A customer is not liable for the amount of the overdraft if the customer did not sign or benefitted from the proceeds of the action. §4-401(b) This is a difficult scenario, the bank may be forced to re-credit Smiths account the $495. Is the bank without a remedy? According to 4-208: When a check is deposited into a bank and sent through to the bank upon which it is drawn, the depositary bank warrants that the item has not been altered and that it is entitled to enforce the instrument. If there is a problem with the indorsements, or if the check has been altered, the payor bank can bring a claim against the depositary bank for breach of the warranty.
We are primarily concerned about controls over the reliability of financial reporting and the controls over classes of transactions, as the accuracy of the accounting system outputs depends on the accuracy of inputs and processing. We have significant responsibility for the discovery of material fraudulent financial reporting and misappropriation of assets, and must perform audit procedures to identify noncompliance with laws and regulations that may have a material effect on the financial statements. Internal controls, if properly designed and implemented, can be effective in preventing and detecting fraud. Therefore, we are concerned with Apollo’s internal control over the safeguarding of assets and compliance with laws and regulations if they affect the fairness of the financial statements. Although we are less concerned with controls that affect the efficiency and effectiveness of the company’s operations, we will pay attention to controls affecting internal management information, which is an important source of evidence that helps to determine whether financial statements are presented
SOX also sought to strengthen consumer and investor confidence and confidence in financial information by changing the auditing procedure and making management more accountable for fraud prevention, catching, and existence within the pot. Lastly, it shielded whistleblowers from corporate retribution and endowed them with protecting freedoms. Based on aforementioned information, I would like to consider the implementation of SOX would have been an immediate check to financial statement fraud in its initial launch in 2002; unfortunately, there will invariably be somebody who believes she is above reproach and disregards societal measures of intellect, decency and control to pursue her own
E2-1 (a) Accounting rule-making that relies on a body of concepts will result in useful and consistent pronouncements. TRUE (b) General-purpose financial reports are most useful to company insiders in making strategic business decisions. FALSE. General-purpose financial reporting helps users who lack the ability to demand all the financial information they need from an entity and therefore must rely, at least partly, on the information provided in financial reports. However, an implicit assumption is that users need reasonable knowledge of business and financial accounting matters to understand the information contained in financial statements.
Why or why not? Week 2 DQs Financial statements are an important product of the accounting process. Provide an example of an internal user. How could he or she be harmed by fraudulent and unethical financial statements? Financial statements are an important product of the accounting process.
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
This is necessary in order to assess the risk of misstatement of the financial statements, whether due to a mistake or fraud. The evidence obtained through the audit needs to be sufficient and complete (Boynton & Johnson, 2006). The standards of reporting, the auditor is required to imply that the financial statements were provided in accordance with the Generally Accepted Accounting Principles (GAAP). Otherwise, the report needs to be recognized the reasons in which the principles have not been observed. The audit report needs to contain an opinion concerning the financial
Adhering to compliance is crucial to prevent companies from failing and taking huge financial loses. McBride must implement a system of audit compliance committees that will help mitigate non-compliance. Audit compliance committees will review financial documents, including receipts, documents, stocks, trades, shares, investment numbers and any other financial documentation. Non-compliance includes behavior and unethical actions performed by senior management that will be audited and monitored by the compliance committee. The committee will consist of internal and external auditors who will each have a part in ensuring McBride continues to perform and service the needs of customers
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.
The damage could be from internal or external. An employee could unintentional give out company information just because they are not trained as to how to handle some sensitive information. There are also the intentional internal threats that result from employees taking advantage of security flaws. There are also the skilled external criminals who aim at destroying or stealing data. With information system security, you are assured of quality measures to prevent all these kinds of situations by identifying