How To Conduct An Audit Of The Ending Cash Balances For Temple Co.

First and foremost, the accounting system used should be updated. The case stated that the system was 30 years old and that prior accounting period transactions could not be locked down, which enabled internal control processes to be bypassed. Enhancing internal

E. Why does the auditor not use the same tolerable misstatement or percentage of account balance for all financial statement accounts?

It should also investigate if the employees in the banks are corrupt or have relation with the cartels.

ABSTRACT: You are auditing the books of the Tallahassee BeanCounters (TBC), a minor league baseball team in Tallahassee, Florida. During your audit the teamís owner, Franklin Kennedy, approaches you and offers an additional fee if you will quietly investigate the possibility of fraud within the firm. Mr. Kennedy reports that he received an anonymous tip and, based on that information, believes that someone within the firm could be perpetrating fraud. Your task is to use the information given here (the financial books and back-up documents) as a starting point for your

With different industry definitions and viewpoints, fraud can be a tough issue for audit committee members to grasp for oversight purposes. The legal obligations of audit committee members have intensified because their standard duty of care and loyalty to the entity has increased in light of management fraud activities.

3. Substantive tests procedures: The audit team should perform substantive tests on Smackey’s accounting transactions and

Grant Thornton should be held liable for its reckless negligence because it ultimately prolonged Keystone bank’s ability to continue to partake in fraudulent activities. If the accounting firm would have held itself to GAAS, generally accepted as the minimum standard of professional conduct in performing an audit, Thornton would have known to exercise “heightened skepticism” during this high risk of fraud. Secondly, GAAS required written confirmations from third parties servicing assets in regards to a bank’s balance sheet. Not only did Thornton fail to obtain this written requirement, it also recklessly relied on an oral statement. GAAS also required in a high risk audit that monthly remittances of interest income on assets being serviced by

The one pattern within the data that appears to be inconsistent yet if the auditors had established an internal control systems would be Monus the founder moving so freely throughout every aspect of the company with no one checking his movements. From choosing what properties to purchase to purchasing supplies. In any company there should be segregation of duties. For example, the person making the deposits should not be the person writing the checks. Had there been stipulations made it would not have been so convenient to commit the

1a) What should the auditor consider when determining whether an account should be considered significant?

I’d suggest to her to have her employees trained for the prevention and detection of fraud and give her the important internal control needed to prevent and detect fraud. The preventive control would be to have segregation of duties or dual custody to ensure that everything is accurately recorded and presented, another is she should implement a system of authorization to verify all transactions, inflows and outflows of cash, are recorded properly and have physical safeguards and not have one employee have unlimited access to everything as this will probably lead to theft and manipulation of data. For her detective controls, the organization should have independent checks to see if there is any suspicious activities or information found within the company and lastly, she must have documents and records of everything as this will be used as evidence when fraud is detected. (Albrecht et. al 2014, p.

It is not possible for the auditor to be 100% certain that he/she has obtained all evidence regarding all significant related party transactions, especially if management is trying to conceal something. However, the

The task given to me was to take over and start managing the ClinCard system that our company was using to pay subjects their stipends. Training to learn the ClinCard system was my first step, I requested training on the system for approving and denying payments and running reports. During this training, I immediately noticed some items of concern and asked my superiors if I could also audit the prior transactions and the issuance of funds to our ClinCard accounts. The results of my audit revealed that the issuance of funds that we sent to our vendor for the ClinCard accounts did not match the deposits to our accounts and that the vendor had the settings set rather high for automatic approving payments being paid to subjects without verification

Under the audit and examination committee, they have to regulatory and oversight the conduct risk of the entity, in addition, they have to disclose the security risk, operational risk and technology risk. Moreover, audit and examination committee required to oversight the internal audit function, external auditor performance and disclosure framework for financial and risk reports prepared for the board, management, and third party agencies. The committee should provide greater centralization of review and oversight and augment reporting to the board of the type of issues that contributed to breakdown in Wells Fargo’s sales culture.

When using substantive analytical reviews, an auditor must first develop their own expectation of what they think the account balance should be and once developed, the expectation is compared to what the recorded amount is. This technique is used to identify any possible material misstatement. Significant differences have to be investigated and supported with evidence. This process must be done with exact precision and a high degree of accuracy.

Later in September, banks again reported transactions to the company after which an external audit agency, SISA Information Security was called to conduct a forensic audit on the case. (Source: Deccan Herald, Oct 20, 2016)