Sofitech Computers Module 1 4

In accounting there is much to be learned, about the financial aspects of a business. In the past five weeks I have learned the importance of financial reports and how they relate to the success of an establishment. These reports may include balance sheets and income statements, which help accountants and the public grasp the overall financial condition of a company. The information in these reports is really significant to, managers, owners, employees, and investors. Managers of a business can take and deduce financial

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

As recognized by leading research and consulting firms with knowledgeable, skilled management, advanced state-of-the-art IT affords extraordinary opportunities for greater efficiencies, cost reduction, higher productivity, customer satisfaction, and profitability. Sophisticated IT applications realize their full potential with highly specialized technical knowledge and management skills readily available only in smaller firms focused primarily or exclusively on such applications. Through State of the art IT Security Management (ITSM) processes such as threat management, auditing, encryption and customer education will be used to prevent misuse and/or abuse of Finman’s IT resources or services.

CAS 300 requires auditors to their audit using a risk based model where the nature, timing and extent of audit procedures are based on the assessed risk of material misstatement. Pickett (2006) argues that for audits to be effective and efficient, much of the audit effort should be focused on areas that are considered to pose the highest audit risk. Additional audit procedures should be linked to individual audit assertions whereas other audit procedures need to be performed as and when needed. Thus, for an audit plan to be put in place, it is necessary for an auditor to come up with a risk profile of the client comprising an understanding of the business operating by the audit client, assess business risk and also perform its preliminary analytical review.

#3. Inherent Risk Factors; audit planning decisions. Businesses that face extreme competition are susceptible to many inherent risk factors – the measurement of the auditor’s assessment of the likelihood that there are material misstatements in an account balance before considering the effectiveness of internal control. Complex valuation issues and related party transactions are two such factors that would affect audit planning decisions. Valuation issues may lead the audit team to request more evidence, if they choose to accept the audit at all. Risks such as inventory turnover leading to potential misstatements of inventory, costs of goods sold, or obsolescence of inventory may influence the audit firm’s decision to hire outside specialists to assist in the audit. Another inherent risk factor, client business risk (competitive

This paper analyzes a fictional privately held company, Smackey Dog Foods, Inc. as well as its fictional auditor, Keller CPAs. The analysis is based on a Keller Graduate School of Management scenario and a series of questions developed to address concepts learned throughout the External Auditing course. Concepts include: SEC influence, audit planning, audit stages, internal controls, confirmations, sample size, obtaining evidence, inventory, warehousing cycles, Professional Rules of Conduct, and auditor’s legal liability. Each of these auditing concepts are explained and then applied to the scenario between Smackey Dog Foods, Inc. and Keller CPAs.

As I was reviewing the financial statements of 2013, I have found that, the company has more volatile industry which makes the investors to buy and sell. Through their improvement globally, their oil sands had become effective and efficiency through the public. Business risk of this client will be very high since the energy sector is more volatile, especially the oil sands of energy sector. Since Suncor has the lowest prices and operating costs, they will face huge competition within Canada and internationally. Such risks will affect the auditor’s assessment of audit risk for this client. Therefore, the auditor can

“Keystone Computers & Networks, Inc. (KCN) is a company that sells and installs computer workstations and networking software to business customers. The CPA firm of Adams, Barnes & Co. has audited the financial statements of KCN for the past three years. The case illustrates selective audit planning working papers that were prepared by the staff of Adams, Barnes & Co. for this year’s audit.” I will be listing the order in which I would perform this audit and I will decide if I should select the client and focus on the key audit objectives while applying the audit risk model.

When conducting the audit for Persephone Inc, there are two possible alternative audit approaches: substantive testing or combined testing. Comprised of tests of details and substantive analytical procedures, substantive testing inspects the financial statements to determine if there are errors present. Alternatively, the combined approach relies on both the internal controls that are in use by the company, in addition to substantive testing to catch misstatements. Consequently, companies who are lacking definitive controls utilize substantive testing; it is also useful for companies where the controls are not properly implemented or functioning. While Persephone Inc. has numerous controls set in place, and is looking to further strengthen

“Audit committee members or their agents may proactively examine areas, functions, and personnel where collusive fraud risk is reasonably likely to be perpetrated,” (Zmags). The search for fraud, even if performed in the same location multiple times, may continue until the audit committee feels confident that they have ruled out the probability that fraud is prevalent. One of the biggest risks of fraud is management override of controls, requiring the extensive search for risk in, “journal entries and other adjustments and reviewing accounting estimates for possible biases that could result in material misstatements,” (Nysscpa).

Accounting transactions are professional occasion that has either a positive or negative budgetary impact on the financial statements. One impact of transactions in a financial statement will increase or decrease the accounts contingent on the transaction that has taken place. The history of revenue that has come or gone from the business will be shown on both financial statements and accounting transactions. Many businesses make several transactions daily. Errors can have a negative impact on financial statements, because the facts come from the accounting transactions

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

When engaged in auditing a public firm, such as Apollo Shoe Inc., an auditor must determine when to trust in the company’s internal controls and when to ascertain auxiliary testing methods are obligatory to analyze control risks. The sales and collection cycle is rather a substantial fraction of the audit because this unique segment employs a multitude of documentation and records ranging anywhere from customer and sales orders, shipping documents, credit memos, and general journal entries; therefore, a working

For example, FFC relies on bar code scanners and credit/debit card readers. To maintain its competitive edge in its market area, FFC recently implemented a fingerprint bio-coding payment system in all of its stores. This new systems implementation required that FFC change several of its general-ledger application programs; in particular, those related to its cash receipts processing. FFC does not use any outside service organizations to provide its IT services. Sophie Ewing, the audit senior who heads up your team, decided that because of FFC’s complex and sophisticated IT processing, an IT General Control (ITGC) review is mandatory to meet SAS 109’s risk assessment procedures and SOX Section 404 Management Assessment of Internal Controls requirements. You know that an ITGC review is very important because ITGCs provide the foundation for reliance on any financial information FCC’s systems produce. Your evaluation will affect the financial auditor in assessing the risk of material misstatement in FFC’s financials, and consequently, the audit plan. At your first team meeting, Sophie announced that your firm’s network security specialists would review the technical issues related to FFC’s internal controls. They will evaluate FFC’s operating systems, its telecommunications software, and its network configuration and firewalls. In preparation for the meeting, Sophie encouraged you to review the key provisions included in SAS 109, SOX Section 404,

This research paper focuses on how IT audits are done and how they can help in assisting an organization in its regulatory compliance effort by identifying information security weaknesses prior to an external audit. The key players and their roles are defined, as well as organizational, results-based, point-in-time systems and extended-period audits. This leads to a natural question. In this new world of connected GRC, what is the role of internal audit compared to compliance? Where do these roles remain separate and where do they share responsibilities? How can these professionals work together to drive business value?