Auditing

Phar-Mor Inc. was a discount drugstore chain that was founded in 1982 by Michael J. “Mickey” Monus. Within ten years of their first store opening, Phar-Mor had 310 stores, and over 20,000 employees in 34 states. Mickey Monus also owned Tamco warehouse, which was the distributer for Phar-Mor. Mickey Monus also owned 60% of each of the ten teams in the World Basketball Leage (WBL). While everything seemed to be growing, and succeeding rapidly, in reality the company was losing money. Between…

organization has self-assurance in them as satisfactory controls are in place to safety measure economic data. Year-end financial reports must include a valuation of the efficiency of the internal controls. The issuer's auditing organization is enforced to attest to that evaluation. The auditing organization does this after studying controls, tactics, and measures during a Section 4040 audit, lead along…

The theory of Continuous Auditing was established by Vasarhelyi and Halper (1991). Continuous auditing entails the real-time monitoring and analysis of the entire population of records. The premise of this methodology is based on the concept of “audit by exception” where deviations (e.g. control variances) are flagged as alerts and forwarded to the responsible parties (e.g. management, internal auditors, business owners) for investigation. Continuous auditing has evolved from an academic theory…

Accounting Principles(GAAP), is a common set of accounting principles, authoritative standards and procedures that companies use to gather their financial reports. GAAP is the standard industry for accountants to record and report accounting and auditing informations. Typically a CPA firm audits may prove the existence of physical assets, examine business activities and confirm account…

Trinity Industries is a successful and properly operating company who never had to restate their earning from previous years. However, Don Collum VP of Trinity Industries, had described the company in 2003 as a candidate for material weakness as defined by Sarbanes-Oxley Act (SOX). The company was deficient in internal control process in the area of documentation and evidence that controls had been performed which could lead to material weakness. Sarbanes-Oxley (SOX) was created in 2002 because…

it is advisable for an auditor to ensure that they maintain a professional skepticism by considering previous audit reports and the relationship between the audit client and the third party. Consequently, over-reliance on a third party during an auditing process, although proven to be efficient since it is free from adjustment or influence by the client audit. An auditor should ensure that they assess the clients’ financial statement by conforming to existence, rights an obligation, completeness…

did he do something wrong? The doctor, after all, is a professional of medicine, and an average person would look to what they say as fact and would believe that the doctor would never twist the truth. Since this is an auditing course, it is best to look at this issue in the auditing context. In the workforce, people rely on our opinion. Almost as if it is truth. So we cannot really have the option of sparing someone’s feelings be dressing up the…

while investigations into Enron were escalating, Andersen personnel began obliterating documentation relating to the Enron engagement. The writers attest to Andersen’ downfall as a result of obstruction-of-justice charges which barred Andersen from auditing the financial statements of companies registered with the Securities and Exchange Commission (SEC). Thus, one response to the query of how it was feasible for such frauds to transpire without being divulged is: Arthur Andersen LLP’s auditors…

one can only take the blue print from BMIS and make improvements to it. However, since this question is asking for a more comprehensive answer, we need not just look at the firms’ organizational controls but we should look at other agencies and or auditing firms as well. First, the most important organizational control to implement in a case such as this one is a whistleblower program. However, one might argue; if the top is corrupt and did not formed an independent audit committee to oversee…

This is a good indicator that the auditing officers in charge was keenly doing his work and as such could not allow an errant entry to be considered. The auditor goes ahead to seek clarification from top management about the claimed commission revenue from United Airlines. The CEO, Rognlien…