Case Study: How a CFO plowed himself under The three critical elements of the fraud triangle: 1) motive‚ 2) opportunity‚ and 3) Rationalization‚ clearly exist within the case of the $150‚000 embezzlement involving McKinley‚ his tractor company‚ and CFO position with the bank. McKinley’s motive‚ the driving force behind this act of embezzlement was his own self pride: his inability to deal with the fact that he had made a bad choice of investment‚ a poor investment strategy and an inability
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why the external auditor is such an important tool in corporate governance. Corporate governance is the system of rules‚ practices and processes by which a company is directed and controlled. It is basically needed to balance the interest of the stakeholders in a company. Meanwhile‚ the external auditor is needed to make sure that the company follow the GAAP‚ checking the accounting record and help the company to resolve problems. In this article‚ it shows the contribution of external auditor to corporate
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independence‚ some non-audit services also could be provided by external auditor if the auditor could have a better control of services provides. According to Section 323 of Corporation Act‚ auditor has the power to gain information from the audit client and the audit client must provide information or other assistance to the auditor concerning the consolidated financial statement being audit. Therefore‚ there is no denying that auditor would master the audit client’s business‚ its policies and its
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engagement. 1.5 (a) B Auditors currently use a business risk approach that requires the auditor to understand items that affect the business and may flow through into the financial report. (b) D Auditors initially followed a statement of financial position approach then changed to transactions cycle approach then changed to a financial risk approach before finally adopting a business risk approach. 1.6 (a) C As following Australian auditing standards is mandatory for auditors‚ it is reasonable for
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RECOMMENDATION 1) CORPORATE CULTURE Corporate culture and ethics are very important source to sustain positive working environment in an organization. Based on the pattern that caused the fraud‚ the management style of HealthSouth is clearly practice very authoritative which the reason for Richard orders fulfilled dutifully in order to partake in the fraudulent schemes. It’s clearly stated that the company not practicing a strong code of ethics. It has been proved that an effective antifraud
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GROUP ASSESSMENT COVER SHEET UNIT CODE ACCG340 DUE DATE 14/OCT/13 TUTORIAL DAY & TIME MON/2PM TUTOR GROUP MEMBER DETAILS NO. STUDENT ID LAST NAME FIRST NAME(S) 1* 41403274 Choi Ukjin 2 41660625 Shim Daebo 3 42228425 Park Jae Hyun 4 5 *The first listed student should be the only student to submit the group assignment on Turnitin on behalf of the entire group.. ALL GROUP MEMBERS MUST READ AND AGREE TO THE DECLARATION BELOW PRIOR TO SUBMISSION. ELECTRONIC
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Enron Corporation and Andersen‚ LLP Accounting Fraud and Auditor Legal Liability 1 - What were the business risks Enron faced‚ and how did those risks increase the likelihood of material misstatements in Enron’s financial statements? The business risks that Enron faced included foreign currency risks and price instability‚ which is common for the energy industry. In addition‚ Enron faced pressure to perform well so that the stock price would rise. These risks increased
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Required: (a) Provide a brief description of each approach. (b) Define the term “Transaction Cycle” and provide two examples of common transaction cycles‚ together with the account balances arising from the identified cycles. (c) If an auditor adopts a risk-based approach to auditing‚ does this mean they do not consider the Balance Sheet or Transactions cycles? PROBLEM 2.2 Tom Smith has recently been employed by a small accounting practice and is working on his first audit. During
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Critically evaluate this statement and consider whether in your view‚ the current risk based approach to auditing should be amended and if so‚ what model should be adopted. (NOTE: YOU DO NOT HAVE TO RESTRICT YOUR RESEARCH TO THE UK). TOPIC 2 External auditing has changed to
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| | |29 Jan 2003 | | |Internal auditors‚ external auditors‚ and consultants who perform internal audit and review engagements provide reports to management | |(internal audit reports). These reports are important because they provide documentary evidence of the work performed‚ the conclusions
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