The operational audit studies the specific parts of an organization with the purpose of measuring its performance. Performances are measured in terms of effectiveness and efficiency such as auditing shipping and receiving or the sales departments. The benefit of these types of audits can positively affect the profitability of the organization. The financial audits, which we are doing, consist of auditing financial statements. The purpose of the financial statement audit is to ensure the entity being audited is preparing the financial statements in conformance with General Accepted Accounting Principles (GAAP).
Ethicality of Accounting Activities Learning Team E - Ashley Horne, Brochelle Shirley, Erika Schmidt, and Mareta Guerrero ETH/376 September 30, 2013 Tammie Holland Ethicality of Accounting Activities To evaluate the ethicality of accounting activities, Learning Team E will review the Cynthia Cooper and WorldCom case using the following criteria. This review will identify the key accounting activity involved in this case and evaluate the accounting activity in terms of the AICPA Code of Professional Conduct. Additionally, determine how the accounting activity was or was not equitable to internal and external stakeholders and which aspects were ethical or unethical. Finally, through the identification of key team members in this case, this review will explain his or her ethical or unethical actions and how those actions influenced the events that occurred. Key Accounting Activity Involved The key accounting activity involved in the case of Cynthia Cooper and WorldCom was capital expenditures, which is defined as “…the funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment” (Capital Expenditure - Capex, 2013, para.
The audit for the financial statements will include evidence supporting amounts and disclosures in statements, examining, accounting principles used assessment, estimates made by management, evaluating all of the financial statements overall. The internal control over financial reporting audit will be acquiring an understanding of internal control over financial reporting, evaluating and testing the design and operation of the effectiveness of internal control and conducting procedures as necessary. The internal control over financial reporting within a company is meant to provide a reasonable assurance as to the reliability of financial reporting and for the preparation of the financial statements for external purposes in accordance to the generally accepted accounting principles
The Act was designed to promote honest and ethical conduct; full and accurate disclosure in periodic reports; and compliance with applicable government rules and regulations. The sections in the act that impact corporate responsibility address education and knowledge, accountability, control, fraud, obligations, and truth in accountability. Section 302 of the Sarbanes-Oxley Act introduces the requirement for several certifications regarding periodic financial reports. The signing officers must certify that they have reviewed and approved the report, and that they have evaluated the company's internal accounting controls within the preceding 90 days, and reported honestly on their findings. Under Section 404 of the act, these findings must detail any uncovered control deficiencies or instances of employee fraud, and must also be reviewed and attested by the registered accounting firm.
True (f) The objective of financial reporting is the foundation from which the other aspects of the framework logically result. True E2-4 Instructions Identify the appropriate qualitative characteristic(s) to be used given the information provided below. (a) Qualitative characteristic being employed when companies in the same industry are using the same accounting principles. Comparability (b) Quality of information that confirms users’ earlier expectations. Confirmatory value (c) Imperative for providing comparisons of a company from period to period.
As an auditor, understanding and testing internal control over financial requires knowledge of standards applicable to the corporation established by GAAP or IFRS. Section 404 of the Sarbanes-Oxley Act requires mandatory reporting on internal controls by management and independent auditors. To obtain a system of internal control as mandated by Section 404 of the Sarbanes-Oxley, policies and procedures designed to provide reasonable assurance of the companies’ effort in achieving its objectives and goals. Committee of Sponsoring Organizations of the Treadway
The GAAS consist of three categories that include the ten standards which are called general standards, standards of field work, and standards of reporting. * The general standards convey the characteristics of acceptable training, mental attitude, and the due professional care that an auditor must exhibit (Boynton & Johnson, 2006). The standards of field work provide details of the requirements that need to be met before the audit can begin. The work needs to be sufficiently planned and have a knowledgeable understanding of the organization including its internal controls. This is necessary in order to assess the risk of misstatement of the financial statements, whether due to a mistake or fraud.
Reporting Practices and Ethics Paper Sharon Tucker HCS/405 May 13, 2013 Elizabeth Caissie Abstract The implementation of financial reporting and ethical standards are crucial for the growth and progression of an organization. Reporting fairly and accurate data will help control measurements that may address theft and/or fraud within the structure. Ethical standards are vital for the development in an organization’s set rules and policies in having quality in the services provided including integrity, values, and delivering effective outcomes in honesty. Generally accepted accounting principles (GAAP) are set guidelines which indicate rules, regulations, and procedures that are implemented for the maintenance and/or monitoring records. An organization that provides a financial statement to the public, investors or government funding entities must follow the set standards developed by Financial Accounting standards Board (FASB).
The Sarbanes-Oxley is the act of 2002. This act consist of originals names of the Investors Confident Act, Public Company Accounting Reform, Corporate Accountability Act, Investors Protection Act of 2002, and many more. The main purpose of these Acts is to focus on legislation. This Act is to support the public with support, and to maintain at a high level of confidence in the financial reports of public companies. SOX were introduced to be known with its purpose.
Full Disclosure Paper Gabriela Jimenez ACC/421 Intermediate Financial Accounting I Instructor: Beverly Halfacre Due on 03/17/08 What is the full disclosure principle in accounting? The full disclosure principle is a principles from the Generally Accepted Accounting Principles (GAAP) – where the amount and kinds of information disclosed should be decided based on trade-off analysis as a larger amount of information costs more to prepare and use. Information disclosed should be enough to make a judgment while keeping costs reasonable. Information is presented in the main body of financial statements, in the notes or as supplementary information The full disclosure principle states that any future event that may or will occur, and that will have a material economic impact on the financial position of the business,