Generally Accepted Auditing Standards Generally accepted auditing standards are defined as a systematic set of guidelines that are used by auditors when conducting audits for a company’s finances, these standards are used to ensure accuracy, consistency, and verifiability of the auditors reports (Investopedia, 2013). This paper is going to discuss the elements of generally accepted auditing standards and how these standards apply to compliance, financial and operational audits. There will also be discussion about the Sarbanes-Oxley Act of 2002 and the Public Company Accounting Oversight Board (PCAOB) and the effect they have on auditing publicly traded companies, and the requirements that the Sarbanes-Oxley Act and the Public Company Accounting Oversight Board (PCAOB) have placed on auditors. There are ten generally accepted auditing standards that are the most recognized in regards to auditing in the accounting profession. The ten generally accepted auditing standards are broken down into three categories as follows general standards, standards of field work, and standards of reporting.
A competency assessment should therefore cover both of these aspects and any staff development programme should be designed with this in mind. A competency assessment framework should also be designed from the perspective of the task to be performed rather than from the perspective of the knowledge base. For example, a manual handling competency assessment should have as its core objective the ability of the person to perform a range of manual handling techniques. This ability should be underpinned by a thorough understanding of the knowledge of physiology and manual handling theory. In many cases, manual handling training consists solely of training in underpinning knowledge followed by a practical demonstration of techniques.
TABLE OF CONENTS INTRODUCTION PG 1 COMPANY EVALUATION PG 2 COMPLIANCE AND RECOMMENDATION PG 4 SUMMARY / CONCLUSION PG 5 REFERENCES PG 6 Introduction The primary objective of Accounting Ink, is to provide LJB Company with the required information to consider the regulations for converting to a publicly traded company. Within this analysis we will identify internal controls currently being used within business operation and the required mandated internal controls enforced by the Sarbanes Oxley Act. Internal Controls are established and or regulated by the Sarbanes-Oxley Act. There are six principles of internal controls 1) Establishment of responsibility, 2) Segregation of Duties, 3) Documentation Procedures, 4) Physical Controls, 5) Independent Internal Verification and 6) Human Resource Controls (Keller, 2012). Companies and their independent accountants or auditors should report the effectiveness of the companies internal controls based on these six principles.
The problems faced currently are: a. Information Systems at IW have developed into system with “niche” (exception to current standards) and “sunset” (outdated) technologies, leading to higher IT costs. b. Because of the lack of sustainable coordination, “Shadow IT groups” have been developed within the business units resulting in substantial IT resources that were neither being managed nor considered in the high costs under scrutiny within the IT function. c. Due to lack of standard data definitions, “several versions of truth” could be extracted from the IW depending on the way of extraction.
This also includes establishing a private-sector regulator to oversee the auditing profession to combat accounting fraud, and enhancing financial disclosures. Companies are under more pressure to comply with SEC and Sarbanes-Oxley Act after recent and growing concerns about their ethical behaviors. Role of Ethics and Compliance in the Financial Environment Starbuck’s role of Ethics and Compliance in the financial environment applies to the Chief Executive Officer (CEO), Chief Financial Officer (CFO), comptroller, and other financial leaders. The company’s code of ethics encompasses
Likewise, in the case of bad or doubtful debts, an estimate for provision is usually done to know as to how much of the trade receivables the company might not be receiving. This provision is created to safeguard the company from the losses from debts. Given these points, estimation appears to be beneficial. However, “estimates are inherently subjective and therefore lack precision as they involve the use of management's foresight in determining values included in the financial statements” (Accounting-simplified.com, 2013). They can sometimes downsize the dependability on the
2.2.8.Challenge and Pitfalls of BSC Implementation Kaplan and Norton (2001), stated that although many companies enjoy the benefits from their Balanced Scorecard management systems, implementation failures do occur. More often than not, these disappointing results are self-inflict, owing to factors internal to the business rather than attributable to outside events. These pitfalls tend to fall into two types: design failures and /process failures. Design Failures Kaplan and Norton (2001), argued that some failures occur when companies build poor Balanced Scorecards. This implies that, the organization may use too few measures in their perspectives, failing to obtain a balance between the outcomes they are trying to achieve and the performance
This no doubt at times is a reality because of budgetary restraints common to many not for profit groups. There are also many employees who feel that because they work for a not for profit, they should not expect similar compensation to those in the for profit realm. Another reason for this tendancy is that some not for profit organizations do not feel an obligation to provide compensation anywhere near the same level as for profit corporations. Instead they rely more on the self sacrificing spirit of the employee to want to make a difference in their community. (Nonprofit Organizations) What can not for profits do to attract qualified employees?
(Osmond, 2014) Accountants do not always follow the moral guidelines set out by the company’s managerial accounting and thus creating ethical problems within the business. The resultant effect of not following the set out moral values is that stakeholders lose confidence with the company’s financial stability. Ethics will be important in ensuring that the accountants always prepare the books of account in time and update them in time. The accountants will also be in a position to report correct, accurate and ethical information on the financial position of the organization (Osmond, 2014) Managerial accounting is characterized by forecasting for the future sales of the business. It focuses on the users of the company’s business details.
The board’s action depends on regulations, laws and shareholders in general meeting. The auditor's role is to supply the shareholders with an objective and external inspect on the directors’ financial statements which form the foundation of that reporting system. The objective of the audit Committee is to raise the standards of corporate governance and the level of confidence in financial auditing and reporting by indicating obviously what it sees as the respective liabilities of those involved and what it believes is expected of