Auditing

Auditors determine whether a company’s financial statements are presented fairly and accordance with the financial reporting framework. When providing auditing and other attestation services, an auditor should be independent. Amanda was assigned to audit LAW LLC financial statements. Amanda was faced with an ethical dilemma when LAW LLC’s audit report showed little evidence of the different assets on its balance sheet. Also, LAW LLC violated their loan covenant which due whether it was on the…

scandals, despite the reservations by many in the accounting profession. The law is still relatively new, but now, over ten years after the Act initially passed, we are better able to evaluate the influence that the Sarbanes-Oxley Act had on the Auditing…

Public Company Accounting Oversight Board (PCAOB) was formed under Title I of SOX. According to authors Johnstone, Gramling, and Rittenberg, Section 101 presents the PCAOB as auditing standard setters and regulators of the audits of corporations by public accounting firms. Section 102 mandates that the accounting firms auditing public companies register with the PCAOB. Section103 require audit firms to describe the scope of testing of issuers’ internal control structure. The authors further…

more accountability from corporate official 3.3 Auditor’s incentives and Independence Many of the weaknesses, that were not discovered prior the Enron bankruptcy, in auditing the company’s financial statements were pointed out after Enron scandal. According to Ribstein and Larry (2002, p. 5) the major issues that caused the auditing of Enron financial statements not to be efficient…

assets. However, corporations hire forensic experts to do the fraud investigation. After the 2002 Enron scandal, the Sarbanes Oxley act required that a publicly traded company to have an audit committee with a financial expert. The CPA firm does the auditing of the financial statements and makes sure every…

uses in order to gather sufficient audit evidence, this can vary from firm to firm as well as auditor to auditor (Manita & Elommal, 2010). The main factors that will influence the audit process will be how compliant the audit teams are regarding the auditing standards, laws and control procedures, the level of interaction between the audit team and relevant parties, and finally the amount of appropriate audit documentation (International Federation of Accountants, 2013). These factors also…

the history of an auditor, their work schedule, their overall goal, how they better the world, and the challenges they face. Since civilization has existed, human life has found a need to track their record. This created what we know as now as auditing. Auditing has allowed us to keep record of ownership and ones goods. One technic that they used was symbols and charts. But as years have gone by the biggest change has been the mind set of auditors.…

AICPA The role of the external auditor is to identify items that might be causing DOW’s transfer of financial assets account to somehow make their financial statements materially misstated by designing and executing auditing tests. As I stated before DOW trades accounts receivable with many third party clients and conduits, in effect making the transfer of financial assets section of their company to be very complicated and susceptible to fraud. When an auditor is approached to complete an…

HealthSouth Corporation, founded in 1984, is a company that offers both facility and home-based acute services through rehabilitation centers for patients in over 35 states, including Puerto Rice. The beginning stages of this national news accounting fraud began in 1996, where the company’s Chief Executive Officer, Richard Scrushy, and several of the company’s Chief Financial Officer’s stole more than 2.7 billion which surfaced in 2002 after the company’s CEO/Chairman sold over $100 million…

I like how you listed all ten of the auditing standards according to AU Section 150 in order to give us the readers a better understanding. I agree with you on three principles violated by the E&Y auditors in this case. I would like to add two additional standards I feel E&Y auditors violated…