15 research outputs found

    An Internal Control Evaluation Tool For Advertising Revenue In The Newspaper And Magazine Publishing Industry

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    Even before the recent economic downturn, the newspaper and magazine publishing industry had been experiencing unprecedented change, with some companies facing an immediate need to either invent a new business model or else cease operations.  The current economic slowdown has, in many cases, exacerbated those challenges.  These trends have had the effect of increasing the risk of fraudulent financial reporting.  The revenue cycle continues to be one of the most important areas for auditors to examine for possible fraud and one for which strong, comprehensive internal controls are especially important (AICPA 2002).  This paper presents an internal control review checklist for advertising revenue in the newspaper and magazine publishing industry.  This checklist may be used by independent auditors as a general benchmark in performing a preliminary evaluation of a company’s internal controls over advertising revenue.  In instances where important internal controls on the checklist have been omitted from the client’s system, the auditor should consider whether the omission increases audit risk.  The checklist may also be used by CFOs or controllers in the industry to help determine whether their company’s internal control system is adequate

    An Internal Control Evaluation Tool For The Construction Industry

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    This paper presents a Control Objectives Reconciliation, a tool that independent auditors of clients in the construction industry should find useful in performing a preliminary evaluation of the client’s internal control system.  Auditors are advised to compare their client’s control objectives with those presented in Exhibits 1 through 7.  Where the client’s system appears to omit significant control objectives, the auditor should consider the risks brought on or magnified by the omission during the preliminary evaluation of the client’s internal control system.  The Control Objectives Reconciliation is also potentially useful to Construction Company CFOs or Controllers who may be concerned about the adequacy of their company’s internal control system.  The Reconciliation also highlights for Construction Company CFOs or Controllers those internal controls deemed to be important to their external, independent auditors

    Revenue Process Internal Control For Manufacturers: An Evaluation Tool For Independent Auditors And Managers

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    Effective management of the revenue process is critical to the success and long-run viability of any business.  The revenue process also entails an elevated risk area for financial reporting fraud (AICPA 2002; Beasley et al., 2010).  Accordingly, this important process demands heightened attention from independent auditors and company managers, and internal control activities must be considered as part of the ongoing evaluations of this important area.  This paper presents a tool for evaluating internal control objectives and activities pertinent to the revenue process for companies operating in the manufacturing sector.  This evaluation tool may be used by independent auditors as a general benchmark in performing a preliminary evaluation of a manufacturing client’s internal control over the revenue process.  Independent auditors who will find the tool most useful will primarily be those wishing to comply with U.S. Generally Accepted Auditing Standards (GAAS), including those performing integrated audit engagements in accordance with Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 5 and the new requirements set forth in the Committee of Sponsoring Organizations of the Treadway Commission’s (COSO) Internal Control – Integrated Framework.  In instances where important internal control activities have been omitted from the client’s system, the auditor should consider whether the omission increases the risk of material misstatement.  This tool may also be used by managers to evaluate the adequacy of their company’s internal control activities within the revenue process

    Corporate Inversions And Fair Play

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    A Corporate inversion is a process that a company undergoes to change the domicile of the parent corporation in a multinational corporate conglomerate to a country other than the United States. J. S. Barry (2002) quotes U.S. Senator Max Baucus, Chairman of the Senate Finance Committee, as saying: "Prominent U.S. companies are literally re-incorporating in off-shore tax havens in order to avoid U.S. taxes. They are, in effect, renouncing their U.S. citizenship to cut their tax bill. This is very troubling, especially now, as we all try to pull together as a nation." Senator Charles Grassley (R-Iowa), the ranking Republican member of the Finance Committee, has called inversions "immoral." Stanley Works, a corporation based in Connecticut, planned to re-incorporate in Bermuda. A Democratic Representative from that state, James Maloney, said, "Connecticut hasn't seen such a shameful day since Benedict Arnold sailed away." Stanley Works buckled under political pressure and did not go forward with the planned inversion. This paper addresses the current practice of corporate inversions, and reviews the current legal and political actions taken to address them

    Video Planet: A Teaching Case On The Detection Of Fraudulent Financial Reporting

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    This paper presents a teaching case intended for use in an undergraduate auditing or fraud class.  In the case, readers encounter an audit client, Video Planet, Inc., which exhibits many of the symptoms of companies that have been found to engage in fraudulent financial reporting.  The case is intended to develop students’ skills at detecting and interpreting warning signs of fraudulent financial reporting.  Section One presents the facts of the case.  Section Two presents decision-guiding questions.  Section Three provides teaching notes.  Section Four provides a summary of the paper

    The Consideration Of Fraud In A Financial Statement Audit: Some Study Questions

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    In October 2002, the Auditing Standards Board (ASB) issued Statement on Auditing Standards (SAS) No. 99, Consideration of Fraud in a Financial Statement Audit in response to recommendations from the Fraud Task Force. SAS No. 99 is intended to improve auditor performance during audits and to increase the likelihood that the auditors will detect fraudulent financial reporting if any is present. Since fraud awareness is such a major part of any audit, accounting students should be well versed on the content of SAS No. 99. However, not all accounting students read SASs in detail. Then how do accounting educators get this important content to these students

    Wayne Manufacturing: A Teaching Case On The Detection Of Misappropriation Of Assets

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    This paper is a teaching case intended for use in an undergraduate auditing or fraud examination course.  Students are introduced to Wayne Manufacturing, a medium-sized firm in the Midwestern U.S.A. that manufactures parts for companies such as General Motors (GM) and Ford.  Wayne Manufacturing has some conditions present that put it at risk for misappropriation of assets.  Since it is not infrequent that such misappropriations are concealed in the accounting records, these conditions also increase the risk of fraudulent financial reporting.  Section One presents the facts of the case.  Section Two presents decision-guiding questions for students to consider.  Section Three provides teaching notes.  Section Four provides a summary of the paper

    Wayne Manufacturing: A Teaching Case On The Detection Of Misappropriation Of Assets

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    This paper is a teaching case intended for use in an undergraduate auditing or fraud examination course.  Students are introduced to Wayne Manufacturing, a medium-sized firm in the Midwestern U.S.A. that manufactures parts for companies such as General Motors (GM) and Ford.  Wayne Manufacturing has some conditions present that put it at risk for misappropriation of assets.  Since it is not infrequent that such misappropriations are concealed in the accounting records, these conditions also increase the risk of fraudulent financial reporting. Section One presents the facts of the case.  Section Two presents decision-guiding questions for students to consider.  Section Three provides teaching notes.  Section Four provides a summary of the paper

    Incorporating Financial Accounting Research Into The Accounting Curriculum

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    The purpose of this paper is to describe a process of integrating the use of accounting research into the existing financial accounting curriculum in an effort to meet CPA exam research requirements as well as to improve critical thinking, written and oral communication skills, documentation and support, and analysis

    The Consideration of Fraud in a Financial Statement Audit: Some Study Questions

    Get PDF
    In October 2002, the Auditing Standards Board (ASB) issued Statement on Auditing Standards (SAS) No. 99, Consideration of Fraud in a Financial Statement Audit in response to recommendations from the Fraud Task Force. SAS No. 99 is intended to improve auditor performance during audits and to increase the likelihood that the auditors will detect fraudulent financial reporting if any is present. Since fraud awareness is such a major part of any audit, accounting students should be well versed on the content of SAS No. 99. However, not all accounting students read SASs in detail. Then how do accounting educators get this important content to these students
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