I. Background on SOX The Securities and Exchange Commission was created in 1934 to police the U.S. financial markets. The pioneers of the Securities Exchange Act of 1934 saw a close connection between protecting investors and maintaining a healthy economy. In the past years‚ the SEC did not provide the regulation and control that might have prevented the worst results of the first decade of the twenty-first century. Its failures were of two kinds. First‚ succumbing to the deregulatory environment
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negative $16.8 billion. Reviewing GM’s stock price‚ we can see that the stock price also decreased dramatically started in 2004 to 2008. In 2005‚ GM’s stock traded around $19 per share and reached the lowest of $1.45 per share on March 2009. Source: Auditing and Assurance Services Textbook page C11-C13. 2. In referencing professional standards‚ what factors auditors should consider in evaluating potential going-concern uncertainties? Auditors are required to consider evidence obtained and accumulated
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objectives requires grouping similar types of input transactions (such as sales orders) together in batches and then controlling the batches throughout data processing. ANS: T 12. The "white box" tests of program controls are also known as auditing through the computer. ANS: T 13. The presence of a SPLMS effectively guarantees program integrity. ANS: F 14. When using the test data method‚ the presence of multiple error messages indicates a flaw in the preparation of test transactions
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appointed to lead an accountant team on November 15 His job was to report the audit progress There are typically 4 positions in an audit team: Partner-in-charge: overall the most responsible one Manager: supervises the whole auditing process In-charge-senior: carries out the auditing plan Staff members: perform tasks Frank is the partner-in-charge Although very unfamiliar‚ Hal becomes one of the four seniors‚ but after Ricardo resigns‚ Hal becomes in-charge-senior‚ Audit repot needs to be done by January
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Solutions for Chapter 1 Auditing: Integral to the Economy Review Questions: 1-1. The special function performed by the public accounting profession is the attestation to the fairness of the financial statements of clients. The special function ensures the reliability and integrity of the financial reporting system. Judge Burger described the special function as "certifying the public reports that collectively depict a corporation’s financial status‚" which involves "a public responsibility transcending
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As a result of that Judge Lifland characterized E&Y CBI’s audit as grossly negligent that caused substantial material losses to TWC’s party and CBI’s vendors. II. Questions 1) To my point of view an auditor’s primary objective in auditing accounts payable is to identify weather accounts payable
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1 Nanyang Technological University Nanyang Business School AC3101 - ASSURANCE & AUDITING Semester 1‚ 2013-14 Outline for Seminar 19 Learning objectives Describe the challenges in auditing estimates and identify steps to address those challenges Discuss the roles of internal auditors and the reasons entities outsource their internal audit functions Identify circumstances in which auditors may use the work of internal auditors‚ other auditors and experts‚ and factors that should be
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fact‚ is crucial to the credibility of financial reporting and‚ in turn‚ the capital formation process.” (Schuetze 1994) As indicated by the second Generally Accepted Auditing Standard (GAAS)‚ ethical behavior and independence on the part of the auditor are vital to the audit function. The demand for auditing arose from the need for a competent‚ independent person to monitor the contractual arrangement between principal and agent. If an auditor is incompetent or lacks independence‚ the
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documentation). Other organizations specialize in specific industries‚ such as healthcare. Some workers with a background in accounting and auditing teach in colleges and universities. For more information‚ see the profile on postsecondary teachers. The four main types of accountants and auditors are the following: Public accountants do a broad range of accounting‚ auditing‚ tax‚ and consulting tasks. Their clients include corporations‚ governments‚ and individuals. They work with financial documents
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1 2-16 (Objective 2-6) The following questions deal with auditing standards. Choose the best response. A. International Standards on Auditing are established by the: (2) International Auditing and Assurance Standards Board. B. Which of the following best describes what is meant by U.S. generally accepted auditing standards? (2) Measures of the quality of the auditor’s performance. C. The general group of U.S. generally accepted auditing standards includes a requirement that (3) Due professional
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