CHAPTER TWO LITERTURE REVIEW INTRODUCTION Reading the news papers, listening to news on the various electronic media, one cannot dispute the fact that Internal Controls in public sector work places are very less than standard satisfactory. The work places in this country appear to be characterized by immoral acts such as selfishness, greediness, misconduct, falsification of accounts, bribery and abuse of power. The result is that people have no confidence in the public sector organization in
Words: 2035 - Pages: 9
CHAPTER 1 AUDITING AND THE PUBLIC ACCOUNTING PROFESSION – INTEGRITY OF FINANCIAL REPORTING |LEARNING CHECK | 1. SEVERAL COMMON ATTRIBUTES OF ACTIVITIES DEFINED AS AUDITING ARE (A) SYSTEMATIC PROCESS, (B) OBJECTIVELY OBTAINING AND EVALUATING EVIDENCE, (C) ASSERTIONS ABOUT ECONOMIC ACTIONS AND EVENTS, (D) DEGREE OF CORRESPONDENCE, (E) ESTABLISHED CRITERIA, (F) COMMUNICATING THE RESULTS, AND (G) INTERESTED USERS. 2. A financial statement audit involves obtaining
Words: 4500 - Pages: 18
This is unavoidable due to the limitations of accounting and inherent limitations of any internal control system. Included in the final audit report to management will be a letter outlining what material weaknesses our audit team has identified in both your company’s accounting practices and internal controls in detecting misstatements or errors in the financial information. The management of Apollo Shoes, Inc.’s has responsibility for the financial statements. They are also responsible
Words: 515 - Pages: 3
discovering the major internal control weakness and highlighted it to the team leader. However, the audit team leader did not discussed the issue with the management, so he has not performed due care in auditing Prospek Teguh Sdn Bhd. (ii) If a lawsuit is initiated by Oct Bank against Nadyah & Sarinah, the auditor would probably be liable. This is because, as the auditor, they were responsible in reporting any weaknesses in internal control to the management. In this case, the weakness was
Words: 488 - Pages: 2
Four Types of Control Mechanisms Control mechanisms are used to monitor progress and evaluate performance. System control, Bureaucratic control, Market control, and Clan control are all mechanisms that Target use to operate at peak performance. System control uses a set of procedures designed and established to check or regulate a resource or system. Bureaucratic control consists of formal rules and regulations that establish authority. It also set standards and regulate employee behavior through
Words: 336 - Pages: 2
down on reserves set aside for expenses. The economic situation at the time was not taken into account when implementing these aggressive accounting measures. Other similar companies were reporting declining revenues. It was identified that the management who were making the aggressive accounting decisions, were also posting the journals to the general ledger, and reviewing and approving the reporting. Pressure was placed on personnel who did not support the aggressive targets. A great deal of focus
Words: 4044 - Pages: 17
Checklist for Evaluating Internal Controls Internal control evaluation checklists are meant to help a company assess the structure within the organization. An effective internal control guarantees the integrity of financial reporting. There are five components of an internal control system, which include: control environment, risk assessment, control activities, information and communication, and monitoring. Not only are there five components, but there are three phases, understanding, assessment
Words: 502 - Pages: 3
Sarbanes-Oxley Act (SOX) of 2002 Topics Covered: How SOX affects the following: CEO’s and CFO’s of Public Companies Outside Independent Audit Firms SOX section 404 on Internal Control The Main Advantages and Disadvantages of SOX Executive Summary The Sarbanes-Oxley Act of 2002 (SOX) was intended to create more transparency in financial reporting and to combat the perceived inflation of CEO compensation. To do this, the act required that a board of directors be financially independent
Words: 4177 - Pages: 17
practices. The resultant regulatory intervention forces a company to revisit its internal control structures and asses the nature and scope of its compliance with the law. This paper reviews the implications emerging from the mandatory compliance with Sarbanes-Oxley (SOX) Act. Issues related to IT governance and the general integrity of the enterprise are also identified and discussed. Industry internal control assessment frameworks, such as COSO and COBIT, are reviewed and their usefulness in ensuring
Words: 3348 - Pages: 14
Introduction The purpose of our report is to provide our analysis, assessment, and recommendations related to Aloha Products (AP) and the current control systems for the manufacturing, marketing, and purchasing departments. Based on the case information, we believe the current implementation of measurements and controls do not best serve the current business strategy of AP. As a result, we have included recommended changes for the three departments that best align with AP’s business model and will
Words: 2729 - Pages: 11
