Biggest Scandal in Canadian History: Hrdc Audit Starts Probity War

An “audit failure” is a situation in which a professional auditor fails to detect a material error in the financial statements of the company they are auditing. The audit failure in the situation of Rita Crundwell the failure was exacerbated by the fact that the auditors continually signed off on the misstated statements for years. Crundwell is responsible for many of the deficiencies mentioned, such as the missing funds and the incorrect invoices. However, she is not the sole person responsible for this fraud. The lack of internal control is to blame, and this cannot be placed on a single person. The government should have separated duties and used

Appendix A.2 also lists several factors that could provide opportunities for management/employees to commit fraud. One factor that could lead to fraud is if, “There is ineffective monitoring of management as a result of: domination of management by a single person or small group without compensating controls.” The auditors should have taken notice of the lack of controls and segregation of duties with respect to Phar-Mor’s

Collection of information is essential to support the major functions and activities of the organisation. To ascertain this it is essential to have regular reports of the organisation and to do this you need regular financial reports and audits. A true vision of the organisation will give any management a better understanding of their situation and will thus help them to make a good viable decision.

The auditor must remember that all information collected during the audit needs to be sufficient enough to further the audit process. The information must not only possess the two qualities, relevance and reliability, but it should also test various assertions. For instance, in the audit of Walmart, the auditor should make an attempt to acquire information such as financial statements from the company’s bank, as opposed to acquiring the statements from Walmart’s management. Taking such crucial information from Walmart’s management will put the reliability of that information into question. It is possible that management may manipulate the financial statements, so that they are more appealing to the public and investors. Management may do things

This course is the first in a two-part series that deals with auditing a company 's financial reports, internal controls, and

) There was a lack of adequate cut-off procedures to ensure the timely recording of certain period-end accruals. This resulted in an audit adjustment of $3,578,000. The benchmark for overall materiality is $3,508,000, I would consider the audit adjustment of $3,578,000 a material misstatement. Control environment, principle 2 the board of directors and management exercise oversight of development and performance of internal controls. Due to the severity and material weakness of lack of adequate cutoff procedures to ensure timely recording of period end accruals. Management and the board of directors should evaluate performance of internal control activities including adherence to standards of conduct and expected levels of competence. In

The 1990’s in Canada proved to be a relatively quiet and peaceful time in Canadian History. With this era, came the new, or sometimes already known, historical figures to shape the economy, government and the well being of the people during the time. From 1993-2003 came the rule of Prime Minister Jean Chretien, a leader from who was born in the small town of Shawinigan, Quebec. He proved to be a strong leader with his determination and strive to be “‘“a fighter. He must win.’” as his friend Jean Pelletier described him (Bothwell, Marshall & Koch, 2015). Under him, came Paul Martin who after rivaling against him in the fight for liberal leadership, was appointed Finance minister. He too seemed to have quite the influence of the people and proved

Opposing the belief that a dominating leader is running Canada, Barker brings up several key realities of the Canadian government. He gives examples of several “… instances of other ministers taking action that reveal the limits prime-ministerial power,” (Barker 178). Barker conveys the fact that Canada is not bound by a dictatorial government, “…it seems that the prime minister cannot really control his individual ministers. At times, they will pursue agendas that are inconsistent with the prime minister’s actions,” (Barker 181). Both inside and outside government are a part of Canada and they can remind the prime minister that “…politics is a game of survival for all players,” (Barker 188). Barker refutes the misinterpretation of the Canadian government by acknowledging that a prime-ministerial government existing in Canada is an overstatement.

Notwithstanding the many shortcomings of the Senate, it is an important institution that serves an essential purpose. Although it is rarely commended publicly for its accomplishments, other public servants and academics praise the Senate “for the breadth and quality of its investigative and scrutiny functions in committee” (Smith, 2003). In order to understand the Senate, one must distinguish the roles of the upper and lower houses. While the House of Commons serves the elective function of making or unmaking government “the Senate is not a confidence chamber” and thus serves a distinct, yet equally relevant role (Smith, 2003). The Senate, and bicameralism more broadly, was instituted as a constraint on government. Its justification “rests on obstruction: rather than empower, it restrains government” (Smith, 2003). This impediment to the unchecked power of the House of Commons justifies the preservation of the Senate as an institution. While some consider the Senate unnecessary or redundant, it is an essential element of Canadian government. However, despite its significance, it is not particularly well liked and some consider it to be the “most criticized institution of government in Canada” (Frank, 1988). For over sixty years, the issue of Senate reform or abolition has been inherent to Canadian political discourse (Frank, 1988). Given the importance of the Senate in Canadian

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate (Louwers & Reynolds, 2007). We believe that the audit evidence obtained is sufficient and appropriate to provide a reasonable basis for our opinions.

In 2011, three legal and constitutional scholars, Peter Aucoin, Mark D. Jarvis and Lori Turnbull set out to write a book detailing what they believed to be obvious and egregious errors in the way in which the current form of responsible government as it was practiced in the Canadian federal government, fell short of operating within basic democratic parameters. Canada has a system that is based one the Westminster system, in which its the Constitution act of 1867 is influenced by British principles and conventions. “Democratizing the Constitution reforming responsible government” is a book that makes an analysis for the reform of responsible government in Canada. The authors believe that from the unclear rules, pertaining to the role and power of the prime minster foresees for a failing responsible government. In this essay the functions of the government , conventions of the constitution, the a proposal for reform will be addressed.

In addition to accountants providing many useful numbers that signal a company’s performance, they also prepare many useful documents and a code of ethics to make sure that all stakeholders have a clear picture on the business’s financial position. For instance, journaling is what accountants do after every transaction. These entries of what is exchanged in a business provide evidence that money deserves to be in a certain account. Especially since every journal entry needs a corresponding document that proves the record did happen, journals can be used by executives to see what really occurred in case a number in an account looks wrong (Schneider). It is also used when a government official suspects that the company is unfairly representing itself to either indict the business or prove its innocence. Journaling illustrates the importance of accounting since everything is documented and has proof for existence in the case of errors. One thing that journals go hand-in-hand with is the general ledger. This is the document that actually lists each individual account and the amount in it. It organizes the overall picture of every entity a business comes in contact with so that every important number can be put neatly into a financial statement.

The chief executive of the company was closely working with the vendors whose confirmations were vital in the auditing work and hence they could have submitted false confirmations. The auditing firm established a national risk management program for its clients and so national reviews were done to identify the high risk items in the financial statement. The vendor allowances were particularly high but they were not documented. As such, the auditors were supposed to demand for the documentations and compare them with the real figures. It is however noted that most of the documentations received were non-standard and this could have led to a different audit report given that vendor allowances were earlier identified as a high risk area. Inventory management was found to be poor especially in the allowances for inventory reserves. The audit firm was therefore obliged to carry out a thorough evaluation of the inventory reserves and determine whether it was reasonable. The valuation was also supposed to include all classes of inventory but for the case of the company, the evaluation excluded instances where no sales had been made. Hence, this evaluation could not accurately represent the position of the inventory reserve in the company. (Waters,2003)

With the avalanche of accounting scandals that have rocked the public, people tend to have increasingly high expectation that auditors are accountable for detecting all frauds, while the standards require auditors to provide reasonable, but not absolute, assurance. The purpose of the report is to discuss the accountability of auditors in detecting fraud by analysing a $16.9 million fraud of Otago District Health Board (ODHB) perpetrated by Swann and Harford from 2000 to 2006. The report will explain the event, the fraud, the stakeholders, the role of auditors and the current situation.

The audit committee’s responsibility was to look over the accounting and financial reporting process as well as the financial statement audits; appoint, compensate and oversee the external auditor; and to ensure that the company has a whistleblower program. (p. 52) At first glance the committee could notice that something was not right with the company’s financial records. But nothing was done and nothing was said.