Assignment 1: Organized Process Of Auditing

Describe how you would conduct the audit process, incorporating the analytical procedures you would use to investigate selected business transactions?

Quality Objectives - The quality objectives define measurable goals relative to the company's quality management system. Requirements on the quality objectives are in ISO 9001:2008 section 5.4.1.

The Sarbanes Oxley Act is an act passed by the United States Congress to protect investors from the possibility of fraudulent accounting activities by corporation. The Sarbanes Oxley Act has strict reforms to improve financial disclosures from corporations and accounting fraud. The acts goals are designed to ensure that publicly traded corporations document what financial controls they are using and they are certified in doing so. The Sarbanes Oxley Act sets the highest level and most general requirements but it imposes the possibility of criminal penalties for corporate financial officers. The Sarbanes Oxley Act sets provisions that are used throughout numerous amounts of corporations. It holds companies to a larger responsibility and a higher standard with accounting principles and the accuracy of financial statements.

The Sarbanes-Oxley Act of 2002 was signed into law on July 30, 2002 by President Bush. The new law came after major corporate scandals involving Enron, Arthur Anderson, WorldCom. Its goals are to protect investors by improving accuracy of and reliability of corporate disclosures and to restore investor confidence. The law is considered the most important change in securities and corporate law since the New Deal. The act is named after Senator Paul Sarbanes of Maryland and Representative Michael Oxley of Ohio (Wikipedia Online).

The aim of this report is to develop an audit plan using the 2007/2008 annual reports of the WesFarmers. This report will provide an understanding of the underlying concepts of an overall audit strategy. This strategy will bring forward the direction and scope of the WesfFarmers audit plan. This report will address five major points these are as follows:

Trend analysis, common-size financial statements, and ratios are presented for the Brody Corporation in Figure 5.4. Assume that you are auditing Brody 's financial statements for the year ended 12/31/X8. You have performed tests of controls over the recording of gross sales and believe that the system is operating effectively and that 7 percent represents an accurate estimate of the increase in gross sales for 20X8 over the amount for 20X7. You should also assume that the financial statements for 20X6 and 20X7 are not misstated.

Accounting is the study of how businesses track their income and assets over time. Accountants engage in a wide variety of activities besides preparing financial statements and recording business transactions. These activities include computing costs and efficiency gains from new technologies, participating in strategies for mergers and acquisitions, quality management, developing and using information systems to track financial

The Sarbanes-Oxley Act was security law that was birthed from corporate and accounting scandals. The act’s name was drafted from Senator Paul Sarbanes and Congressman Michael G. Oxley. Oxley is a congressman who introduced his Corporate and Auditing Accountability and Responsibility Act to the House of Representatives. Sarbanes was a senator who proposed his Public Company Accounting Reform and Investor Protection act to the senate in 2002. After the public kept on demanding for a reform, both of the proposed acts passed and President George W. Bush

The Sarbanes-Oxley Act was security law that birthed from corporate and accounting scandals. The act’s name derived from Senator Paul Sarbanes and Congressman Michael G. Oxley. Oxley is a congressman who introduced his Corporate and Auditing Accountability and Responsibility Act to the House of Representatives. Sarbanes was a senator who proposed his Public Company Accounting Reform and Investor Protection Act to the Senate in 2002. After the public kept on demanding for a reform, both of the proposed acts passed and President George W. Bush

According to the textbook, Sarbanes-Oxley Act is a federal statute enacted by Congress to improve corporate governance (Cheeseman, H. R., p.344). It was passed by congress that sets policy and regulates the accounting practices of U.S corporations.

The Sarbanes-Oxley Act was placed into effect July 2002; the act introduced major changes to the regulation of corporate governance and financial practice. The Sarbanes-Oxley Act was named after Senator Paul Sarbanes and Representative Michael Oxley, who were the main architects that set a number of non-negotiable deadlines for compliance. The organization for Economic Cooperation and Development was one of the first non- government organizations to spell out the principles that should govern the corporate and issued the OECD Principles of Corporate Governance. The Sarbanes Oxley Act also known as Public Company Accounting Reform and Information Protection Act and

The Sarbanes-Oxley Act of 2002, also known as SOX in short, is a U.S. Federal Law passed by President George Bush. The main reason behind passing of the law was that the government needed improved regulations mandating upper management to confirm the reliability and transparency of the financial statements. This bill came about because of the failure and malpractice by companies such as Enron, WorldCom, Adelphia, and Arthur Anderson. These companies caused a major scandal where investors lost billions of dollars resulting in the public losing confidence in the U.S. Securities Market. “The Act mandated a number of reforms to enhance corporate responsibility, enhance financial disclosures and combat corporate and accounting fraud, and created the Public Company Accounting Oversight Board, also known as the PCAOB.”[1] The act includes 11 sections that are enforced by the Securities and Exchange Commission.

The Sarbanes-Oxley Act, or SOX Act, was enacted on July 30, 2002. Since it was enacted that summer it has changed how the public business handle their accounting and auditing. The federal law was made coming off of a number of large corporations involved in scandals. For example a company like Enron was caught in accounting fraud in late 2001 when the company was using false financial statements. Once Enron was caught that had many lawsuits filed against them and had to file for bankruptcy. It was this scandal that played a big part in producing the Sarbanes-Oxley act in 2002.

After major corporate and accounting scandals like those that affected Tyco, Worldcom and Enron the Federal government passed a law known as the Sarbanes-Oxley Act of 2002 also known as the Public Company Accounting Reform and Investor Protection Act. This law was passed in hopes of thwarting illegal and misleading acts by financial reporters and putting a stop to the decline of public trust in accounting and reporting practices. Two important topics covered in Sarbanes-Oxley are auditor independence and the reporting and assessment of internal controls under section 404.

An audit is based when management prepares the financial statements, maintain internal control over financial reporting, and provide relevant information and access to the auditor.