Auditing

The Sarbanes-Oxley Act

Titled after promoters, “U. S. Senator Paul Sarbanes and U. S. Representative Michael G. Oxley” (“The Sarbanes-Oxley Act”, 2006), “The Sarbanes–Oxley Act of 2002” is a U. S. government regulation that established novel or improved principles for U. S. community business panels, administration, and community accounting organizations. Consequently, because of the SOX, higher management is […]

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Ethics and Professional Responsibility

Like most business professions, there has to be a strong sense of ethics and responsibility. Especially professions like law or public accounting. They must have strong standards of integrity. In public accounting, people rely heavily on the information being provided on companies. Any mistakes or intentional cover up will have high costs to the economy […]

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Worldcom: the Story of a Whistle-Blower

Question 1 At the time Cynthia Cooper discovered the accounting fraud, WorldCom did not have a whistle-blower hotline process in place. Instead, Cynthia took on significant risks when she stepped over Scott Sullivan’s head and notified the audit committee chairman of her findings. Discuss the key criteria for the operation of an effective corporate whistle-blower […]

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Accounting Ethics

Explain and describe characteristics of an effective system of internal control. An effective system of internal control limits the probability that fraud will take place. Within an effective system on internal control an organization will safeguard their assets, encourage employees to follow company policy, promote operational efficiency, strive towards the most accurate and reliable accounting […]

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David Friehling

Yes, it matters that Friehling didn’t do any audit work. It matters because he signed off on financial statements verifying that he had. He played a great part in Madoff’s misconduct by falsely representing to investors that Madoff’s company was financially sound when in fact he hadn’t done a single audit. It without a doubt […]

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Crazy Eddie Case

The main critical issue in the Crazy Eddie case is the incompetence and lack of professional skepticism of the company’s audit team and their inability to successfully comply with the standards of GAAS. The auditors failed to exercise the fundamentals of the substantive audit plan which would have uncovered at least some of the fraud. […]

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Dilehmas in the accounting Profession

Qualify or Not? Viccio and Martin staff accountant Jane Ashley was assigned to work on an audit team with one senior auditor Frankie Small. The audit they were to perform was on the top paying client of Viccio and Martin, Models Inc.. Jane had spent time working for the firm while finishing her academics, and […]

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