External auditor

The fraud was perpetrated in two ways. First, reserve accounts were drawn down to boost earnings. However, when the reserve accounts eventually ran out of money, Scott Sullivan ordered the accounting staff to treat line costs, which should have been treated as expenses, as capital assets. This accounting treatment was against the Generally Accepted Accounting Principles, which should have been used by WorldCom’s accounting department. By classifying the line costs as capital expenditures instead…

Title IV focuses on enhancing financial disclosures. Section 401 requires all financial statements prepared in accordance with GAAP to reflect all material adjustments identified by the auditors. The section also required the SEC to establish standards to address off-balance sheet transactions. Result was rules for consolidation of variable interest entities. Section 402 prohibits personal loans to directors and executive officers. Section 404 requires that management acknowledge its…

interpretation brought forth many changes with regards to how companies go about accounting for income tax expense and the related assets and liabilities that follow. These changes not only affected the companies enacting the new practices but also the auditors…

not adequate for them to offer an opinion on the controls themselves. This will mean auditors have to make changes to their audit process” (McConnell, Banks, 2003) in addition to having implications on the process that auditors have to follow Sarbanes-Oxley Oxley section 201 sets out that there are certain activities that the external auditors cannot perform promises to aid in the separation of the external auditors in the work that they are reviewing. “Prohibited activities… To provide to the…

.1 It is imperative that all the stakeholders in GR8 Prospects understand the difference between Internal Auditing and External Auditing in terms of the primary objectives: • External Audit:  The external auditors are not the employees of the organisation. They report directly to the Shareholders of the organisation. They main duty is to tests the underlying transactions that form the basis of financial statements. They form an opinion as to whether or not these statements reflect a true view.…

divided into three categories. The categories include; fieldwork standards, reporting standards as well as general standards. The general standards address the individual’s qualifications to become an auditor as well as the minimum standards for the work product. According these standards, an auditor must have adequate proficiency and training, must be independent in appearance and facts and must have the ability to exercise the necessary professional care while performing the auditing tasks…

Q4. Identify the key auditing principles violated by the E&Y auditors in this case. Briefly explain how each principle was violated. https://pcaobus.org/Standards/Auditing/Pages/Auditing_Standard_3.aspx In this case, E&Y auditors violated several auditing principles among the ten generally accepted auditing standards, and I would like to illustrate specifically four key auditing principles that they violated: 1) Due professional care (General Standards), 2) Sufficient appropriate evidence…

The auditor 's review of payment operations in the institutions, organisations and authorities regularly, and they verified accounting documents and annual accounts and statements of the budget and the calculation of funds, where the reviewing health and fully record the daily business operations as well as the accounts and accounting restrictions to get the results of the year or quarter or month. In addition verified the funds, debt and the use of financial and in-kind materials management.…

COMPLAINCE WITH RULES AND REGULATIONS The duties performed by the AC are essential in evaluating effectiveness. The Treadway Commission Report requested for a written charter for every AC outlining their duties and responsibilities. It is expected that detailed charters should be prepared so as to assist ACs in carrying out their duties effectively. The Treadway Commission Report stated that such a charter would ensure that committee members were aware of their duties and responsibilities and…

nsibilities of the Client Management, Corporate Director and the Company Auditor The client management is composed of the people from the auditing firm who are responsible for ensuring that the work carried out meets the quality standards of both the firm and the client. They are responsible for appointing the quality assurance personnel who review the work performed by the external auditors to ensure that it meets all standards (MW&A 2016). In regards to internal controls, they are responsible…