PCAOB is authorized to investigate and sanctioned public accounting firms and every individual associated with the firm. Yes, it has assistance from, The Office of Research and Analysis (ORA) supports PCAOB and oversees the board’s activities. ORA identifies audit issues that would make the audit fail. Sanctions could be a fine and/or suspension or revocation of the firm. The Federal Trade Commission is an agency to protect consumer from anti-competitive business practice, (monopoly) I believe that is a waste of an agency.
Case 3.5 Goodner Brothers, Inc. OBJECTIVE: To better understand the nature at which fraud can occur in a business, specifically due to weak internal controls, and to examine the characteristics of a fraudster. IMPORTANT HIGHLIGHTS: * Goodner Brothers, Inc.’s sloppy accounting practices and lax control over its inventory opened doors for theft and other types of fraud to occur internally * The lack of attention and importance that Goodner Brothers, Inc. put into their internal control system in order to cut corners * The importance of proper and professional auditing procedures in detecting fraudulent activity in a company PROBLEMS FACED IN COMPLETING THE CASE: * Goodner Brothers, Inc. focused much attention on margins and profits, they scrimped on their security and operating expenses which in turn increased their internal control risk * The ease with which an employee, familiar with the company’s internal controls and procedures, could embezzle money LESSONS LEARNED: * A person’s external pressures can be so intense that these pressures can influence even a good, hardworking employee to commit fraud towards their own company. * It is worth the extra detail, time, and expenditures spent towards a company’s internal control measures because even the most ‘loyal’ and long-time employees may steal. QUESTIONS: 1.
Malicious attacks can be brought on by disgruntled employees that want to get back at the organization by disrupting the flow of operation which causes financial loss for the company. There attacks can damage security systems immobilizing the networks for days while security teams try to get the system repaired and back to operation. All kinds of data are vulnerable to these types of attacks because they happen within an organization by people that have access to the credentials required to perform malicious attacks. The potential risks for employee negligence can be high too as small employee mistakes can lead to bigger problems down the road. According to Benson (2012), “Users, data entry clerks, system operators, and programmers frequently make unintentional errors that contribute to security problems, directly and indirectly” (Christopher Benson, 2012).
Week Two Learning Team Reflection During Week 1, we discussed the basic components of business research. We were shown how to recognize dilemmas and address issues related to corporate America, such as declining sales, increase in costs and any other issues that may have adverse impact on business. With that, business research becomes a problem solving tool in the decision making. However, ethics must first be weighed to ensure the social bottom line and productivity remains at its highest. Unethical behavior undermines positive gains.
Kristen Howton ACCT 562 Week 3 Assignment Professor Prevratil Case Study The case study describes a billing scheme. A billing scheme is one where false invoices are produced and processed where the checks are then turned around and cashed in by the perpetrator. A perpetrator is described as one who has committed an immoral act of wrongdoing (The DIctionary, n.d.). In the case study, the situation has arisen when a new auditor has come in and has taken a proactive approach in wanting to understand the company and how their accounts work. The auditor was originally reviewing recently submitted invoices in attempts to gain a further insight on the way the company coded, capitalized, expensed, recorded, etc, their transactions.
An internal whistleblower reports the misconduct to another person working within the place of business, such as another employee or a superior. An externalwhistleblower, however, reports the misconduct to an outside agency, such as the media, a lawyer, law enforcement, or special protective agencies. In many countries, the whistleblower is protected by law. The United Kingdom, for example, passed the Public Interest Disclosure Act in 1998. This act protects the whistleblower from being fired when reporting malpractice or other forms of misconduct.
Sarbanes-Oxley Act is designed to make all personnel accountable for their action or inactions. For example, external, internal, and foreign attorneys are required to report violations to CEO/CFOs. If the officer(s) do not respond to the evidence provided by the attorney(s), they are obligated to report the evidence to the audit committee or another committee of the board. The act also provides protection to whistle blowers under Title VIII: Corporate and Criminal Fraud Accountability Act of 2002 (American Institute of CPAs,
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.
| Case Analysis | Empress Luxury Lines | | Naomi DukesNovember 3, 2012MGT 500Dr. Glenn RodriguezStrayer University | | | Case Analysis: Empress Luxury Lines Introduction An ethical issue is present in a situation when the actions of a person or organization may harm or benefit others (Daft, 2010, p. 130). Ethical or unethical decisions in business can have far reaching implications because of the many stakeholders involved. The Empress Luxury Lines case study details the decisions and activities of the organization and its upper level management. Kevin Pfeiffer, a computer technician on new hire probation, was asked to act unethically in regards to an insurance claim.
CHAPTER 4 - Internal Controls, Accounting for Cash, and Ethics ANSWERS TO QUESTIONS 1. The accounting scandals of WorldCom and Enron are partially responsible for the passage of the Sarbanes-Oxley Act. SOX requires public companies to evaluate their internal control system. 2. Internal control is the process designed to ensure reliable financial reporting, effective and efficient operations, and compliance with applicable laws and regulations.