Auditing

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. Questions and

around $19 per share and reached the lowest of $1.45 per share on March 2009. Source: Auditing and Assurance Services Textbook page C11-C13. 2. In

After identifying a significant related party transaction outside the entity’s normal course of business, an auditor should Evaluate the business purpose of the transaction. In auditing related party transactions, an auditor ordinarily places primary emphasis on The adequacy of the disclosure of the related party transactions. Subsequent to issuing a report on audited financial statements, a CPA discovers that the accounts receivable confirmation process omitted a number of accounts that are

1. Lessons learnt with regards to over reliance on third party confirmations Confirmation is the process of obtaining and evaluating a direct communication from a third party in response to a request for informationabout a particular item affecting financial statement assertions. In the American food suppliers’ case study, third party confirmation was used where they relied on the vendors’ sales people. The audit team investigating the company did not rely on the accounting department of the American

an FBI Agent Specializing in Accounting Do? What an FBI Agent specializing in accounting does will depend on their specific department, but most will perform auditing, fraud and forensic duties. Here are four of the most common FBI-based accounting jobs. Forensic Accountant Forensic accountants plan, implement and oversee complex auditing investigations that support litigation activities. They analyze paper and digital bank, financial and business records. They use database tools to extract and

audits that may possibly be used on an Accounting Information System (AIS). Knowing the different types of audits and where they are used will help a company be ready for an audit and make the process much smoother. There are some circumstances where auditing through a computer is not always beneficial. Auditors want to make sure they are completing their audits fully and appropriately to the best of their abilities.

1. Case 3‐5, Part B (pp. 62 – 63) Price based on latest purchase invoice price will make the value of the inventory not accurate enough. The value of items tested might be not accurate, this will affect the result when set the range of percentage applied to base. For example, when the $2000 total error is materiality is due to the set up limit is at $25000, and this $25000 set up based on the value of items tested. If the sample value is actually inaccurate lower than expected, then this will affect

K1.1 - 1 Enron – Enron is partially responsible for the crisis of confidence, because they committed the fraud via the special purpose entities. Because of the three percent rule, Enron was able to put lots of its liabilities onto those off-balance sheet entities. Also, Enron did not have adequate financial statement disclosures. Many of the top employees at Enron were able to “realize” an extraordinary profit within matters of a couple months because of the fraud. Additionally, Enron abused the

Independence according the Sarbanes-Oxley Act (SOX, 2002) To protect investors from the possibility of fraudulent accounting activities by corporations, the Sarbanes-Oxley Act of 2002 (SOX) was passed by U.S. Congress in 2002. Under SOX, TITLE II—AUDITOR INDEPENDENCE as a independence standard to guide external auditors. Section 201 lists nine non-audit services those would impair registered public accounting firm’s independence. Under section 201, these nine non-audit services are prohibited. Moreover

Alicia Sowinski Internship Reflection This past summer, I had the opportunity to intern at the largest CPA firm in Buffalo, Freed Maxick, CPAs. It was an intense six-week program that exposed me to a variety of work in departments such as tax, audit, EAS, consulting, and healthcare. At Freed Maxick, they wanted the internship to parallel the experience their first-year staff accountants have. We were treated as full-time employees as we had our own cubicles, worked forty-hour weeks, and were