Ussc Case

The United Way of America and United Way International are part of a federation of nonprofit organizations formed by caring people to serve the needs of their communities. They bring neighborhoods together and facilitate measures toward making a difference to better the world. They have over 1,300 local United Ways in the United States and over 3,000 United Way organizations operating in 45 countries. They raise funds and distribute them to the most effective local service providers, build strong alliances, and coordinated volunteer support among charities. An obstacle that United Way needs to overcome is how many people want to have their donation used in a specific manner. Some people are not interested in giving their

Trend Analysis is attempting to spot a pattern in information that is collected. Trend analysis is mostly used to predict future events, although another good use is to review and estimate the situation of past events.

The auditor must identify in the auditor’s report those circumstances in which accounting principles have not been consistently observed in the current period in comparison to the preceding period.

What are some situations that would require modification of the auditor’s opinion related to going concern?

1. There are numerous differences between performing a review and actual audit on the financial statements, but the major one is that the review does not contemplate obtaining an understanding of internal control structure. Also, a review does not assess control risk, tests of accounting records and responses to inquiries by obtaining corroborating evidence through inspection, observation or any other audit procedure. It can point out significant matters of the financial statements but does not provide assurance of their accuracy. The issue with ZZZZ Best case is that the auditors review was not sufficient enough to review any misstatements on the financial statements. Ernst & Whinney never questioned the internal control, reviewed

Secondly, although the audit might have been in its final stages, the fact that there had already been a sticking point between the auditors and CMD as to the validity and accounting procedures of the companies write-off’s of accounts receivable, once the audit team was made aware of the pending lawsuit of CMD by one of its clients for the exact same reason, they should have reconsidered their position on the evidence (suspension of judgment) and made sure to review that evidence before issuing an opinion.

SNC was not able to calculate an accurate azimuth before the time was up. SNC gave a thorough 5 paragraph order that included local terrain, Direction of Attack, enemy actions in the Area of Operation, current operations of the Battalion activities in the local area, a detailed tasking statement to each fire team that out lined fire team mission requirements, and Coordinating Instructions that included maneuvers for both movement to the objective and upon contact. SNC was not confident as he delivered his 5 paragraph order as he stumbled and stuttered and maintained little or no eye contact as he read from his notes. SNC did not demonstrate an understanding of the time-constraints during movement from the Assembly Area to the Objective. SNC

material, but don’t really affect the financial statements then the opinion given by the auditor may be a qualified opinion with explanations; if the limitations are so material that the financial

1. What audit procedures that, if employed by Ernst & Whinney during the 1981 USSC audit, might have detected the overstatement of the leased and loaned assets account that resulted from the improper accounting for asset retirements?

Ernst & Whinney should have evaluated the reliability of the insurance restoration contracts since it was created internally by ZZZZ Best. Furthermore, the limited details in the contracts as noted in the ten red flags that ZZZZ Best’s auditors allegedly overlooked should have raised certain professional skepticism of the auditors. While performing analytical procedures on ZZZZ Best’s financial statement, its auditors failed to notice the substantial excess in its profit margin for restoration projects comparing to the rest of the industry. Physical examination, although a very reliable type of evidence for auditors, was unreliable in this case. Barry Minkow and his accomplices went to great length to cover up their fraud and successfully deceived their auditor. Moreover, the auditors did not have the authority to corroborate evidence with outside third-party due to the confidentiality agreement with ZZZZ Best.

The chief executive of the company was closely working with the vendors whose confirmations were vital in the auditing work and hence they could have submitted false confirmations. The auditing firm established a national risk management program for its clients and so national reviews were done to identify the high risk items in the financial statement. The vendor allowances were particularly high but they were not documented. As such, the auditors were supposed to demand for the documentations and compare them with the real figures. It is however noted that most of the documentations received were non-standard and this could have led to a different audit report given that vendor allowances were earlier identified as a high risk area. Inventory management was found to be poor especially in the allowances for inventory reserves. The audit firm was therefore obliged to carry out a thorough evaluation of the inventory reserves and determine whether it was reasonable. The valuation was also supposed to include all classes of inventory but for the case of the company, the evaluation excluded instances where no sales had been made. Hence, this evaluation could not accurately represent the position of the inventory reserve in the company. (Waters,2003)

b. Describe the implications of the resulting ratios for the auditor’s audit strategy in year 5. What specific audit objectives are likely to be misstated? How should the auditor respond in terms of potential audits tests?

Trends analysis always helps to predict the trends like bull market is where the share pricing increasing and high purchasing demand run and ride until the trends suggested to reversal. For example, from bull market to bear market. This is will help to see the movement of the trends that will leads profits for investors because investors will pay attention to a company’s financial information, as well as general economic conditions, to accurately predict the performance of a security or other

Marriott use trend analysis that allows them to make better business decisions. An example of trend analysis would be the monitoring of market conditions on a local and regional basis that will affect demand in a positive or negative way. For example a weekend concert will increase demand to the area, which in turn will show an increase in rate to ensure maximum revenue is achieved during this period,

Although the procedures in this process can be difficult and is subjected to a great degree of interpretation. Even though the calculation that is required can be subjected to a guess. The new proposed treatment has been tackling with the problem of ambiguity and subjectivity aiming at the financial report preparers and auditors who will have some major implication regarding corporate governance and auditing.