The client’s management is responsible for preparing the financial statements which auditors examine and issue a report, thus providing reliability of the financial statements by users when making economic decisions. The auditors’ report on financial statements and related disclosures for both public and nonpublic entities provides or disclaims an opinion on whether the financial statements and related disclosures are presented in accordance with the Generally Accepted Accounting Principles (GAAP) (Louwers, Ramsay, Sinason, Strawser, & Thibodeau, 2015). This opinion is the conclusion reached by the auditors after tests of controls and substantive procedures that have been performed during the audit engagement. Paragraph 10 of Auditing Standard 3101 “Reports on Audited Financial Statements” states the type of opinion the auditors may express in various circumstances (PCAOB, 2016):…
Australian Unity Board is responsible for Group governance: approval of strategies, operating plans, budgets; setting and monitoring Group risk management framework; control and accountability policies/systems. Committees include: • Audit and Compliance: approves annual internal audit plan; main objective is to oversee the credibility and objectivity of financial reporting and the compliance with obligations; oversees and appraises the quality of audits conducted by both internal/external auditors (e.g. EY financial auditors); determines adequacy of controls and evaluates adherence. • Risk: oversees risk management framework for identifying, assessing, mitigating and monitoring material risks arising from the business activities; promotes…
The Sarbanes-Oxley Act(SOX), This reform was approved to help regulate the financial reporting and audit quality and it needs to be performed by an independent auditor or…
The American Institute of Certified Public Accountants (AICPA) is the world’s largest representation of certified public accountants (CPAs). Established in 1887, the AIPCA serves as an advocate for CPAs, CGMAs, and has a mission of powering the success of global business, CPAs, and CGMAs through the use of education, resources, and advocacy (AICPA, 2016). The AICPA supports FASB by providing technical support, standard setting, and guidelines to CPAs nationwide. Because accounting is complex in nature this governing body works in collaboration with other institutes to ensure that organizations are adhering to the accounting standards established under the General Accepted Accounting Principles (GAAP). This paper will focus primarily on the AICPAs relationship in advising the FASB, their function in setting the auditing standards for public accounting firms and their relationship with authoritative rule making boards such as The International Accounting Standards Board (IASB), The Government Accounting Standards Board, and the HFMA Principles and Practice Board.…
What is The Sarbanes-Oxley Act (SOX)? It may be one of the most pivotal financial acts to have come about in recent history. It is a law that was enacted in 2002 and signed by President George W. Bush (U.S Securities and Exchange Commission 2013). The Securities and Exchange Commission (SEC) enforce this law to regulate changes in financial practices and corporate governance.…
The PCAOB responsibilities include: registering firms, performing inspection of firms, conducting investigations and disciplinary proceedings of firms,…
SOX requires that a company’s chief executive officer and chief financial officer acknowledge several points including (1) they have personally examined the financial statements (2) the information included in the statement is accurate as far as they know (3) all material facts are included and fairly represented as far as they know (3) they are ultimately responsible for the internal controls procedures practiced by their company (4) they believe their internal controls procedures are effective (5) changes and deficiencies in internal controls have been reported (EY). By forcing executives to personally certify documents submitted to the SEC for review, the authors of SOX hoped to increase corporate accountability and restore investor confidence in the financial reporting process (EY). Corporate executives who falsely claim that their filings comply with the requirements set forth by SOX and the SEC face harsh civil and criminal penalties (EY). Corporate executives may face up to 20 years in prison or a maximum fine of $5,000,000 for knowingly and willfully certifying false reports (Morrison and…
According to section 301.4 of SOX 2002, the public company audit committee is required to implement procedures for the receipt, retention, and treatment of complaints received by the whistleblowers concerning auditing matters, internal accounting controls, or accounting. Also, the complaints have to be treated confidentially by the audit committee by making whistleblowing procedures for the submission around dubitable accounting or auditing matters to be anonymous. To encourage this, the audit committee should make and control an effective corporate whistleblower hotline by proving to whistleblowers the secrecy of their complaints. There are some potential pitfalls that may occur in a whistleblower program which should be avoided by the auditing committee like the auditing committee does not take action when it receives complaints.…
These actions violated the PCAOB Rule 3400T System of Quality Control for a CPA Firm 's Accounting and Auditing Practice; QC §20.01. Each registered public accounting firm is required to develop, implement and maintain a system of quality control for its accounting and auditing practice. A registered public accounting firm has a responsibility to ensure that its personnel comply with the professional standards applicable to its accounting and auditing practice. A system of quality control is broadly defined as a process to provide the firm with reasonable assurance that its personnel comply with applicable professional standards and the firm 's standards of quality. The policies and procedures designed to implement the system in one segment of a firm 's practice may be the same as, different from, or interrelated with the policies and procedures designed for another segment, but the purpose of the system is the same for all segments of a firm 's practice (PCAOB Rule 3400T, QC §20.03)…
Under ASQA’s new audit model, five main features of students’ experiences will be focused: • RTO marketing and recruitment: during students recruitment process RTO and its marketing personnel should not provide student service agents and students with misleading information and ensure they are authentic, honest and original. In this context prospective students should be receiving the information which reflect the RTO’s policies and procedures, required performance and behaviours that need to follow. These information include required student attendance, study progress requirements, misconduct behaviours, academic requirements, overseas student working rights and limitations and complaints appealing procedures. RTO designs these policies and procedures under the guidelines of Standards for RTOs 2015 and relevant federal, state or territory legislations. In addition RTO should utilize its marketing promotional brochures in a professional and ethical…
Fronckiewicz (50) and Sarah E. Adams (52). Fronckiewicz was the coordination partner who oversaw the financial statement for Weatherford International, he also was a licensed Certified Public Accountant (CPA). On the other hand Adams was the tax partner who reviewed the work made by the tax professional on the audit, she was also a CPA. Both of the CPA’s failed to follow a procedure that is required by the Public Accounting Oversight Board (PCAOB). They were not doing there job according to standards.…
Rather than auditing, the internal audit division provides consulting service to the management. There are members from the audit committee who are from former CFO team6. Actions taken: The report of the independent investigator committee included recommendations to Toshiba to prevent the re-occurrence of these failures as well as their findings on the misreports. These are mainly related to changing the corporate culture and change of the internal audit system. Besides, in addition to official internal auditors, to enable each and every employee to audit the company, the committee advised to create an open environment5.…
Abstract This paper describes two different employees at two different levels of their career field and what ethical dilemma they each fall. The ethical dilemmas, however, are different in their definitions due to the circumstances of each employee at different levels of current career at the time. Fraedrich, Ferrell, and Ferrell (2011) portray the baseline of the employees and their relationship with one another at Aker & Aker Accounting (A&A).…
a) IASB stands for International Accounting Standards Board. The IASB is a standard-setting board whose main role is to ‘develop and approves ‘International Financial Reporting Standards’ so that all financial reports and financial statements globally are detailed and can be easily read by all users. With constant regulation and development, it ensures all business’ financial records are formatted the same and easy to transfer information to and from them. To become an IASB member isn’t an easy task. IASB members are appointed through an in-depth process undertaken by the trustees.…
Upon the completion of this course I have come across topics that have interested me and increased my knowledge especially in the financial and accounting aspect. This course has introduced me to understanding the relationship between financial and accounting in making an effective strategic decision. In as much they sound alike they are different and used in different purposes, both accounts are important to the business but are used for different purposes. Financial statements are requirement for any organisation and are published at the end of a financial period for its stakeholder, shareholder and customers to see, they show reports of performance on a historic basis and what has been achieved over the years. At the time the statement is…