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Accounting standards in the business world
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Accounting standards in the business world
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LJB Company Audit Edna Raynor 4/6/14 Dear President of LJB Company, We have completed our assessment of LJB Company’s internal controls and will discuss our findings and recommendations within this report. Our firm has also researched the current regulations regarding publicly traded firms to help ensure that your company makes a smooth transition into the public market if you decide to pursue this option. Publicly traded corporations are required to implement and follow the guidelines for internal controls and procedures for financial reporting, set forth by the Sarbanes-Oxley Act (SOX) of 2002. This means that upper management and executives at LJB are responsible for ensuring that the controls are effective and reliable, furthermore the company must periodically use outside auditors that will be able to confirm the accuracy of the internal controls. There are few internal controls that should be implemented to comply with the above regulation: Quarterly reports should be submitted regularly to ensure the effectiveness and reliability of the internal control...
A company that announces deficiencies in its internal control will more than likely have a fall in their stock prices. Investors will not trust that company’s financial information. The investors know that the company will be hit with fines for not complying with the regulations. No honest investor wants to be involved with a company that defies the government.
JB Hi-Fi’s current corporate governance practices will be explored using the ASX Corporate Governance eight principles and recommendations. These eight principles will be further analysed and supported using legislation, theories, concepts, company examples and case studies. By analysing JB Hi-Fi through all of the means discussed, this report will demonstrate areas of success and development. Furthermore, recommendations will be made to improve current corporate governance practices in order for JB Hi-Fi to further demonstrate leading ways in corporate governance practices.
It has been a decade since the Sarbanes-Oxley Act became in effect. Obviously, the SOX Act which aimed at increasing the confidence in the US capital market really has had a profound influence on public companies and public accounting firms. However, after Enron scandal which triggered the issue of SOX Act, public company lawsuits due to fraud still emerged one after another. As such, the efficacy of the 11-year-old Act has continually been questioned by professionals and public. In addition, the controversy about the cost and benefit of Sarbanes-Oxley Act has never stopped.
“Fifth, the company should audit the whole process frequently to ensure compli- ance with these procedures.”
Reducing the risk of misstatements in your financial statements caused by fraud or error is the key to gaining the trust of your donors. Azadzoi Auditing Company is pleased to propose auditing services to your non-profit organization to help you become a trustworthy organization for your donors.
According to PCAOB Auditing Standard 5 paragraph 2, “effective internal control over financial reporting provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes. If one or more material weaknesses exist, the company 's internal control over financial reporting cannot be considered
Chief Fortier’s execution of management created disharmony within the department from the onset of his administration. Understanding that the department was loosely managed with “a hands-off approach, preferring to leave matters to the officers and detectives themselves with an appeal to their sense of professional integrity” (Cordner, 2014), the forced implementation of recommendations identified in the Ralph Anderson Audit while initiating change for the better of the department, created an us v. you mentality, where adherence to the changes were made at the onset to gain position only to block and stonewall any further changes.
The report on internal controls, according to ExxonMobil’s CEO, Treasurer and Controller, states they are solely “responsible for establishing and maintaining adequate internal control over (ExxonMobil’s) financial reporting.” They evaluated the effectiveness of internal controls over financial reporting based on COSO’s framework and concluded that controls were effective (MD&A, F-22). The report in internal controls acknowledged us—ExxonMobil’s independent public accounting firm PricewaterhouseCoopers LLP (PwC)—stating that the Corporation maintained effective internal control over financial reporting for 2009 and 2010 as it is the responsibility of management to maintain and assess its effectiveness. We, PwC, are responsible only to express an opinion on internal controls, which we opined in 2009 as unqualified (MD&A, F-22).
This formal complaint involves a challenge to the Promotion Board program used by GardaWorld Federal Services/Aegis in Kabul, Afghanistan. The selection of Complex Supervisor, Guard Site Supervisor, and Guard Force Commander for promotion. Furthermore, by going into detail, the challenged procedures involved what is known as unethical practices/biases and procedural failures dating back to December 2014 – April 2018. According to the instructions given by GardaWorld Federal Services Standard Operating Policies and Procedures CAS Promotion Policy SOP 104 December 2014 - January 2017.
In summary, we recorded similar expenditure and investment tax credit amounts as compared to the prior fiscal year.
According to the article authored by Mark Rupert, what are the seven best practices in the roles and responsibilities of an internal audit function?
The oversight responsibilities of the board, the CAE lacking of expertise or broad understanding of financial controls and responsibilities, and the understaffed internal audit functions lacking of independence and direct access to the board of directors contributed to the absence of internal controls. To begin with, the board should be retrained to achieve financial literacy to review financial reporting. Other than attending formal meetings, the board of directors should be more involved with the management. For the Audit Committee, the two members who were recruited as acquaintances to Brennahan need be replaced with experts who are more sufficiently knowledgeable about accounting rules beyond merely “financially literate”. Furthermore, the internal audit functions need to expand with different expertise commensurate with the expanded activities of the organization, testing financial reporting rather than internal controls from an operational perspective. The CAE should be more independent and proactive to execute audit plans, instead of following orders from the CFO, and initiate a direct and efficient communication between internal audit and audit
Overall, the company is having ineffective controls regarding different departments and in the whole organization. An effective internal audit department should be established within the organization which should test the effectiveness of these controls on regular basis and make it sure that all controls are working effectively and efficiently with the different departments of the organization. Also the Internal auditor should implement the most effective processes and measures to prevent and detect the fraud, corruption and non compliance with the laws and regulations in the organization. Establishment of internal audit committee would be helpful in this regard which comprises of executive and non executive directors.
The major characters of the tradition audit are all information what is needed by auditors are on the paper and the manual calculators and without high communication technology. Auditors usually were limited by the place in the paper time. When a several people are working on the same auditing project for a client with offices in cities across the country, even worldwide, it takes a lots all time those auditors get the information which they need from the client, even there is risk paper information disappear for many reasons. on the another hand, mail paper information increase the auditing cost. The mistake caused by the manual calculators inevitably, no matter how fixed auditors concentrate on recalculate is, after all auditors are human. The global business become major in the modern business world, some example, several auditors who are in different locations are working a same auditing project, or auditors are in different city even country with the client, when there is issue among these auditors or between auditors and client, they only can communicate with each other by phone or be together and have meeting. Phone call can not make sure information been watched in the same time when the voice is talking about the issue, but having a meeting takes time and money make all people together, it increases auditing cost.
The success of a company is very dependent upon its financial accounting. In accounting there are numerous Regulatory bodies that govern the accounting world. These companies are extremely important to a company because they set the standards when it comes to the language and decision making of a company. These regulatory bodies can be structured as agencies, associations, commissions, and boards. Without companies like the Security and Exchange Commission (SEC), The Financial Accounting Standards Board (FASB), the Governmental Accounting Standards Board (GASB), Internal Accounting Standards Board (IASB), Internal Revenue Service (IRS), and other regulatory bodies a company could not make well informed decisions. In this paper the author will look at only four of them.