The cheating management is providing fake accounts and incurring inherent internal audit risks, however, it is the external auditors’ responsibility to remain a critical and suspicious thinking over these accounts and investigate any further misrepresentations in the publicly released financial statement. The audit team should also include more auditors in their discussion of the suspicious accounts and come to an integral and practical measure to dig deeper into the target company’s financial
This account can be the target of fraud in the organization because it can be intentionally misstated and violate the accuracy assertions. Employees can easily misstate the amounts that a fundraising event actually cost the organization and pocket the discrepancies. The auditor should do analytical procedures and substantive tests in order to detect these misstatements. Additionally this account should be analyzed and compared to the bills the organization has on file. The final account that is on the balance sheet under the net assets and fund balances of the balance sheet would be the unrestricted net assets account.
They can easily use fraud to authorize payment for a false invoice. The accountant also should not be able to print checks and complete the bank reconciliation. It allows the accountant to perpetrate fraud because they have access to blank checks to write fake checks and then cover it up with their record keeping responsibility. Along with segregation of duties, this also violates independent internal verification. A different employee, separate from personnel responsibility for the information, should make the verification and should report any discrepancies to management.
The company should have been able to follow up with all venders and customers to attest to the validity of the financial statements and they were not able to do this and not able to gather the “appropriate and sufficient evidence” needed. When a client will not allow the auditor to gather evidence needed to perform a correct auditor then the opinion can be affected. The auditor cannot attest to the fairness of the financial statements if the evidence is lacking or
Internal attacks can be more difficult to find as attackers have the potential to remove any evidence of the attack more easily as they have more knowledge or access rights on the system as opposed to an outside attack. Attacks can be administrated via removable devices such as a USB that could contain some form of malware on it such as a virus. Most internal attacks are conducted by unhappy employees who want to disrupt the organisation by using the knowledge they obtained in the organisation, against the organisation. Additionally, the employee may want to gain access to important data in order to infiltrate and sell the information onto another competing organisation. The
This would be important for accounts receivable - money that is owed by a customer for products/services. Representing a company in small claims court requires one to be familiar with the law and how it relates to accounting practices. In the Mack v. Edenwold Fertilizer Services Ltd. case, if Mack had a knowledgeable accountant that was familiar with the law, he may have been advised not to sue as the illegality of the situation would have resulted in a loss. In turn, this advise would have saved Mack both time and
The second chapter in Freakonomics asks the reader the following question: “How is the Ku Klux Klan like a group of real estate agents?” It is obvious the authors are not implying that the Ku Klux Klan engages in real estate transactions; nor does it imply that the real estate industry is filled with established terrorist hate groups. According to the authors, these two groups share a common trait in their dependence on “secret” information. Not only do the members of both parties need to possess the information necessary to succeed, but secrecy of the particular information is imperative, as well. The information they posses not only drive their success, but can be a liability as well. The Ku Klux Klan originally began as a social
In my opinion, evidence based practice can be misleading because of the use of the word evidence. Just because it is called an evidence based practice does not mean it is a cookie cutter solution to every case or offender. The uses of these programs are going to depend on human intervention to ensure the program fits both the needs of the community and the needs of the offender. If the community does not buy into the practice or feel secure with the practice intention then it will fail. The same is true with the offender, if they do not have full buy in or are placed in the wrong program that does not meet their needs
Both will experience extreme consequences from unethical behavior and affects to the validity of service. Research has revealed that organizations administrators can jeopardize an organizations commitment and service value due to non-coercive influence. Franchisors and retail companies must be cognizant of the significant factors of negative influence of coercive power and the positive of noncoercive sources in creating ethical values, as the attempt to implement strategy for deviating unethical behaviors (Biong, Nygaard, & Silkoset,
According to Kastellec, it is the responsibility of records managers to ascertain the origin of each record within their custody (30). Kastellec further stresses the importance of ascertaining the source of the information and recommends that information professionals ask the following questions: Who are the creators? Was the material published or unpublished? and, Does the creator owns the intellectual rights to the material. These are very precarious questions that one should ask in an effort to be on the safe side because these questions will avoid any legal actions in the