• Crazy Eddie
    individuals who formerly served as their independent auditors? Discuss the pros and cons of this practice. There are several pros and cons of hiring individuals who formerly served as independent auditors. Hiring former external auditors to work as senior accounting and finance officers is known as a...
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  • 10 key ratio
    escalate his suspicion up the reporting chain. It is ultimately the decision of the partner in charge of the audit whether to ignore this fact to mention this condition in the final audit report. 6. Should companies be allowed to hire individuals who formerly served as their independent auditors...
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  • Crazy Eddie, Inc
    individuals who formerly served as their independent auditors? In my opinion, companies should not hire their former auditors primarily because their attitudes might be biased. In general, the pros and cons of that practice are as follows: Pros: less time needed to bring the person up to speed in the...
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  • Compute Key Ratios F
    allowed to hire individuals who formerly served as independent auditors because it can be an asset to the company. PROS Has an understanding of internal controls of management Knows the prior ways to present the F/S to auditors Has an understanding of what an auditor wants Knows how to...
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  • Crazy Eddie Case
    situation? Explain. 6. Should companies be allowed to hire individuals who formerly served as their independent auditors? Discuss the pros and cons of this practice. Facts * By 1987 Antar’s firm Crazy Eddie, Inc. had 43 retail outlets, sales exceeding $350 million and outstanding stock...
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  • Crazy Eddie
    plausible reasons for lost invoices; then the probability of fraudulent activities within the firm are high. In turn; the auditors and team must communicate to the management their suspicions and findings. 6. Should companies be allowed to hire individual who formerly serves as their independent...
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  • Crazy Eddie
    isolated incident. Most control audits permit for a random missing item here and there (acceptable deviation rate) but 10 out of 15 would be a big red flag. 6. (a) Companies should not be allowed to hire individuals who formerly served as their independent auditors, due to conflict of interest. In...
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  • Crazy Eddie
    . Assume that client personnel were unable to locate 10 of these invoices. How should you and your superiors have responded to this situation? Explain. 6. Should companies be allowed to hire individuals who formerly served as their independent auditors? Discuss the pros and cons of this practice. 9...
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  • Crazy Eddie
    that was delivered to the company. The next step would be to perform and inventory count at some of the Crazy Eddie locations without giving advance notice. I think that companies should be allowed to hire individuals who formerly served as their independent auditors. Companies are facing cost...
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  • Case 4.4 Waste Management
    Andersen. What are the risks associated with allowing former auditors to work for a client in key accounting positions? Research Section 206 of the Sarbanes−Oxley Act of 2002 and provide a brief summary of the restrictions related to the ability of a public company to hire accounting personnel who were...
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  • Audit - Solutions for Chapter 2
    committees. That is not to say that it does not happen or is not a good idea, however. Most stakeholders want an independent party to ensure that their interests are being considered. The AICPA recommends audit committees for smaller public companies. 2-18. The external auditor should discuss...
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  • Waste Management
    client. Develop separate arguments for why auditors should not be allowed to perform nonaudit services for their audit clients. What do you believe? External auditors are required to be independent of the companies they audit. When auditors begin to perform internal audit and management consulting...
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  • Auditing
     transactions? Control activities: These are the policies and procedures that help ensure that management’s directives are carried out. One example is a policy that all company checks for consequent amount of money require two signatures. Information and communication: The auditor has to understand...
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  • Sarbanes Oxley Memo
    to filter down to smaller, non-public companies, Banks are requiring different standards for corporate governance which has increased as a direct result of Sarbanes-Oxley. People have started talking about spending more for internal controls, software, having to hire more auditors and higher D&O...
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  • Contemporary Auditing
    . Should companies be allowed to hire individuals who formerly served as their independent auditors? Discuss the pros and cons of this practice. 9. Crain’s New York Business, “Week in Review,” 11 June 2001, 34. 10. In 2004, the “new” Crazy Eddie failed. The company’s trademarks were purchased by a...
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  • Auditing Cases
    situation? Explain. 6. Should companies be allowed to hire individuals who formerly served as their independent auditors? Discuss the pros and cons of this practice. 9. Crain’s New York Business, “Week in Review,” 11 June 2001, 34. 10. In 2004, the “new” Crazy Eddie failed. The company’s trademarks...
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  • Soloution to Vol 2 Appendix
    important (hierarchy). Lobbying the FASB. Discuss pros and cons of lobbying FASB by interested parties. Ethical Dilemma. Discuss steps to take in an ethical dilemma ("misplaced" book in library). Ethical Responsibilities. Discuss steps to take in an ethical dilemma (cheating by friend on exam...
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  • Corporate Governance
    ). The Chair wants to retire and leave the company with a reputation as a good corporate citizen, so he asks you to develop a corporate social responsibility (CSR) policy for the company, the Board and the Directors. In your briefing paper to the Chair you should discuss: a) What are the pros and...
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  • Auditors Selection and Corporate Governance
    stakeholders of a firm. It seems obvious that auditors evaluating financial statements should be independent from the firms’ management who is providing exactly this information. However, the lack of auditor independence is one of the major issues in the recent history of corporate governance. After the...
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  • 1.8 Crazy Eddie, Inc.
    very common for companies to hire individuals who formerly served as their independent auditors. It is often argued that this practice impairs an accountant/auditor’s independence. For this reason, the Sarbanes-Oxley Act of 2002 imposed a one year cooling-off period before publicly held companies may...
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