The use of Third-Party Intermediary minimizes the risk of inaccurate confirmations. Confirmation.com is an effective website that avoids human errors due to manual reconciliation of balances. From Tenth National Bank, a confirmation response was received by e-mail from Lou Jennings, the authorized signer, stating the bank sent the confirmation directly to the clients’ office. Mr. Jennings also included auditor credentials for Tenth National Bank’s online banking. Failure to not receive the confirmation directly from the respondent violates PCAOB Auditing Standards Paragraph 22 which the violation directs us to PCAOB Auditing Standards Paragraph 33 which obliges us to obtain further evidence to support an opinion. As we examined the response
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The second bullet from the AAER is significant. It states "While Koss’s internal controls policy required Michael J. Koss to approve invoices of $5,000 or more for payment, its controls did not prevent Sachdeva and Mulvaney from processing large wire transfers and cashier’s checks outside of the accounts payable system to pay for Sachdeva’s personal purchases without seeking or obtaining Michael J. Koss’s approval."
Memory is a cognitive function of the brain that is often taken for granted. Memory may have many purposes, but most importantly it is essentially a record of an entire life span. From this perspective memory is the most important aspect of consciousness. Unfortunately, through formal experimentation it has been shown that memory is fairly inaccurate, inconsistent, and often influenced by our own experiences as well as the bias of others. Memory is not only affected during an observed event, but there are instances where memory can be influenced after an event as well. There are also instances where memory can be affected retroactively due to personal experiences and biases. Incorrectly recalling the memories of one’s life is usually not detrimental, but the flawed nature of long-term and short-term memory functions becomes a serious matter in regards to criminal eyewitness testimony. In the justice system eyewitness reports are legitimate and can be crucial in the judging process. The justice system was constructed to rely on testimony that is often inaccurate and inconstant in many ways.
In August of 2017, Wells Fargo disclosed that its fake accounts scandal affected up to 3.5 million customers in total, far more than the previous accounts that were also opened without customer’s knowledge. If it weren’t for the third party review, this scandal would not have come in anyone’s attention. Moreover, the bank has admitted that it erroneously charged over 800,000 customers for car loan insurance that they no longer needed. To stop the matter from getting worse, the bank insisted on firing 5,300 employees to show that the bank does care and will do everything in its power to sort the situation.
Electronic confirmations are often used to verify bank balances, but they can also assist in the verification of a company’s vendors. Therefore, I am going to request confirmations from Wayland Manufacturing Company’s vendors after the client accepts my request. The electronic confirmations will prove each vendor’s existence as well as the accuracy of the accounts payable subsidiary ledger balances. Evidence collected from third-party sources must remain confidential and I maintain my integrity by only seeking evidence I am authorized to review. If I decide to request Cash electronic confirmations without consent, I am violating integrity, confidentiality, and professional due care (AU Section 330-The Confirmation Process 1998) (Arens, Elder, & Borsum 2013) (AICPA Code of Professional Conduct
Due to this, the confirmation process has become of high risk. Third party intermediaries have been established to assist in this process by securely transmitting information to the bank and validating the authenticity of the respondent. The use of third-party intermediaries makes it more difficult for anyone to alter confirmation requests. There are risks that come with the use of third party intermediaries because the intermediary’s control weaknesses or deficiencies fall on the auditors as well when relying on confirmations received through them. Auditors must assess that the intermediary’s system of internal control has been designed and is operating effectively to meet the PCAOB
One year ago, on September 8, 2016 the Consumer Financial Protection Bureau(CFPB), the Los Angeles City Attorney and the Office of the Comptroller of the Currency (OCC) fined Wells Fargo Bank $185 million, alleging that more than 2 million bank accounts or credit cards were opened or applied for without customers' knowledge or permission between May 2011 and July 2015. This essay will discuss the Wells Fargo scandal by explaining how the event happened and describing how the organization approached handling a response to the crisis. This will be seen, firstly by describing the how the scandal happened, and what were the causes, secondly by discussing the reaction of the company in front of the situation, how they dealt with the crisis and then
During the Simply Soups, Inc. audit, we were responsible for confirming the balances for each of the company’s bank accounts. The purpose of sending confirmations is to obtain a reasonable expectation that the balances presented on the books reflect the actual values recorded by the banks, addressing any issues of existence. In addition to providing validation from a reliable source, confirmations also allow us to reconcile any issues concerning money in transit.
Accuracy: All Purchases are authorized at the appropriate level. All invoices prices and quantities are compared with purchase orders and receiving reports. Journal entries are review at the appropriate level. All the Financial statements are review and approved by the senior level.
Legal responsibilities at Wells Fargo include a wide variety of issues. They can be from protecting customer’s rights to securing company policy. Customers trust Wells Fargo with private and privileged information. Therefore, the bank must main...
For example in Japan, when the clients send the credits proposal, one of crew in the commercial bank will come to the client’s home as the guess and not showing the real identity or they might used different legal identity, in order to search the information of the client and looking for the truth of the data that have been send to the bank as the credits proposal. If all of the data is true, the banks will considered whether the proposal accepted or rejected, and if the data is not true, automaticaly the credit proposal will rejected by the banks. (Japan, 2016)
Before the arrival of online payment methods, the next best solution that people had was sending checks or money orders through postal mail. As (Crede) observes, these methods of payment were (and still are) time consuming and expensive for both parties involved in the transaction. A case in point is the time-consuming nature of drafting, and mailing a check or money order by the payer. The payee on the other hand has to collect the check or money order from the mail, cash it, enter the payment details into the information system, process data, and file the transaction details (Crede). Unlike payments by postal mail, online payments are fast and less costly. Better still; the benefits resulting from such a payment system are shared between the payer and the payee since the immediate transfer of online funds to the payees account means that the money can be accessed almost immediately. This not only ...
This system helps all of these banks provide financial secrecy which is that only you and your banker would legally be allowed to know the financial activity within your account. The financial secrecy, completely different from financial privacy, includes many regulations to maintain this asset of secrecy. For example, many banks would n...
To recap, the purpose of bank reconciliation is to balance the cash in bank balance per the statement given by the bank (called bank statement) against the cash in bank balance per MYOB Premier as of the end of the month. Most often than not, bank reconciliation is also an internal control measure to identify intentional or unintentional unrecorded disbursement transactions, unrecorded deposit transactions, and can be a helpful tool in proper evaluation of internal control put in place to safeguard cash and cash in bank transactions. In order to reconcile the cash in bank balance per bank records (per bank) and book records (per MYOB Premier), items that are not recorded in MYOB but deducted or added in the bank balance as shown by the bank statement should be identified with complete details of the transactions and to make proper adjusting entries after this procedure.
Lipis, A.H., Marschall, T.R., & Linker, J.H. (1985). Electronic Banking. Electronic Banking, Inc. Atlanta, Georgia. John Wiley & Sons Inc.