receivables systems of Seeley Co. Audit documentation is available from the previous year’s audit, including internal control questionnaires and audit programmes for the despatch and sales system. The audit approach last year did not involve the use of computerassisted audit techniques (CAATs); the same approach will be taken this year. As far as you are aware, Seeley’s system of internal control has not changed in the last year. Client background – sales system Seeley Co is a wholesaler of electrical
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Chapter 2: The Risk of Fraud and Mechanisms to Address Fraud: Regulation, Corporate Governance, and Audit Quality 1. The auditor is not responsible for the presentation of financial statements; therefore, the auditor has no responsibility for fraud in the financial statements. FALSE 2. An example of fraudulent financial reporting is the CFO intentionally overstating sales to boost profits. TRUE 3. The auditor is responsible for actively considering fraud risks in order to
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including adherence to new internal controls and procedures designed to ensure the validity of their financial records. The Act requires all financial reports to include an internal control report. This is designed to show that not only are the company's financial data accurate, but the company has confidence in them because adequate controls are in place to safeguard financial data. Year-end financial reports must contain an assessment of the effectiveness of the internal controls. The issuer's auditing
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engagements that require procedures to be applied to financial reporting processes and controls, but do not necessarily require an audit. Then there are findings and recommendations that are used when implementing a system. The next type of audit is the SAS 70 audit. According to "NBD Accountants Consultants" (2008), “It is an auditing standard put forth by the AICPA that is utilized by auditors for examining internal controls in service organizations. Service organizations are the host of companies that
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organizations—such as the Public Company Accounting Oversight Board and the Financial Accounting and Standards Board—as well as global standards, such as the International Financial Reporting Standards, requiring appropriate implementation and assessment of internal controls. Whether developing appropriate processes internally or preparing substantive testing, external auditors must be able to quickly and completely assess the financial processes, determine weaknesses, and provide recommendations for improvement
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Patrick Chamberlain Dr. Wokukwu Intermediate Accounting October 13, 2011 Corporate Responsibility of Sarbanes Oxley Act of 2002 To first understand the corporate responsibilities of the Sarbanes Oxley Act of 2002, otherwise referred to as SOX; you first need to understand that the Act was created for. The SOX came into effect in July 2002 and it was introduced for major changes to the regulation of corporate governance and financial practice. The act was also known as the ‘Public
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communication 7 marks • Task 2 — Determine materiality and perform preliminary Analysis 9 • Task 3 — Assess inherent risk. 6 • Task 4 — Gain an understanding of the client's internal control environment and assess control risk. 4 24 marks 2 BC 2 – Assignment #2 • Task 5 — Design and perform tests of controls and dual-purpose tests. 10 marks 3 1 BC 2-Assignment #3 • Task 6 — Perform audit of cash and investments. 6 marks • Task 7 — Perform audit of accounts receivable. 10 »
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Internal Control – Letter to Jerry Mays ACC557: Financial Accounting Date: May 7, 2011 Jerry Mays Owner Manhattan Company 25 W 39th Street New York, NY 10018 Dear Mr. Mays: Thank you for being such a great host last week while I was auditing your internal controls related to mail cash receipts. It was a pleasure meeting your entire staff and I am extremely grateful that you freed up your employees during my visit so that I could sit down with them and get a better understanding of your
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later in the course. Many instructors will not assign any problem from the end of this chapter. This can be done without any loss of overall continuity in the course. If the course will emphasize internal controls, it might be desirable to cover in class one of the general cases on internal control from the back of Chapters 4, 7, or 8. This should be done to stimulate student interest, but the instructor should not worry if the students in the course fail to analyze the case correctly. In some
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regarding an adequate system of internal control over financial reporting (Arens, Elder & Beasley, 2006). An operational audit will help us to obtain and evaluate evidence about the efficiency and effectiveness of your company’s operating activities in relation to specified objectives (Arens, Elder & Beasley, 2006) In addition, our company provides following attestation services: audit of historical financial statements, effectiveness of internal control over financial reporting, review
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