Auditing Reflection

Nonetheless, as we all know the recession and economic changes affecting the women’s apparel industry during late 1980s and early 1990s. As a consequence, it is an indicator that Leslie Fay suspected to overstate its inventory in order to overstate its current asset. According to Account Receivable and Inventories two accounts, there is 10.8% increase in Leslie Fay’s current asset from 1987 (60.9%) to 1990 (71.7%). As far as I can see, Account Receivable and Inventories are the two main accounts which caused an unusual and inconsistent gain in total current asset in four years. Thirdly, there is unusual gain in PP&E account from 1990 (6.8%) to 1991 (9.9%). However, other accounts under Current Asset such as Inventories and Accounts Receivable started to decrease in 1990 and PP&E is the only account that increased 3.1% in one year. Also, I cannot find any equipment and estate purchased by Leslie Fay from 1990 to 1991. As a result, I suspect it might have fraud happened in Leslie Fay. Additionally, there is an unusual decrease in Long-term Debt account from 1990 to 1991. More specifically, the Long-term Debt decreased less than 10% from 1987 (38.2%) to 1990 (29.6%). While, it decreased 8.3% from 1990 (29.6%) to 1991 (21.3%) in one year. As far as I can see, this is an unusual and inconsistent decrease of Long-term Debt and it indicated Leslie Fay suspect to understate its

Organizational misconduct is the chief cause behind corporate accounting scandals. The trusted executives of the corporation participation in actions during a scandal are corrupt and illegal. In the United States, the Securities and Exchange Commission (SEC) is typically the government agency that investigates such scandals. One of the most notorious corporate accounting scandals in the United States is the HealthSouth Corporation scandal of 2003. HealthSouth Corporation is one of the United States largest health care providers with locations nationwide. A deeper inspection of the HealthSouth scandal is needed to understand how it transpired by assessing how it was executed, the accounting issues and root of the issue, how it was exposed, the results to the company and its officers, and warranted ramifications as an outcome of the scandal.

13. Use the following data to determine the total dollar amount of assets to be classified as property, plant, and equipment. Eddy Auto Supplies Balance Sheet December 31, 2014 Cash $84,000 Accounts payable $110,000 Accounts receivable $80,000 Salaries and wages payable $20,000 Inventory $140,000 Mortgage payable $180,000 Prepaid insurance $60,000 Total liabilities $310,000 Stock investments $170,000 Land $190,000 Buildings $226,000 Common stock $240,000 Less: Accumulated Retained earnings $500,000 depreciation ($40,000) $186,000 Total

2. For the most recent year, what is the amount of inventory in the balance sheet? What does this amount represent?

This programme accentuates the enhancement of the CA (SA) professional by persistently developing the standards governing the CA (SA) profession. The programme also focuses on legal and corporate governance; which aim at aligning social and economical standards; secures that the CA (SA) profession is accountable and affiliated with the interest of individuals; corporations and the society (South African Institute of Chartered Accountants, 2014). These regulations also safeguard the use of the accounting standards, as will be inspected in the succeeding

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

This research paper is being submitted on March 10, 2013, for Tiffany Krogman, A340/ACG3085 Section 03, Advanced Auditing Concepts & Standards.

The Auditing Standards Board (ASB) redrafted the standards for clarity and reorganized all of the auditing sections (AU) into new one adding C after (AU-C), bringing both significant and subtle changes. For some of the standards only the format changed but others significantly impacted the auditor’s work. This project was very important for the globalization

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.

17. If common stock is issued for an amount greater than par value, the excess should be credited to

A review and an audit report are both a form of an attestation engagement. A Review, however, is less in scope so it provides a moderate level of assurance on the financial statements. It is considered a “sniff” of an audit, which comparatively provides reasonable assurance that no material misstatements occurred. Since a review deals with a limited scope, it does not provide the basis for expressing an opinion on the presentation of the

Note: Answer the questions as comprehensively as possible. Reference to Auditing Standards, your textbook, and other relevant authoritative sources is expected where appropriate. Even where some of the questions are quite general, try as much as possible to relate your answer to the case.

It highlights the importance of auditors applying sensitive and ethical judgments in all their engagements. Members have the responsibility to collaborate with each other to improve the art of accounting, as well as to maintain the public’s confidence. The auditor’s responsibilities are essential to an effective audit process because through planning, auditors should to communicate with each other, be very organized and discuss what and how to do things in order to serve the public. One of the most important parts in auditing is planning, for that reason responsibility is a must.

This paper contains the summary of the details and results of the audit tests on

Rittenburg, Larry. Johnstone, Karla. Gramling, Audrey. (2012) Auditing: A Business Risk Approach 8e. Mason: South-Western, Cengage Learning.