Accounting: ACC-571 January 28, 2012 A Practical Guide to the New PCAOB Reporting Requirements Created by the Sarbanes-Oxley Act of 2002, the Public Company Accounting Oversight Board or PCAOB requires auditors of U.S. public companies be subject to external and independent oversight. Congress established the PCAOB in order to protect investors and the public interest by promoting accurate, informative, and independent audit reports. The PCAOB aims to improve audit quality, reduce the risks of auditing
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sufficient competent evidential matter to support its audit opinion. In example of issuer A, due to deficiencies in the Firm’s testing of certain key assumptions underlying the cash flow projections, the reasonableness of the assumptions the external pricing service had used and the specialist's questions regarding the appropriateness of the weighting of the two estimates that were used to estimate the fair value, the Firm failed to obtain enough evidence to support its audit opinion. 2) The
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2-7 The Public Company Accounting Oversight Board (PCAOB) is responsible for establishing auditing standards for audits of public companies. The PCAOB was established by the Sarbanes-Oxley Act and appointed and overseen by the Securities and Exchange Commission (SEC). The Auditing Standards Board (ASB) of the AICPA is responsible for establishing auditing standards for the audits of private companies. However, prior to the SOX Act, the ASB established standards for private and public companies
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Problem 2-7 Since the Sarbanes-Oxley Act of 2002 (SOX), the PCAOB is responsible for establishing the auditing standards for public companies, whereas the AICPA (Auditing Standards Board)is responsible for private companies. Prior to the SOX, the AICPA was responsible to establish auditing standards for both private and public companies. . Problem 2-10 Although the generally accepted auditing standards are quite general, it is probably best to keep them that way rather than having specific
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Auditor’s Powers According to S.174(4) Company Act 1965, an auditor is entitled to obtain information and explanation as he desires for the purpose of audit from related company at all reasonable time through any officer, auditor and secretary and such information and explanations as he desires for the purposes of audit 1. Auditors are given a broad power to detect fraud by the management. According to Newton v Birmingham Small Arms Co Ltd2, the court observed that obtaining all information
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Homework #2 Chapter 4 4-8 If the partner is part of an audit engagement, they can not own stock for the company in which they are responsible for reporting the audit for, even if the client is out of another office. The audit report must be from an individual that is independent of the company. As for the professional staff members, they too can not own stock with any of the clients they conduct audits with, if they have been assigned to engagement or if they become partner of the office
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Delima Enterprise Sdn Bhd is founded by Encik Zayed in 1981. Encik Zayed himself is the managing director and his wife, Puan Hashimah is the Chief Operating Officer. The other personnel, Puan Balqis and Encik Salam both are family members to the directors. All personnel have only secondary school background and on 2006, the company had hired Cik Amy as Finance Executive who just graduated and no working experience. In May 2006, the company secured a contract worth RM 750,000. Due to shortage of
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Case 1.1 1) Five procedures an auditor should perform in determining whether to accept a client are an independence check, checking management integrity, the nature of disagreements, communication with previous auditor, and reason for auditor change. Communicating with the previous auditor, evaluating management integrity and the independence check are required by the auditing standards. 3) The following non-financial should be considered before accepting Ocean as a client are a high auditor
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and external controls, and lastly they also set out guidelines in which the audit committee should provide them with their Financial reports and public disclosure those guidelines are put in place in order for financial information set out to the public is accurate and timely and most importantly reliable. Imperial Oil also receives a score of 2. due to the fact that like Suncor they’re committee is composed of independent auditors. audit committee oversees the work of internal and external
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accuracy and validity of the data leading to bad decisions and may also end up killing the company. An audit of a financial statement must be non-biased and should increase the degree of confidence of the intended users and hence must be carried by an external member who has no personal ties to any of the partners in the firm. Also, as the division of profits and losses depends on the financial statements it is necessary to ensure there is no deliberate misstatement of finances that benefits one of the
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