5. The confidentiality agreement did limit the scope of the audit performed on ZZZZ Best. It is the job of the auditor to obtain sufficient and appropriate evidence. When Ernst & Whinney were not allowed to follow-up with anyone involved in the restoration process that limited their ability to gather evidence. 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.
Belot’s accounting general manager, Zachariah Crabtree decided to change the accounting method from “conservatism” to “precise point estimate” to record the company’s major discretionary accruals during its second quarter financial report; therefore, the company operating income dramatically has been increased 140 percent higher than the second quarter of prior year. According to AU 230.05(Due Professional Care), an auditor should possess “the degree of skill commonly possessed” by other auditors and should exercise it with “reasonable care and diligence.” Furthermore, based on the statement of AS No. 11 (Consideration of Materiality in Planning and Performing an audit) paragraph 8, “the auditor should determine the amount or amounts of tolerable misstatement for purposes of assessing risks of material misstatement and planning and performing audit procedures at the account or disclosure level. The auditor should determine tolerable misstatement at an amount or amounts that reduce to an appropriately low level the probability that the total of uncorrected and undetected misstatements would result in material misstatement of the
The tax rate today versus your estimated future tax rate. 2. The need for income at retirement 3. The desire to maximize retirement savings 4. A rollover to a Roth IRA makes for a strong estate and retirement planning tool.
This ratio shows that the average collection period in the year was approximately 24 days. This would indicate the effectiveness of Huffman’s collection policies promote rapid repayment. The calculations computed to determine these liquidity ratios of financial information are key components in examining Huffman’s ability to pay off short term debt. This information is necessary in deciding whether it is worth the risk to remain as a creditor of investor of this company. In the case of Huffman Trucking, these ratios impact their customer base, including their contracts with the United States Government and various automotive parts suppliers.
Depository institutions are supposed to be managed to limit risk. Their managers, thus, may not be conditioned to operate prudently in more speculative securities businesses... The case against preserving the Glass-Steagall Act: 1. Depository institutions will now operate in "deregulated" financial markets in which distinctions between loans, securities, and deposits are not well drawn. They are losing market shares to securities firms that are not so strictly regulated and to foreign financial institutions operating without much restriction from the Act.
The long-term cash bonus is based on a period of 4 years with evaluations made after the second and fourth year. This is based on customer surveys; therefore Kroger is ensuring customer satisfaction is an important component of the company. The equity portion of compensation is to ensure the executives interests are aligned with the shareholders and will therefore do what is needed to increase the share price. The prerequisites of life insurance and reimbursement of taxes on non-qualified retirement plans are in line with other companies, but access to the
General is not the holder in due course because they did not acquire the note in good faith. To become a holder in due course, the owner must be in effect a bonafide purchaser and in this case the observance if reasonable commercial standards of fair dealing. The more a holder knows about the underlying transaction, and particularly the more he controls or participates or becomes involved in it, the less he fits the role of a good faith purchaser for value. In this case General had knowledge that Lustro was nearly insolvent at the time of the assignment and that Lustro
d. Business entities will need far less assistance from accountants because the financial reporting process will be quite easy to apply. 26. In the conceptual framework for financial reporting, what provides "the why"--the goals and purposes of accounting? a. Measurement and recognition concepts such as assumptions, principles, and constraints b. Qualitative characteristics of accounting information c. Elements of financial statements d. Objectives of financial reporting 27.
d. Business entities will need far less assistance from accountants because the financial reporting process will be quite easy to apply. 26. In the conceptual framework for financial reporting, what provides "the why"--the goals and purposes of accounting? a. Measurement and recognition concepts such as assumptions, principles, and constraints b. Qualitative characteristics of accounting information c. Elements of financial statements d. Objectives of financial reporting 27.
Question 1: Auditors should not insist that their clients accept all proposed audit adjustments even though those that have an immaterial effect on the financial report. The auditors should be suspicious of any rejection of the clients and have to investigate deeper into the suspicious accounts. Moreover, auditors should not be careless even though they have close relationships with the clients and fear that they would lose potential auditing fees. Question 2: Materiality is a concept or convention within auditing and accounting relating to the importance/significance of an amount, transaction, or discrepancy. The objective of an audit of financial statements is to enable the auditor to express an opinion whether the financial statements are prepared, in all material respects, in conformity with an identified financial reporting framework of Generally Accepted Accounting Principles.