The Role Of Auditing Standards On The Agency Theory And Review Common Benefits

Date back to 1960, a Hungarian immigrant Larry Adler founded an insurance company named FAI Insurance. After he dead in November 1988, his son Rodney Adler was inherited the company become Executive Chief by the board of FAI Insurance. After struggling in the stock market crash 1987, in September 1998 HIH Insurance has takeover bid $280 million cash and shares of FAI Insurance without due diligence. After that, HIH sold out FAI’s assets, several companies and one hotel in New York about $450 million. At that time, Adler became a director of HIH. However, after a magnate loose in both London and US insurance, HIH almost collapse in March 2001. In that situation, HIH try to sell FAI business to get much-needed cash. It’s sold $320 million to

Mr. Kazakos reported these transactions to HRSA during a meeting on February 7, 2017. On February 8, 2017, the Organization received a preliminary audit finding from HRSA that led to the suspension of Ms. Haar’s employment. Later that month, California’s Department of Health Care Services (“DHCS”) reported that 100% of all state based health insurance payments to Horisons were suspended and Horisons’ license to operate was suspended and deactivated. Furthermore Ms. Haar and Horisons are being investigated by the U.S. Attorney’s office and the California Department of Justice for alleged fraud and

Arthur Andersen (AA) contributed to the Enron disaster when it has failed to the management by failing to have Enron establish and enforce its own internal control. There has been flaws to AA‘s internal control. There has been assumption that AA partners were too motivated by revenue recognition thus, overlooking several criteria when providing their services to Enron. Additionally, AA also recognised the retention of audit clients as vital and a loss of any clients would be disadvantaged to an auditor’s career. In AA internal control, the person who is able to make most of the decisions is the person who is most concerned about the revenue or losses of the client’s company.

In 2015, the Legislative Joint Auditing Committee audited Hector School District. In the Summary of Auditor’s Results and Financial Statement Findings, the auditors did indicate a material weakness in internal control. Here, the specific requirement noted that management is where the responsibility falls for implementing sound accounting policies and maintaining internal control over financial procedures that are consistent with their own assertions found in the financial statements. The stated condition for this material weakness was that the district failed to segregate financial duties among qualified employees. Instead, one sole employee was in charge of all of the financial accounting duties. Thus, the school

Clarified statements on auditing standards (SAS) are issued by the Auditing Standards Board (ASB). SAS #122-127 were effective for audits ending on or after December 15, 2012. The ASB has completed the Clarity project with the issuance of SAS # 128 in February 2014, effective for audits of financial statement for period ending on or after December 15, 2014.

JPMorgan Chase Bank is a publicly traded company and uses an external-independent auditing firm, PricewaterhouseCoopers LLP, to provide an annual audit. JPMorgan

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.

HealthSouth was found by Richard Scrushy in the year 1984 and was called Amcare, Inc. It opened its first facility in Arkansas and later on that year another one in Birmingham. In 1985 the company changed its name into HealthSouth Rehabilitation Corporation, in 1990 the company expanded to 50 facilities around the US.

This case study will analyse the ethical dilemmas faced by David, audit manager at C & A who is hired to do the financial year-end audit for MAL. The six step ethical framework will be adopted to gain an understanding of principles and obligations for analysing the situation faced by David and arrive to a professional and responsible resolution.

The company adopted an aggressive acquisition strategy, a growth-at-all-cost attitude and a culture of never to give “bad news”. This resulted in conflicts between profit maximization and sound corporate governance procedures. The cause of the collapse may also be due to the lack of independent directors to the point where the directors were also the former partners of their company’s auditors, Arthur Andersen. On a whole, it was more of a lack of company monitoring, poor system and gross mismanagement which lead to the Australia’s biggest failure.(LongDog &

This report sets out to review corporate governance at a private company, namely, Paramount Insurance Company. The specific objectives were to identify the relevant codes the organisation follows, why they are important and review the structure, process and

Risk, compliance and governance activities are by nature interconnected and rely on common sets of information, processes, technology and methodology. The traditional approach to governance, risk and compliance relies on working in silos and using separate point solutions to address each assurance group’s requirements. This creates a fragmented approach

Needed for the Houston office of Andersen, an audit partner that understands the role of being a "public watchdog" with "ultimate allegiance to the creditors and shareholders" . Arthur Anderson abandoned its roles as independent auditor by turning a blind eye to improper accounting, including the failure to consolidate, failure of Enron to make $51million in proposed adjustments in 1997, and failure to adequately disclose the nature of transactions with subsidiaries . Another example is Lord Wakeham joined Enron as a non-executive director in 1994 and also sat on Enron's audit and compliance committee. In addition, Andersen also provides internal audit service to Enron, which in fact impact

The purpose of this paper is to highlight the role of external auditing in promoting good corporate governance. The role of auditors has been emphasized after the pass of the Sarbanes-Oxley Act as a response to the accounting scandal of Enron. Even though auditors are hired and paid by the company, their role is not to represent or act in favor of the company, but to watch and investigate the company’s financials to protect the public from any material misstatements that can affect their decisions. As part of this role, the auditors assess the level of the company’s adherence to its own code of ethics.

The lack of independence for external auditors will lead to the neglect of auditing risks (William R.K., 2003), which are the main reasons for the failure of certified accountants and professional accounting organizations. The consequence of the external auditors deprived of independence would be very serious. And there are many cases, which aroused by the failure of external auditors and most are related to the lack of independence. One famous example is the bankruptcy of Enron and the role played by its external auditor, Arthur Andersen (Todd, S., 2003). Arthur Andersen was once one of the biggest accounting companies in the world, and was canceled for the involvement in the Enron bankruptcy scandal.