Study Case

Finally, disclosure was a very relevant assertion for the Paragon audit. Paragon failed to disclose much information regarding their switch to the “earned-value” method. Paragon continued billing its customers on a cost-to-cost basis while reporting financial results in the earned-value method. Arthur Anderson should have required Paragon to remain consistent and charge its customers based on the earned-value method.

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.

Mark volunteered to help with the community arts festival; he was supporting the not-for-profit organization as he had in the past. However, he did not know his good intentions as a volunteer would cost him his job as an assistant manager. The retail store’s phone number was printed in the festival advertising in error and ticket requests overloaded the phone lines, causing loss of business and annoyed the store manager. As a result, Mark was seen as the cause of the problems and terminated.

Elder, A. A., Beasley, M., & Elder, R. J. (2014). Auditing and assurance services (15th ed.). Upper Saddle River, NJ: Pearson.

[pic]s a senior in a professional services firm, you have been assigned to plan the financial statement audit of a private company named Toy Central Corporation (TCC). In addition, the partner on the engagement has asked you to identify business risks that could adversely affect TCC’s sustained profitability, so that they can be brought to the attention of the company’s board of directors. These tasks will require you to draw on your knowledge of supply chain management, marketing, internal controls, audit assertions, and financial accounting.

Question #1: Evaluate the conduct of Peter Lewiston against the EEOC’s definition of sexual harassment.

1. The audit of Herb’s Hotdogs does pose some engagement risk but not as much risk as a larger, publicly held corporation. The way Herb is required to calculate his rent — and given Herb’s small operations— TLZ Co. may attempt to hold the auditors accountable for missing any material misstatements. Moreover, engagement risk lies, contingently, in the integrity of Herb. Since Herb is required to have an audit, this typically implies a slightly higher level of engagement risk opposed to a firm that is not required to have an audit.

Two Canadians representing Canwall, a manufacturer of wallpaper printing equipment, went to a town north of Shanghai in the province of Jiangsu, China, to negotiate a sale to a new wallpaper production company. Charlie Burton, the president of Canwall, was traveling with his Marketing Director, Phil Raines. The company had never before sold its equipment outside Canada, and the two Canadians were delighted with the warm reception they enjoyed in China.

“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).

Case Name The Smithson’s Mortgage Case Study Teams This case is designed to be conducted by a team of students. The discussion, questioning, and resolution of differences is an important part of the learning experience. Another significant advantage is the sharing of the workload in preparing the final case study report. Knowledge Background This case draws heavily on the material presented in Chapters 2 and 3 of Principles of Engineering Economic Analysis, 4th Edition by White, Case, Pratt, and Agee, particularly Section 3.4 (Principal Amount and Interest Amount in Loan Payments). To a limited extent it draws on concepts from Chapter 4 (Measuring the Worth of Investments), Chapter 5 (Comparison

Krispy Kreme has experienced dramatic growth over the past 5 years based on their income statement. Every line on the income statement has grown rather impressively. Revenues have grown from $220M to $666M and net income has grown from $6M to $57M. Based on the income statement, Krispy Kreme is doing very well.

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

Following that, the expected values for decision nodes 6 and 7 should also be calculated. The following results were obtained:

One of the risks for the 1997 audit is revenue recognition. This is an important risk for the audit because Paragon is constructing many new facilities, and how they record/allocate revenues for contracts were been questioned and are not in line with industry standards. Paragon has recorded costs on construction projects that did not exist or were not yet at the percent of completion being charged to the customer, this led to the creation of fictitious revenues. Boyd and Curbello caused the material understatement of costs by knowingly ignoring cost estimates in order to

Last but not least, investors are easy to get the control of SDB due to its