• Auditing Quiz Bee
    company has fixed all the control deficiencies that might have existed. c. For the monitoring approaches you have identified, (i) describe how the approach would work, and (ii) what evidence the auditor might want to gather to determine the effectiveness of the monitoring control. d. Explain why an...
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  • Waste Management
    industry related to bundled lease allocations and compare that to the current practice. Should there be a change in practice, the auditor should evaluate whether the change is a change in principle or estimate and determine what type of disclosure would be necessary to ensure financial statement readers...
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  • Auditing Chapter 5
    system is auditable, that is the auditor can gather sufficient competent evidence to determine the correctness of the client's account balances. (3) what are the specific risks of account balance misstatements occurring? The auditor needs to identify the types of misstatements that are...
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  • Enron Dilution
    from three management disciplines analyze what went wrong. What brought about the sudden collapse of energy giant Enron? Along with many other interested observers, management professors have been consumed by that question. Was Enron a failure of strategic management and organizational leadership...
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  • Auditing
    , the auditor can determine an expected value for the current allowance. Suppose that you are auditing a hotel. You may develop an expectation for total revenue from rooms by multiplying the number of rooms, the average daily rate for each room, and the average occupancy rate. You can then compare...
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  • Audit
    to include the expenses in their financial statements. 7-50. An extra shipment of $9 million of disks. The primary evidence is found by reviewing receipts for merchandise returned after year-end. The auditor examines records of goods returned after year-end to determine whether the...
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  • Audit Cases
    financial statements in question related to the just completed first quarter of the current fiscal year and purportedly overstated sales and receivables. ƒƒ The bank requested the first quarter financial statements to determine whether it would resume funding of the company’s line of credit that was...
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  • Auditing Cases
    costs were generic production expenses. What do generally accepted auditing standards suggest are the key evaluative criteria that auditors should consider when assessing audit evidence? Given these criteria, do you believe Hope was justified in deciding that the costs in question were for...
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  • Expectation Gap and Corporate Fraud
    Auditors’ Duties? ABSTRACT. Based on evidence from press articles covering 39 corporate fraud cases that went public during the period 1998-2005, the objective of this paper is to examine whether the expectation gap between public opinion and auditing profession still exists and what are the...
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  • asa dell
    was going on from both auditors, investors, and potential whistle-blowers.If Enron was recording profits, and assuming not much else was happening in these other entities, then these offshore entities would be recording losses. These losses were conveniently recorded away from the financial statements...
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  • Solution Manual-Auditing and Assurance Services
    bond or debenture agreements, and the auditor would examine evidence of proper approval, such as minutes documenting board of director approval. The auditor would also verify whether cash was received and deposited in company cash accounts if the debt was tied to cash financing. For some types...
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  • Enron What Happened
    contract from another Channel Islands company, Stoneville Aegean Ltd., also connected with both Mahonia and Chase. 10 Enron collected immediately the discounted present value of the sales contract (which was apparently recorded as sales revenue), but did not recognize the purchase contract as an...
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  • Enron case
    “existence” and “valuation” are the most importance elements for the test5. Both internal and external evidences should be generated. Auditor can physically examine the futures contracts or request a confirmation from the counter parties of the contracts to check for the existence of those futures. As to...
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  • Indeminification
    . Instead of EarthWear’s auditor, imagine you are a prospective investor in EarthWear. As an investor, would the reputation of the company’s auditor matter to you? What if the lead partner on the audit were related to EarthWear’s president? Would you want to know that the audit firm used a well-recognized...
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  • Enron Articles
    deregulated However, electricity, Enron to predict when Indiana would deregulate and how much impact have on the costs of servicing the contract over the ten years (Krugman, whether reporting purposes, a series of rules is used to determine a special purpose entity is a separate entity from the...
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  • Auditing and Assurance Services, 14th Edition Textbook
    return as an example. To determine whether the tax return was prepared in a manner consistent with the requirements of the federal Internal Revenue Code, the agent examines supporting records provided by the taxpayer and from other sources, such as the taxpayer’s employer. After completing the...
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  • Principles of Auditing
    : weak or strong? Why? ■ Why would the RAC control be considered material to the financial statements? ■ What tests of control would you recommend to determine if the RAC was effective in operation? References Bryce, Robert, 2002, Pipe Dreams: greed, ego and the death of Enron, Public Affairs...
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  • Audit
    that the appraiser meets the criteria, the appraisal values can be used for adjusting the assets. The auditor would still want to review the appraisal from a business sense to determine if the appraiser's recommendations make sense and are consistent with the operations of the entity. If...
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  • Fair Value in Financial Reporting: Problems and Pitfalls in Practice – a Case Study Analysis of the Use of Fair Valuation at Enron
    controlling our revenue. That was how your business model was set up … You could always meet [Wall Street’s] expectations.’42 3.4 Mark to market in practice The majority by far of assets and liabilities covered by mark to market accounting related to what Enron termed ‘price risk management...
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  • Enron Case Study
    called allocated revenues which was based on figures Enron claimed reflected the open market value of the commodities and services, not what Quaker had historically paid for energy commodities (16). “Mark to market” accounting is very aggressive and overlooked by the SEC, especially in Enron’s case...
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