Actg 440-Case 3 Essays

Words: 1018
Pages: 5
Open Document
1. a) Since the treasurer diverted a substantial amount of the fund’s earnings to his personal use and systematically underrecorded income earned, we could consider this as a financial reporting fraud. The auditor would have identified the risk primarily through analysis of financial results and review of operational procedures.
b) The auditor should pay close attention to the changes of company’s financial result and analyze those changes in time to see if they are reasonable. Most auditors should have detected this kind of material misstatement in company’s financial results, because this defalcation is caused by a personal factor.
c) We should forecast its audit procedure in order to eliminate the risks in audit progress. Thus, …show more content…
b) Since this fraud is also associated with the management in this case. Therefore, communication with management or full broad would be necessary and useful to find the fraud evidence if the fraud is material. Most auditors should have detected this defalcation as long as they pay more attention on controlling the managerial procedure.
c) As I mentioned above, this defalcation was colluded by the supervisor and the payroll clerk. Therefore, the company should have preparation to meet this kind of scenario, which means alternative managements are essential to cover up this fraud. Separation of duties would have been effective in preventing or detecting the defalcation.

6. a) Since the fraud is manipulated by the branch manager through transferring amounts from dormant accounts to a factious account in order to withdraw this money eventually. This is a corruption and the auditor would have identified the risk primarily through review of operational procedures.
b) We should plan an adjusted audit procedure to ensure the audit adequately identify the fraud and collect enough evidence, which are specifically related to the potential risks. At the same time, we should also examine the monthly finding. If there’s doubtful point exist, we should plan an audit in time. As long as theses processes are done, most auditors should have detected the defalcation.
c) From this case, we could see it is important to keep skepticism of the management.
Show More

Related Documents: Actg 440-Case 3 Essays

Acc 562 Week 7 Discussion Acc562 Week 7 Discussion Essay

Week 1 Discussion "Unbiased Reporting" Please respond to the following: • Analyze the need for unbiased financial reporting. Based on your analysis, determine at least two (2) drivers that may cause financial reporting to be biased. Provide a rationale to support your response. • Analyze the audit opinion formulation process and suggest at least one (1) improvement to the process to strengthen audit opinions. Provide a rationale to support your suggestion. ACC 562 Week 2 Discussion "Topic of Discussion"…

Words 2470 - Pages 10

Research Papers On Uncovering Fraud

FINANCIAL BLOG CORLISS GROUP From Corporate Giants to Main Street, Fraud is on the Rise Investors, analysts and corporate directors rely on external audits to keep companies honest. But a new study says audits are woefully ineffective at uncovering fraud. In fact, more than twice as many frauds are uncovered by accident. This is a finding in the "Report to the Nations on Occupational Fraud and Abuse" study released Tuesday by the Association of Certified Fraud Examiners, which bills itself…

Words 734 - Pages 3

Essay on Loten audit demand WSJ

Document 1 of 1 Audits Add Shine to Firms ; Study Finds Certified Financial Statements Help Businesses' Loan Prospects Wall Street Journal (Online) [New York, N.Y] 12 Jan 2011: /. Abstract Mr. Burke says a business with less than $1 million in annual revenue can ask a CPA to prepare a compilation, which is a cheaper, unaudited financial statement based on recorded sales, inventory and other data. Since owners often use these statements to manage daily operations--and they're prepared by…

Words 1052 - Pages 5

ACC 349 Week 1 Assignment Assignments from the Text Essay

5 Individual Assignment Case Study Resources: Case 12.4: Surfer Dude Duds, Inc.: Considering the Going-Concern Assumption Prepare written answers that follow the case. ACC 492 Week 5 Individual Assignment Issuing Audit Reports Simulation Resources: Issuing Audit Reports simulation located on the Week Five Materials page Complete the simulation. Prepare a 350-word response to the following questions: What are the different types of audit reports and when should each…

Words 572 - Pages 3

ZZZZ Best Company, Inc.: Case Study Essay

ZZZ Best Company, Inc. ------------------------------------------------- Case Study 2 ------------------------------------------------- Due Date: March 30,2010 ZZZ Best, Case 1. Ernst & Whinney never issued an audit opinion on financial statements of ZZZZ Best but did issue a review report on the company’s quarterly statements for the three months ended July 31, 1986. How does a review differ from an audit, particularly in terms of the level of assurance implied by the auditor’s report…

Words 1327 - Pages 6

Auditing: Analytical and Logical Skills Essay

ACG 4632 Introduction to Financial Statement Auditing Spring 2015 Section 422 Instructor: Devin Williams, CPA 1-1 Chapter 1 An Introduction to Assurance and Financial Statement Auditing Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. LO# 1 The Study of Auditing The study of auditing is different from other accounting courses that you have taken in college because … OTHER COURSES Rules…

Words 1268 - Pages 6

Essay about Summary of Facts of the Case Study

1.0 SUMMARY OF FACTS OF THE CASE STUDY After understanding the overall of case study, Arthur Andersen: Questionable Accounting Practice, we have identified a few facts. The following subsection will present the facts. 1.1 ARTHUR ANDERSEN Arthur Andersen LLP was founded in Chicago in 1913 by Arthur Andersen and partner Clerence DeLeny. Over a span or nearly 90 years, the Chicago accounting would became known as one of the “Big Five” largest accounting firms in the United States together…

Words 3375 - Pages 14

The Role Of The Public Accountant In The American Economy

companies that restated their previously issued financial statements as a result of accounting irregularities and fraud. Especially responsible were the very visible Enron and WorldCom fraud cases. Both companies filed for bankruptcy and constituted the largest companies in American history to do so. The extent of the accounting irregularities and fraud being investigated and disclosed brought into question the effectiveness of financial statement audits. In addition, the criminal conviction of Arthur…

Words 5490 - Pages 22

Corporate Governance and Auditors Essay

2009.stability is projected to spur growth in the financial, manufacturing and other…

Words 14732 - Pages 59

Auditing Assignment1 Essay

Table of Contents 1. Introduction 2 2. Importance of audit 2 3. Who can be the auditor 3 4. Why Vincents Ltd should carry out the audit of P & M Pty Ltd? 3 4.0 Company Profile. 3 4.1 Advertising 4 5. Propose Audit fee 4 6. Conclusion 4 7. Appendix……………………………………………………………………………………….....5 1. Introduction The purpose of this report is to analyse the given case study and make a desicion on main issues regarding auditing of the company. There is a situation where…

Words 953 - Pages 4