Once a company identifies the economic events, it records those events in order to provide a history of its financial activities. It is important to note here that recording consists of keeping a systematic, chronological summary of events measured in the accepted currency. Finally, the company communicates the collected information to interested users by means of accounting reports. The most common of these reports are called financial statements. To make their reports meaningful, a company reports the recorded data in a standardized way according to generally accepted accounting principles (GAAP).
Statement No. 116 requires not-for-profit organizations to: -- distinguish between contributions received that increase permanently restricted net assets, temporarily restricted net assets, and unrestricted net assets -- recognition of the expiration of donor-imposed restrictions -- disclosures for collection items not capitalized and for receipts of contributed services and promises to give (FINANCIAL ACCOUNTING STANDARDS BOARD, 2008). Statement No. 117 consists of detailed information about the generally accepted accounting principles with regard to how contributions are reported on financial statements. Statement No.
The audit report must show report that management has established and maintained internal controls for financial reporting. Certification of each annual report must be verified by the executive offers of the company, the report must show that they maintained established internal controls. The offices of the company must include in their reports evaluation of the internal controls effectiveness. Included in the reports, there must be reports of fraud that may have an effect that have any effect on the internal controls. The Sarbanes-Oxley Act contains 11 titles that describing rules and requirements for financial reporting in the United States (Wang,
Promulgate GAAP. a. The American Institute of Certified Public Accountants (AICPA) b. The Financial Accounting Standards Board (FASB) c. Government Accounting Standards Board (GASB) d. The Securities and Exchange Committee (SEC) 3. Issue Statements on Auditing Standards.
Establish its’ own code of professional ethics. State Board of Accountancy, American Institute of Public Certified Accountants 6. Issue Statements of Financial Accounting Standards. Financial Accounting Standards Board 7. Impose mandatory continuing education as a requirement for renewal of license to practice as a CPA.
The existence of inventory at multiple locations. C. The effectiveness of controls pertaining to maintenance of perpetual records. D. The care exercised by client employees in taking the inventory. 5) When statistical sampling methods are used by the client in determining inventories, professional standards require that the auditor ascertain the following EXCEPT that the: A. sampling plan has statistical validity. B. appropriate tests of transactions have been applied.
The Public Company Accounting Oversight Board (PCAOB) 1-Explain the major responsibilities of the PCAOB, which was created by the Sarbanes-Oxley Act of 2002. The Public Company Accounting Oversight Board (PCAOB) was created in 2002 to oversee and discipline CPAs and public accounting firms that audit public companies. This five-member board has the responsibility to establish or adopt “auditing, attestation, quality control, ethics, and independence standards relating to preparation of audit reports” for The Securities and Exchange Commission (SEC) registrants. In addition, the PCAOB has the responsibility to: * Register public accounting firms that audit public companies. * Perform inspections of the practices of registered firms.
ACC 403 Midterm Exam Answers http://www.homework-bank.com/downloads/acc-403-midterm-exam-answers/ ACC 403 Midterm Exam Answers Part 1 • Question 1 Recording, classifying, and summarizing economic events in a logical manner for the purpose of providing financial information for decision making is commonly called: • Question 2 ________ risk reflects the possibility that the information upon which the business decision was made was inaccurate. • Question 3 The use of the Certified Public Accountant title is regulated by: • Question 4 The Sarbanes-Oxley Act applies to which of the following companies? • Question 5 Three common types of attestation services are: • Question
Week 1 Homework (2-7, 2-10, 2-16, 2-20, 3-23, 3-25, 3-26) David Carlile Saturday March 3, 2012 2.7 Who is responsible for establishing auditing standards for audits of public companies? Who is responsible for establishing auditing standards for audits of private companies? Explain. Sarbanes-Oxley Act established the PCAOB for auditors of public companies to establish auditing standards. The AICPA established auditing standards for private companies.
Business Law Today (17)6, 27. Retrieved August 16, 2008, from University of Phoenix Online Library, ProQuest Database, (Document ID: 1527868671). Tomkies, M. C. (2008, Jul/Aug). Regulating the subprime market: Finding the right balance. Business Law Today (17) 6, 21.