Essay on Case 3.1 - a Day in the Life of Brent Dorsey

Owens & Minor is a distributor of surgical and medical supplies to hospitals and other health care facilities. Due to changing demand from customers, the company is facing increased operating costs, which has resulted in lower profit margins and even losses. In 1993, O&M recorded an $18 million profit, which was reduced to a loss of $11 million in 1995. The entire industry is experiencing similar difficulties. In an effort to resume profitability, O&M is evaluating alternatives to “cost-plus pricing”. Cost-plus pricing does not reflect the true cost of the services provided by O&M. Customers are demanding more of O&M while

John Cain met employee Oliver Dean Emigh (“Emigh”) and owner John Roberts at the Bargain Barn in March of 1998. John Cain (“Cain”) was a self-employed computer consultant. John Roberts (“Roberts”) explained to Cain that he needed documents typed for Republic of Texas (“ROT”) legal matters due to being a member of the ROT. Cain met with Johnie Wise and Roberts the next day at the Bargain Barn to discuss computer related topics. Cain became worried about Roberts, ROT affiliation when he went to work for Roberts on a daily basis. Cain told the Federal Bureau of Investigation (FBI) about Roberts’ request for secretarial assistance on ROT matters

Case 12-02 To Recognize or Not to Recognize, That Is the Question Shakespeare Inc. (“Shakespeare” or the “Company”) is a privately held book printing and publishing company with a December 31 year-end. The summary balance sheet as of December 31, 2010, included: Current assets Noncurrent assets Total assets Current liabilities Noncurrent liabilities Total liabilities Total shareholder equity $ 6,500,000 28,250,000 $34,750,000 $ 4,500,000 13,750,000 $18,250,000 $16,500,000

To conduct the audit, the firm must acquire sufficient understanding of the internal control processes to help determine the nature and timing of the audit. However, the audit is not designed to identify deficiencies in internal control or provide assurance. The firm will make the audit committee aware of any significant deficiencies that come to Anderson, Olds, and Watershed’s attention during the audit.

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.

If I was in Hamilton Wong’s position, I think I would report all of the time I spent working on the Wille & Lomas audit, even if it exceeded the budget. As an accountant, my ethical responsibility is to be honest and have integrity and by not reporting the actual amount of time I worked on the audit, I would be lying. I will be losing my honesty and integrity if I was not to report the actual amount of worked I did. I would first have to evaluate why it is that I am

Build the management-research question hierarchy, through the investigative questions stage. Then compare your list with the measurement questions asked.

However, from the ethics point of view, CTT Associates should not assign Jack to perform audit work in Top Enterprise. According to the fundamental principle of ethics issued for Professional Accountants, Jack might not be able to perform objectivity. In

He is also under pressure of his client and due to this pressure he is sacrificing his auton-omy and sovereignty as public auditor. In doing such act he is putting public

Auditors should plan the audit so that the engagement is conducted in an effective manner.

When it comes to the issue of ethics, some people wrestle immensely. You have two options here, the first option is to listen to your supervisor, stop looking into the top-level journal entries, and finish up the audit. The second option is to do what is ethical and keep pushing the issue until someone listens. Although you could choose to do what your supervisor says and stop asking questions and “chasing shadows” that would be the wrong answer. . In this instance, you have to do what is outlined in PCAOB. As an auditor, you are required to act with independence and objectivity. PCAOB ET Section 102 states, in the performance of any professional services, a member shall maintain objectivity and integrity, shall be free of conflicts of interest,

Peter should have addressed the issue much sooner instead of waiting until the project was so far behind before he decided to take action. Although Peter did not get the outcome he desired, it is evident that the move the out Olds on Crosby’s project full time was better for the company and better for Olds. The consulting project that Crosby was in charge of sounds like it is a bigger deal for the firm than the audit so it in the company’s best interest to have their best people on that project. Since Peter was getting substandard work from Old’s he should make the concession to give up Olds in return for a suitable replacement and could ask for some type of

There are a number of ways management can work to discourage accountants from underreporting time. One way is by “Preventing removal of workpapers from the fieldwork site and preventing unsupervised after-hours work at the client’s or firm’s office . . .” (Lightner, et. al., 1983) Another way is to counsel supervisors “on the importance of ensuring that staff report all chargeable time and [supervisors] should be taught how to spot and how to prevent underreporting.” (Lightner, et. al., 1983) In addition, the audit firm can “provide its staff with an alternative to underreporting, such as encouraging them to report problems that arise in meeting the budget.” (Lightner, et.al., 1983) “Staff should be informed of the purpose, use and importance of time budgets in firm management and of the firm’s desire to reconsider budgets that aren’t appropriate for an engagement or that are improperly prepared.” (Lightner, et. al., 1983) Another suggestion is to “avoid time budgets at the staff accountant level. When budgets

7. OVERVIEW AND ANALYSIS: A senior associate at Richard, Wood and Hulme LLP (RWH) was amazed at the speed with which the audit team for an important client for the firm was rapidly falling apart. Two members had just been fired presumably because they did not pass their chartered accounting qualification examination; team morale had become non-existent; there were difficulties in completing the engagement due to lack of preparation from both the RWH and the client; there was a question about the commitment of particular individuals; and with the audit falling behind schedule, the senior associate perceived an absence of strong leadership from the partners of the firm. The senior associate did not understand why the team had been so unfocused from the start of the engagement as prior years’ engagements had been quite successful. He was not sure how to proceed. What would he tell the client? What should he do to keep this audit on track and keep the team together?

I have prioritized high risk and critical audit sections and have planned my audit in an organized and methodical manner. For example, I prioritized the audit of Related Parties disclosure and the client’s application of streamlined reporting in 2016/17 in accordance to the updated DTF reporting guidance while planning ahead for other audit sections based on the time allocated. By performing reviews on my working papers prior to submission, this has allowed me to assess and amend my working papers to ensure that all necessary information is present and has been thoroughly analyzed and concluded according to the audit procedures set. With this approach, I have completed my assigned audit tasks with quality in a timely manner. I then take accountability by addressing any feedbacks received from client and audit team.