If Jason underestimates the dollar amount of ending inventory, what effect will it have on net income for the current accounting period? 3. Write a short paragraph explaining why a physical inventory should be taken at least once a year. 4. In groups of three or four, make a list of possible reasons that the actual ending inventory might not agree with the ending inventory according to a computer system.
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.
BYP 1-6 (a) Who are the stakeholders in this situation? The stakeholders in this situation would be the vice-president of finance, the president of Robbin Industries, Wayne Terrago, and the users of Robbin Industries’ financial statements. Each of these stakeholders will be affected by any choices Robbin Industries make that affect the company’s financial statements. These individuals each have something to lose by the company providing falsified or inaccurate financial statements (Weygandt, Kieso, & Kimmel, 2010). (b) What are the ethical issues involved in this situation?
The Board of Directors also seems to question the validity of YAG’s current financial information as the bookkeeper prepared the prior years’ financial statements on a cash basis. To set this year’s materiality we look toward CAS 320 for guidance and consider the user’s needs and risks. A large amount of YAG’s funds come primarily from government grants. One of the requirements of the government grants are an audit of YAG and certified documentation and therefore the government is considered a primary user of YAG’s audited financial statements. Materiality of NFP organizations should be based on the Total Assets figure.
The consultation involves a determination on whether financial statement reporting follows regulations and guidelines established in the Sarbanes-Oxley Section 404. The consultation also includes identity of internal risks detected within Apollo Shoes. A brief synopsis of our responsibility concerning the detection and reporting of fraudulent activity follows at the end of this engagement letter. Sarbanes-Oxley Section 404 An integral part of a financial audit includes an evaluation of the internal controls in the company's financial reporting. As an auditor, understanding and testing internal control over financial requires knowledge of standards applicable to the corporation established by GAAP or IFRS.
| Financial Restatement | Accountant 537 | | Jocelyn Olivares | 2/19/2012 | Instructor: Corrine Hasbany | After the release of the statements, errors can be found by the company, company’s internal auditors or external auditors. If the error is deemed to be material to the financial statements, those statements are required to be corrected and re-issued to users. Materiality relates to a financial statements item’s impact on a company’s overall financial condition and operations (Kimmel, Weygandt, & Kieso, 2007, P 69). Materiality is determined by whether the error would cause users to come to inaccurate conclusions in their analysis. Immaterial would be something that is too insignificant to impact the
B) Estimates may be used without disclosing their use to the IRS. C) Estimates may be used, but Jane should disclose their use to the IRS. D) The Statements on Standards for Tax Services do not address the use of estimates. 78) During the course of an audit, a CPA discovers an error in a prior return. According to the Statements on Standards for Tax Services, the CPA should A) ask the client for permission to disclose the error to the IRS.
Section 404 of the Sarbanes-Oxley Act directs the SEC to adopt rules requiring annual reports of companies with publicly traded securities, other than registered investment companies, to disclose management’s assessment of the effectiveness of the company’s ICFR and an auditor’s independent attestation to the effectiveness of those internal controls. These rules were adopted by the Commission on May 27, 2003. The act gave large filers that are traded publicly till the end of the fiscal year in 2004 to become compliant. Internal controls are in place to require reporting of financial reports to be analyzed and audited. Companies are also hiring internal personnel to ensure accuracy and high ethical standards are being followed.
Financial Statements ACC/290 For a successful business and effective performance of the company is necessary to know basic assumptions of the analysis of financial statements. Financial statements is the understanding that the analysis should be subjected to observation, testing, evaluation and formulation of a diagnosis process that took place in company and that as such, are summarized and embodied in the financial report. Financial analysis is exhaustive research quantification, description and evaluating the financial status and performance of business operations. Companies are required to at the end of each financial year, after all business changes its accounting records locked, in order to determine the exact and final state which has the purpose of compiling the financial statements. This report contains information on the financial position, performance and any changes affecting the financial position of
Include references to any tax code or publications that you use for your answer. week 4 Explain why the tax laws required the cost of certain assets to be capitalized and recovered over time rather than immediately expensed. How does this reasoning compare with the reasoning for financial accounting purposes? Include references to any tax code or publications that you use for your answer. Why are capital gains and dividends taxed at a different rate than ordinary income?