Other attestation standards include specific guidance on other attestation services, again to ensure each CPA practices applicable accounting procedures. The final standard that leads as most important is the Code of Professional Conduct. The Code of Conduct dictates ethical conduct and asserts that all practicing CPAs will act ethically and follow all three former standards and rules. A Code of Conduct is necessary for detouring fraud and ensuring the utmost professional
This process will include the preliminary review, assemble the audit documents, conducting the on-site audit, and then finish and follow up activities. The preliminary review helps to determine how effective the results of the audit will be. By formulating a detailed plan for the audit, this ensures that the timeline, scope of the actual audit procedures, and the audit location, will be met for optimal results. Forming a preliminary list for personnel interviews to be conducted during the on-site review is also a pertinent part of the preliminary review process. Assembling the audit documents is critical for observations and recording information.
This is necessary in order to assess the risk of misstatement of the financial statements, whether due to a mistake or fraud. The evidence obtained through the audit needs to be sufficient and complete (Boynton & Johnson, 2006). The standards of reporting, the auditor is required to imply that the financial statements were provided in accordance with the Generally Accepted Accounting Principles (GAAP). Otherwise, the report needs to be recognized the reasons in which the principles have not been observed. The audit report needs to contain an opinion concerning the financial
The auditor will use CAATs in the higher risk areas for verifying the systems integrity. The auditor will determine which files are necessary to retrieve and request the files from Kudler to import the data into the Audit Command Language (ACL). At this point the auditor will use CAATs for verifying the integrity of the system from the import process results. The auditor will use CAATs to check the risks identified during the planning stage, afterward the auditor will conduct an investigation, reconcile exceptions, and document the CAATs performance results. The auditor will validate Kudler's applications and the objectives to determine if there is in any intentional or unintentional compromising with source codes.
Independence is one of the six ethical principles of the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct. The other principles are responsibilities, the public interest, integrity, objectivity and independence, due care, and scope and nature of services. More specifically, audit team members are required to be objective and independent with regard to the audit by maintaining objectivity and being free of conflicts of interest in discharging professional responsibilities and by being independent in fact and appearance when providing auditing and other attestation services. The SEC has power to establish rules for any CPA associated with audited financial statements submitted to the commission. In here the influence of the SEC is very obvious.
This can be achieved through the following general principles: 1. Establishment of Responsibility - Setting clear expectations of your employees and making sure 2. Segregation of Duties and Segregation of Record Keeping - Making sure that no single individual remains 'unchecked' by others in his or her activities, and that the same people responsible for certain actions are not also solely responsible for recording those actions. 3. Documentation of Procedures - making sure that the expense reports are accurate and that original receipts are used for proof.
Businesses require a tool to measure the execution of objectives. As far as the goals of objectives they are supposed to align with a stated vision and mission. Effective objectives ensure that daily activities align with the big picture or if there will be a need to adjust redirect focus. A balanced scorecard is a tool, generated by Robert S. Kaplan and David P. Norton. Authors Pearce and Robinson (2009) suggest, a balanced scorecard “Is a set of measures that are directly linked to the company’s strategy,” “Directs a company to link its own long-term strategy with tangible goals and actions,” and “Provides a framework to translate a strategy into operational terms” (p. 202).
These principles include Responsibilities, Public Interest, Integrity, Objectivity and Independence, Due Care, and Scope and Nature of Services. Accountants can use these principles as a guide when they encounter questionable requests from their clients, or supervisors, as well as avoiding any conflicts of interest that may arise (Mintz and Morris, 2011). It is important that accountants act ethically in reporting a company’s finances. Investors, as well as the general public rely on information when making financial decisions and whether to invest in a company. Out of the purposes of the AICPA Code of Professional Conduct, three of the most important include public interest, integrity, and due care.
4. Review AICPA Statements on Auditing Standard (SAS) No. 99, “ Risk Factors Relating to Misstatements Arising from Misappropriation of Assets”, found within the text. Assess SAS 99 risk factors and discuss if the risk factors were prevalent in the organization you researched. Give your opinion on whether or not organizations should implement a plan that reviews risk factors on a regular basis to determine if fraud has occurred. Explain why or why not.
This involves examining the facts of the case and asking what ethical issues are at stake. (3) An identification of the norms, principles, and values related to the case. This involves placing the decision in its social, ethical, and, in some cases, professional behaviour context. In this last context, professional codes of ethics or the social expectations of the profession are taken to be the norms, principles, and values. For example, if stock market rules are involved in the decision, then these will be a relevant factor to consider in this step.