Is there sufficient public data for the US to use CPM to determine an arm’s length price?
Category: Accounting
Challenges and Future Directions
Challenges and Future Directions (500 words)
Discuss the main challenges faced by the auditing profession in today’s fast-paced, digitalized business world. This could include the increasing complexity of business transactions, globalization, and the rise of cryptocurrencies. How can auditors adapt to these challenges? Additionally, provide your insights into how you envision the future of the auditing profession.
Modern Audit Techniques and Technology
Modern Audit Techniques and Technology (500 words)
Explain how technological advancements have impacted the audi?ng process. Discuss the application of technologies such as data analytics, artificial intelligence, and blockchain in auditing. How have these techniques helped improve the effectiveness and efficiency of audits?
The Moral and Fiscal Costs of Tax Evasion
Directions: Write a 1,000- to 1,350-word essay based on the topic The Moral and Fiscal Costs of Tax Evasion
Include the following in your essay:
• Identify an underlying ethical issue.
• Critique the ethical situation.
• Determine who could be harmed by the ethical situation.
• Assess the potential outcomes of the ethical situation from an accounting perspective.
• Evaluate how these decisions could be avoided or prevented.
Problems in the procurement department of Bucket Corp.
Case 5
There once was a corporation from Nantucket, Its controls leaked like holes in a bucket. Smelling trouble with the buyer,
And with the supplier,
They determined to fix it or chuck it.
This limerick accurately depicts Bucket Corp., which manufactures wood furniture. Bucket has enjoyed several years of good profits but has recently seen some alarming trends in its bottom line. Although not drastic, Bucket’s profits first stagnated and are now beginning to decline. After some cost analysis and investigation of financial records, the company has determined that the problem may be coming from the procurement division of operations. On the following page is a small random sample of invoices from various vendors:
1. What could the CFO do to investigate the potential problems in the procurement department of Bucket Corp.?
2. Doyouthinkitispossiblethereisfraudinvolved?Why?
Areas of the business most at risk for fraud
Case 1
Cal Smith Jr. is the night manager at a local doughnut shop that is doing very well. The shop sells doughnuts 7 days a week, 24 hours a day. Cal runs the graveyard shift by himself since none of the other employees want to work at night. Since opening six months ago, Cal has not been able to find anyone to work for him and therefore has never missed one day of work. Cal makes his bank deposits every morning before going home.
Cal feels that he is overworked and underpaid. The franchise owner, Kenny Jones, has praised Cal for his hard work and dedication to the company. Kenny’s only concern is that, once or twice a week, an entire batch of traditional glazed doughnuts has been thrown away because of overbaking. Despite these problems, Cal maintains a clean work environment and is consid- ered a valuable employee.
Recently, Cal has yelled at people on shifts before and after him for seemingly insignificant reasons. He was hired as manager because he gets along with everyone and is usually easygoing. His recent irritability could stem from the fact that business is slowing down, and he does not have much interac- tion with anyone at night. He also has been com- plaining that he has not been getting very much sleep. One day, Cal came to work in a new BMW, the car of his dreams. Cal said that his dad helped him buy the car.
1. What areas of the business are most at risk for fraud?
2. Identify any symptoms of fraud that appear to exist at the doughnut shop.
3. What steps could be taken to reduce opportunities for fraud?
Psychopaths feel
Psychopaths feel no guilt because they have no conscience
Conversion
What is conversion?
AICPA ethical violation
So, we’ve worked up the following scenario-driven exercise to see if you can deduce what does and does not constitute an AICPA ethical violation and to explain “why?”.
Step 1: Review the AICPA code of professional conduct Links to an external site..
You don’t need to read the code from cover to cover but do make a pass through the document to see what it entails.
You’ll also want to reference our earlier video on AICPA ethicsLinks to an external site..
Step 2: Review each of the ethical scenarios below:
Toggle the accordion to reveal the scenario details.
Jessica Alma
Jessica Alma has been serving as the senior auditor on the audit of Carolina BioHealth, Inc. Because of her outstanding work, the head of internal audit at Carolina BioHealth extended her an offer of employment to join the internal audit department as an audit manager. When the discussions with Carolina BioHealth began, Jessica informed her office’s managing partner and was removed from the audit engagement.
Miller and Yancy CPAs
The audit firm of Miller and Yancy, CPAs, has joined an association of other CPA firms across the country to enhance the types of professional services the firm can provide. Miller and Yancy share resources with other firms in the association, including audit methodologies, audit manuals, and common IT systems for billing and time reporting. One of the partners in Miller and Yancy has a direct financial interest in the audit client of another firm in the association.
Spencer Dunn
Spencer Dunn is the partner in charge of the audit of Brentwood Bank. Dunn is in the process of purchasing a mountain house and has obtained mortgage financing from Brentwood Bank.
Melanie Greer
Melanie Greer’s audit client has a material investment in Summit, Inc. Greer’s nondependent parents also own shares in Summit, and Summit is not an attest client of Greer’s firm. The amount of her parent’s ownership in Summit is insignificant to Greer’s net worth.
Joe Pugh
Joe Pugh is a former partner in Pinnacle and Hughes, CPAs. Recently, he left the firm to become the chief operating officer of Ensworth Clothing, Inc., an audit client of Pinnacle and Hughes. In his new role, Pugh has no responsibilities for financial reporting. Pinnacle and Hughes made significant changes to the audit plan for the upcoming audit.
Odonnel Inc.
Odonnel Incorporated has struggled financially and has been unable to pay the audit fee to its auditor, Seale and Seale, CPAs, for the 2022 and 2021 audits. Seale and Seale are currently planning the 2023 audit.
Morris and Williams
Morris and Williams, a regional CPA firm, is providing information systems consulting to one of their publicly traded audit clients. They are assisting in implementing a new financial reporting system selected by management.
Chris Lancaster
Chris Lancaster is a financial analyst in the financial reporting department of Cockerham International, a privately held corporation. Chris was asked to prepare several journal entries for Cockerham International related to transactions that have yet to occur. The entries are reflected in financial statements that the company recently provided to the bank in connection with an outstanding loan.
Step 3: Select FOUR scenarios and address the following questions:
Does this scenario represent a violation of the AICPA code of professional conduct?
If “no,” explain clearly why not.
If “yes,” explain the following:
The nature of the violation
The specific rule (part of the code) which is being violated
The rationale for the relevant rule
Step 4: Post your ethical analysis for your four scenarios in a discussion post.
Copy and paste the scenario description and the answers to the step 3 questions.
Make a single post that includes all your scenarios (rather than four separate posts).
Trial Balance
The mechanics of accounting involve analyzing the effect on the accounting equation of financial transactions. Knowing how transactions affect the accounting equation allows you to consider and account for all the ramifications of sometimes complicated transactions.
You are mentoring an accounting intern who asks for clarification about trial balances. She wants to know if a trial balance balances, would that guarantee that the trial balance is correct?
Consider her question. What possible errors could happen and still allow the trial balance to balance?