AC555 You Decide Smackey Dog Foods, Inc Smackey Dog Foods, a privately owned company, audit will still be under the influence of the Securities Exchange Commission (SEC). Though the rules are enforceable for publicly traded companies, they can also be applied to non-public companies the same. As is when auditing public companies, auditors must establish their independence. Independence is one of six principles established by the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct. This particular ethical violation can come into question because of Pete’s, Audit Manager, and best friend Alan’s prior relationship with owner Kim and the bank loan officer.
Requirements similar to those of a publicly held company can be applied to a privately held company in instances regarding to securities, such as those held and being sought by Smackey Dog Foods Inc. Another recommendation would be following the rules of professional conduct set in place by the American Institute of Certified Public Accountants (AICPA), which include objectivity and independence, the public interest, integrity, due care, and scope and nature of services. Audit team members should maintain objectivity, remain free from conflict of interest in discharging professional responsibilities and be independent in both fact and appearance while discharging their duties as an auditor The first step in each audit would be to understand the industry that is being audited. The members of the auditing team performing the audit of Smackey Dog Foods, Inc would need to research the industry and capitalize on any food manufacturing audits that they had performed previously and use their experience towards that of this dog food manufacturing company. Next, the firm would assess the client’s business risk. In this specific situation, the auditor would look at the ability
The AICPA can be defined as the American Institute of Certified Public Accountants. It is a professional organization that is responsible for developing professional accounting ethical values. The AICPA requires that professional accountants are to act responsibly when engaging in accounting services and reviewing sensitive financial information. According to the AICPA website the professional code of conduct provide general guidance on professional responsibilities, the public interest, integrity, objectivity and independence, due care, and the scope and nature of services without establishing specific standards. ("AICPA'S Code of Professional Conduct ", 2006-2014).
Under the SOX, auditors have to be objective and independent otherwise legal sanctions can be acquired. While the above standards are enforceable for the audit of public companies, it can also be useful to the audit of non public companies like Smackey Dog Foods, Inc. Several essential activities are involved in the initial planning of an audit of Smackey Dog Food, Inc. 1. Understand the client’s business and industry. The audit firm can benefit from its experience in auditing other food manufacturers in planning and facilitating the audit for Smackey. The members of the Audit team, the audit manager Pete and two audit staffers Ben and Maureen have to understand the client’s business and industry.
1. How can professional codes of ethics help marketers to make the correct choice? Professional codes of ethics offer direction to marketers to make the correct choice. The American Marketing Association’s Code of Ethics for Professional Conduct provides marketers with conceptual guidance regarding ethical values such as honesty and fairness and the rights and duties of parties in the exchange process. The AMA code asks members to apply the basic rule of professional ethics, which is to not knowingly do harm.
In the case of Smackey Dog Foods, they have many issues with their internal controls and also with assuring that their accounting is adhering to the standards that they need to be, and they have hired outside auditors to come in and perform an audit, which will reveal the many issues that Smackey is currently facing and needs to improve upon. It is not specified whether or not Smackey Dog Foods is a public or a private company – in the case of it being public, then Smackey would be required to have an annual audit by an independent registered CPA firm per SEC rules. While it seems that Smackey Dog Foods is a privately held company, the SEC will still show their influence through the use of US Generally Accepted Accounting Principles (GAAP) for their accounting standards, and also indirectly through the American Institute of Certified Public Accountants (AICPA) and the Public Company Accounting Oversight Board’s (PCAOB) use of Generally Accepted Auditing Standards (GAAS) to be used by the auditors, Keller CPAs. The SEC and the AICPA highly correspond with their standards of independence, objectivity, and integrity, so the influence of the SEC will be felt, regardless of whether Smackey Dog Foods is publicly traded or not. For the planning stages of
Chapter 2, pp. 41-44: Problems 2-7, 2-10, 2-16, 2-20 2-7 (Objectives 2-2, 2-4, 2-5) Who is responsible for establishing auditing standards for audits of public companies? Who is responsible for establishing auditing standards for private companies? Explain. The PCAOB which was established by the Sarbanes-Oxley Act is responsible for providing oversight for auditors of public companies, establishes auditing and quality control standards for public company audits, and performs inspections of quality controls at audit firms performing those audits.
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.
Kokemuller defines legal and ethical practices clearly stating, “Legal practices refer to processes and policies to abide by the law. Ethical practices refer to efforts to meet stakeholder expectations for business activities” (Kokemuller). Zions Bancorporation created the Code of Business Conduct and Ethics Handbook to cover all ethical issues Zions believed should be addressed in its company. There are legal laws all employees of Zions must abide by, but Zions clearly defined all ethical expectations for the company as
So, for example, an accountant must get their sums right and apply for the right tax exemptions for their clients. In the same way, a care provider is expected to be trustworthy, in accordance with their code of practice, and apply suitable skills when carrying out care services. As part of duty of care support workers should: * keep your knowledge and skills up to date * provide a service of no less quality than that to be expected, based on the skills, responsibilities and range of activities within your particular work or profession * be in a position to know what must be done to ensure that the service is provided safely * keep accurate and up-to-date records of the care and