Internal audit

chief financial officer of WorldCom. The WorldCom CFO did not tell Andersen about the line cost transfers nor did he consult with Andersen about the accounting treatment. Upon recently learning of the transfers, Andersen conferred with the WorldCom audit committee and new management, and advised the company that WorldCom’s financial statements for 2001 should not be relied upon” (Accounting Web, 2002). Andersen lost their independence, violated the trust of the public and breached several…

Company Fraud In the 1970’s “fair trade” laws allowed manufacturers to require retailers to sell merchandise at the same price to avoid price competition for their products (Antar, 2011). This type of regulations force Eddie Antar to look for a different alternative in order to remain in business. It appears as if his only options were to purchase overseas and overstock from other retailers. Crazy Eddie stores had one goal in mind; sell a product to every customer that walked into their stores.…

For my person to be researching, I am covering Bernard Ebbers. Ebbers committed fraud, and he tried to merge his company with Sprint. This action was brought to the attention of the Department of Justice. Who immediately dashed this possibility. Ebbers company had an investigation with the SEC. Which led to the bankruptcy and to his eviction. Bernard owed $400 million in margin calls. And he convinced the board to lend him that money, so that he wouldn’t have to give up important blocks of the…

allocating the blame to the auditors by questioning their extent of their testing of controls and transactions. As a result, in an article written by Barry N. Winograd and Robert H. Herz in 1995, they gave auditors insight on how they could better audit derivatives. First, they should fully understand the entity’s use of derivatives and in order to do so, “the auditor must be sufficiently involved with operational areas outside the financial reporting group, most notably the treasury function”…

Overview Fraud has become common occurrence in business world. And organizations lose considerable chunk of their hard-earned revenue to fraud. Prevention and Detection are two methodologies to handle a white-collar crime like business fraud. Wisest approach towards any illegal and inappropriate activity is to prevent it from occurring in first place. Prevention is the most economical way of tackling fraud. Barriers to Fraud Prevention Fraud prevention is challenged by several barriers which…

♣ to the audit committee, as in the GM case. NYSE requirements require the audit committee to discuss policies with respect to risk assessment and risk management. However, the NYSE commentary clarifies that the “audit committee is not required to be the sole body responsible for risks assessment and management” [See Part I, Exhibit C Rule 303A.07(b)(iii)(D)]. If the board allocates risk responsibilities to the audit committee, these responsibilities should be thoughtfully addressed in the…

Sherwin-Williams corporation, we collected data at both the corporate and retail level. Two current Sherwin-Williams employees, Samantha Grayshaw and Alex MacLellan assisted in data collection. A situational analysis was also conducted to understand the internal and external environment of the organization. This report highlights the strengths and areas of improvement of the current performance management system using Grayshaw and MacLellan as case studies. It concludes with three…

Thank you for your consideration on potentially interested in having audit for your company, Scottish Treats Ltd and reaching out to our firm. The queries you laid out in your letter are a great sources of information in order to determine that the company needed in having an audit. In the next part of the letter, I will be explaining the answers to your queries and clearly clarify whether the company need in having an audit. The information for the company hoping to go for listing on stock…

has the responsibility to plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement whether caused by error or fraud. The Auditor has standards of fieldwork that should be used as a guide to fulfill their responsibility. These standards are covered in SAS 99. Fraud is the intentional act that results in a material misstatement in financial statements that are the subject of an audit. There are two types of misstatements relevant…

section of their company to be very complicated and susceptible to fraud. When an auditor is approached to complete an audit of DOW’s transfer of financial assets, there are a few steps that need to be taken in order for the auditor to protect himself. The auditor needs to learn about DOW and its environment, assess the risk of material misstatement and look into designing and planning audit procedures needed to complete the…