Essay On Sas No. 99

According to an article in the CPA Journal, the accounting profession has long contended that an audit conducted in accordance with generally accepted auditing standards (GAAS) provides reasonable assurance that there are no material misstatements contained within financial statements. Suggest at least two (2) alternative methods that auditors can use to provide a more concrete level of assurance to investors. Provide support for your responses with examples of such methods in use.

The audit of financial statements is mandatory for publically listed entities throughout the world. The auditor conducts various tests and based on the results forms an opinion on the truthfulness and fairness of the financial statements of the company and whether or not they are prepared in accordance with the financial reporting standards and are free from any material misstatement (Freedman, 2013). The purpose of auditing is to enhance the confidence of investors and to add credibility to the truthfulness of company 's true financial performance. However, there are some dos ' and don 'ts that an auditor must take care of. For instance, anything that threatens the independence of the auditor must be avoided as it adversely affects the truthfulness and objectivity of the opinion formed.

Legitimacy in accounting practices is ensured by the check and balance of having independent auditors from registered public accountant firms reviewing financial practices. The report features eleven sections and these sections pertain to accounting overview, independence of auditors to reduce interest conflicts, corporate responsibility, financial disclosures, tax returns, criminal fraud and various elements of white collar criminal activity (107th Congress

Are businesses in corporate America making it harder for the American public to trust them with all the recent scandals going on? Corruptions are everywhere and especially in businesses, but are these legal or are they ethical problems corporate America has? Bruce Frohnen, Leo Clarke, and Jeffrey L. Seglin believe it may just be a little bit of both. Frohnen and Clarke represent their belief that the scandals in corporate America are ethical problems. On the other hand, Jeffrey L. Seglin argues that the problems in American businesses are a combination of ethical and legal problems. The ideas of ethical problems in corporate America are illustrated differently in both Frohnen and Clarke’s essay and Seglin’s essay.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit

Prior to 2002, financial statement reporting for publically traded companies within the United States was overseen with far less oversight in comparison to current reporting standards and procedures. Appropriate financial reporting is merely one element that was not occurring prior to 2002. An element of corporate dishonesty and deception existed within some the largest publically traded companies and this idea of deceitfulness was perpetuated by the executive staff of the businesses. Enron’s financial disintegration became the facilitator for the need of more rigid financial oversight, but they were not the only company that added to the idea of corporate fraud.

SAS no. 99 and AU 316 require that an auditor detect fraud if it results in materially misstated financial statements (AICPA, 2007 and PCAOB ,2012). While no other rules require the CPA or auditor to detect fraud, statements of professional conduct such as the AICPA’s Principles of Professional

SAS is a recognized company that creates business analyst software for all types of businesses. The acronym SAS stands for “statistical analysis system.” It was created at North Carolina State University as a project to analyze agricultural research. SAS’s founder decided to transform this research project into a viable company of its own, where he could provide business consulting services to large and small businesses alike. Shortly after becoming a company they were able to run software applications across all platforms of the business by using multivendor architecture for which it is known today for. SAS’s internal culture has remained the same since it first started, which has made them successful enough to spread

Auditors must inquire whether management has knowledge of any fraud or suspected fraud within the company. SAS 99 also requires auditors to inquire of the audit committee about its views of the risks of fraud and whether the audit committee has knowledge of any fraud or suspected fraud. If the entity has an internal audit function, the auditor should inquire about internal audit’s views of fraud risks and whether they have performed any procedures to identify or detect fraud during the year. SAS 99 further requires the auditor to make inquiries of others within the entity whose duties lie outside the normal financial reporting lines of responsibility about the existence or suspicion of fraud.

The analyst should present one of the popular American corporate accounting scandals. Furthermore, the presentation should point out the issues of the scandal. These problems should include the strategies of manipulating the financial statements, the involved penalties, the new laws, and regulations. Consequently, the financier should reveal the success of the actions; the government agencies responsible for monitoring these actions. Moreover, the manager should point out the powers and limitations of the financial statements, ratio analysis, and financial reporting. Consequently, the financial analyst should present effective tools that the investors should apply against corporate frauds. Corporate scandals should help the financier to resolve

Fraudulent, erroneous, and illegal acts committed by a public company, usually at a managerial or executive level, have been a very serious problem for many years and have prompted development of strict and updated regulations, such as the Sarbanes-Oxley Act, in an attempt to prevent these occurrences. Unfortunately, these new or updated regulations are not enough to prevent these acts from happening, thus not alleviating the auditors of their responsibility to detect fraud. Some methods that management and auditors can employ to prevent and detect fraud, errors, and illegal acts are: improving knowledge, improving skills,

In the last two decades, accounting scandals have become a truly global phenomenon. These scandals include the 2001 Enron scandal in the United States (Chaney and Philipich, 2002), the 2002 ComROAD scandal in Germany (Weber et al., 2008), the 2005 Kanebo issue in Japan (Skinner and Srinivasan, 2012), and the 2009 Satyam downfall in India (Bandyopadhyay et al., 2014). Moreover, these and other scandals involved the world’s most highly reputable audit firms, such as Arthur Anderson, PwC, and KPMG. Although auditors can be sued for negligence in the United States, such suits are rare or effectively absent in Japan, Germany, and India. With the biggest, most reputable audit firms failing in both high-litigation and low or no-litigation countries, it is appropriate to revisit the “reputation rationale” (DeAngelo, 1981) for audit quality and investigate to what extent reputation concern provides incentives for auditors (especially the large reputable ones), using a formal model of reputation formation.

Adapted by CH Besseyre des Horts from C.A. O'Reilly III & J. Pfeffer (2000) : Hidden Value, how great companies achieve extraordinary results with ordinary people, Harvard Business School Press, pp. 99-117. 1

The PCAOB proposed auditing standard, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion, as a result of recent outreach projects concerning the usefulness of the audit report (PCAOB 2013b). Through these projects, the PCAOB discovered that investors and other financial statement users view current audit reports as lacking in significant information. The PCAOB’s surveys suggest that investors and other financial statement users would like information on the most significant matters the auditor addressed to be included in the audit report. More specifically, they desire information that the auditor is required to communicate, to the

Cable provider Adelphia was one of the major accounting scandals of the early 2000s that led to the creation of the Sarbanes-Oxley Act. A key provision of the Act was to create a stronger ethical climate in the auditing profession, a consequence of the apparent role that auditors played in some of the scandals. SOX mandated that auditors cannot audit the same companies for which they provide consulting services, as this link was perceived to result in audit teams being pressured to perform lax audits in order to secure more consulting business from the clients. There were other provisions in SOX that increased the regulatory burden on the auditing profession in response to lax auditing practices in scandals like Adelphia (McConnell & Banks, 2003). This paper will address the Adelphia scandal as it relates to the auditors, and the deontological ethics of the situation.