controversy over the role of the auditor with respect to the detection of fraud. There are different perceptions to the auditor’s duty regarding fraud. In today’s technological age‚ fraud has become very complicated‚ and increasingly difficult to detect‚ especially when it is collusive in nature and committed by top management who are capable of concealing it. Consequently‚ auditors have argued that the detection of fraud should not be their responsibility rather the auditor sees his duty as the independent
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someone uses information or facts that go along with their original thought‚ to “confirm” that they are right. This tendency could result in a lack of audit effectiveness because an auditor may only try to use evidence to support what they think the answer is‚ and not look for evidence that would go against their case. The auditor might be
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The speaker for class a CPA with a senior living facility called Senior Star Management. She is an analyst who does financial statement audits and has 6 ½ years of previous experience as a healthcare auditor. Haley’s stated education is a BS in Accounting and a BA in Finance. Several different topics were discussed relating to healthcare audits. One question that was asked was ‘what are the main reasons a healthcare facility is audited?’ It depends on the type of the audit and typically a
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externally. Internal reports are used primarily to aid management in the decision making process throughout the course of the business. These are subject to internal audit to make sure that all information reported are fair and correct‚ safeguard the assets of the company‚ assure compliance to laws and regulations‚ etc. The company employs the internal accountants and therefore‚ unregulated‚ although there are international standards for internal auditing. External Reports on the other hand‚ are
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profits. These schemes primarily involved violations of the revenue recognition rule for certain barter and consignment transactions arranged by the company’s chief financial officer and vice-president of sales. Deloitte served as North Face’s auditors during the period when the company’s operating results were manipulated. The SEC’s investigation revealed that personnel of the prominent accounting firm had altered the workpapers prepared during an earlier North Face audit to conceal a critical
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Summary Phar-Mor‚ Inc. was a deep-discount store that had substantial growth in a short period of time. It started with 15 stores and grew to over 310 stores in thirty two states between 1985 and 1992. At first Phar-Mor was seen as a major prospect in the retail market. With sales of over $3 billion and growing‚ Phar-Mor’s success even worried some of the biggest retail giant‚ including Wal-mart. The president‚ founder‚ and COO of Phar-Mor was Mickey Monus‚ who became quite extravagant with
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permanent exemption from complying with the Sarbanes-Oxley (SOX) Section 404(b). The Section 404(b) would have required these smaller companies to do what larger companies over the $75 million market cap are currently doing; requiring an external auditor to audit their internal controls over financial reporting. However‚ what may seem like a huge win for the smaller companies who long have complained about the cost out weighing the benefits of complying with the standard‚ does not appear that way
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unethical accounting practices. One example of such practices included faking product shipments so that sales could be booked. By midsummer 1994‚ as much as 70% of quarterly revenue was false. The company had ignored early warnings‚ such as their auditor Price Waterhouse LLP telling them they had weak internal controls. After announcing their 1994 write off another audit took place by Coopers & Lybrand. While Coopers feels that their audit followed best practice‚ the SEC argued they missed many
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Client Considerations With this particular case study I will discuss several questions and facts regarding audit client considerations. 1) A brief summary of the case. 2) Identify key behaviors‚ attitudes and ethical dilemmas (if any) faced by the auditors. 3) Assess the philosophical and practical alternatives summarized in the case questions and evaluations of those solutions. 4) Briefly summarize what I would do faced with this situation in real life. The case is that of a CPA firm‚ Cardinal
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Management at Kudler Fine Foods now wants to see the proposed audit schedules for the systems analyzed by the team in Week Two. 1) Distinguish between the types of audits that might be used for each process. There are five processes at Kudler Fine Foods what will be audited. These processes are the communications process‚ the financial process‚ information systems process‚ marketing process and facilities process. Kudler Fine Foods is a gourmet food store and has the objective of provided excellent
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