on the corporation’s external financial statement audit. The chair thought that hiring this person would reduce the cost of the annual audit and consequently save the company at least half of the fee paid to the auditors. The chair proposed giving this new controller a full staff to conduct investigations of accounting and operating data as necessary. Required
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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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