Abstract Corporate fraud has been a growing issue since Enron bankruptcy. The factors that contribute to the occurrence of corporate fraud are hard to control and methods used to prevent and detect fraud both by internal control and outside auditing have unavoidable weaknesses. Despite all the effort being made‚ it is highly unlikely that corporate fraud can be eliminated from the workplace. Introduction After Enron scandal got revealed in 2001‚ an increasing number of corporate frauds
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especially with the threat of imprisonment if the internal controls are not maintained. The act ensures that a “checks and balance” internal auditing of the accounting cycle for the company and investors to keep their assets in check. The role of internal audits is to ensure that Institute of Internal Auditor’s Standards for the Professional Practice of Internal Auditing Standard 300 Scope of Work be followed. The scope of the internal audit should encompass the examination and evaluation of the adequacy
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Official stamps were also "clearly tampered with". Grant Thornton‚ the auditor’s in charge of auditing Parmalat’s financial statements‚ were seemingly asleep at the wheel in confirming account amounts as well as their mere existence. The firm did not confirm the forged documents with outside third parties such as banks and other creditors. It also made questionable ethical decisions by auditing Bonlat‚ a spin-off of Parmalat SpA. Despite being within Italian law‚ Thornton gave up its status of
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Ge Lin Mini Case1 Something Went Sour at Parmalat Discussion Questions: Question 1 (1)When confirming cash balances held on deposits‚ the auditor should list as the “balance per bank” on the top of the bank reconciliation for each bank account from each bank that the client utilizes in the business. And a confirmation letter is to be sent by the auditor and received in the mail directly back from each bank at offices of the public accounting rim. (2)The auditor should observe the opening of the
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In this mini case Mike Stephan is dealing with a very difficult situation because he is new to the accounting firm and wants to impress the superior accountants on his engagement team. While auditing for EarthWear‚ he makes a little mistake by spending too many hours looking at the wrong bank statements when he is not supposed to go over a total of 6 hours. Pressured by the senior on the audit‚ he is caught between lying about his hours or telling the truth and going over budget on the audit‚ potentially
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Auditor’s responsibility is to express an opinion on the financial statements based on the audit‚ and the auditors are required to conduct their auditing process in accordance with auditing standards. During all auditing stages‚ it is important to pay extra attention to obtained information and evidence in relation to the disclosures and footnotes made in the notes to the financial statements. If there are any changes in the loan agreement‚ dividend policy‚ manufacturing plant building and a line
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Student 1 | Student 2 | Student 3 | Student 4 | Name Xuan Hoang TRAN | Name | Name | Name | ID 1138440 | ID | ID | ID | Participation % | Participation % | Participation % | Participation % | Competent | Competent | Competent | Competent | Not Yet Comp | Not Yet Comp | Not Yet Comp | Not Yet Comp | % | % | % | % | Comments
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University of San Jose-Recoletos AUDITING THEORY 1. Which of the following is not a basic element of an audit report? a. Title of the report. c. Client’s address. b. Introductory paragraph. d. Auditor’s address. 2. A measure of uniformity in the form and content of the auditor’s report is desirable because a. it helps the auditors avoid legal liability. b. it helps the readers understand the report. c. it helps the auditor identify the usual circumstances that are expected to
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auditors to the extent that if a firm provides auditing services for a company they cannot really provide any other types of services. This limitation was put into place in order to maintain the independence of auditors and the companies that they audit. If an accounting firm was allowed to provide auditing services as well as tax services to a company‚ the independence‚ in such a case‚ of the firm would not be maintained because the firm would be in part auditing some of its own work. The provisions of
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Case Study Project What is the purpose of auditing? Describe the relationship between internal controls and the audit process. Answer The purpose of an audit is to provide financial statement users with an opinion by the auditor on whether the financial statements are presented fairly‚ in all material respects‚ in accordance with the applicable financial reporting framework. An audit also enhances the degree of confidence of intended users in the financial statements. Financial audits
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