Acc 564 Assignment 3  Fraud in the Accounting Information System

Acc 564 Assignment 3  Fraud in the Accounting Information System

Acc 564 Assignment 3  Fraud in the Accounting Information System In September 2008, one of the largest corporate scandals unfolded in the United States. Lehman Brothers, a global financial services firm was declared bankrupt. This was unanticipated considering the company’s financial statements indicated it was financially sound. What was not known, however, is that over $ 50 billion in loans had been carefully concealed as sales (Kimberly, 2011). In the ensuing scandal, Lehman allegedly conspired to disguise its true financial position by disposing off its toxic assets in the short term. The toxic assets costing the company $ 50 billion were sold off to Cayman Island banks on the condition that the company would buy them back. This created a false impression that Lehman had disposed off the toxic assets worth $ 50 billion, and hence the sales figure of the same amount reflected in its financial statements. The scandal was perpetrated by Lehman executives with the help Ernst & Young,...
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OMM640 Business ethics and social responsibility

OMM640 Business ethics and social responsibility

OMM640 Business ethics and social responsibility Ethics, Compliance, Auditing, and Emerging Issues Describe an emerging global risk for 2015 and beyond Technology risk is insofar the greatest challenge facing majority of businesses across the world, yet many remain oblivious to the risks they are exposed to. Technology risk includes cyber attacks, data fraud/theft, critical information infrastructure breakdown and misuse of technologies. Technology risk has the greatest financial impact on a company, in addition to time consumption and loss of trust from customers. The impact and likelihood of a cyber attack in the modern business environment is estimated at above average, and the threats are becoming more each day. This is compounded by the fact that businesses have become more hyper-connected, and sensitive personal and consumer data is currently being stored in cloud where hackers can gain access from any part of the world. Currently, more businesses continue to lean on technology as an integral part of their daily operations. This is due to the...
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Acc 564  Hacking the AIS

Acc 564 Hacking the AIS

Acc 564 Hacking the AIS Assignment As more businesses lean on technology to support their operations, unexpected challenges are emerging in the technological environment. Hackers, whose identities in most incidences remain anonymous, have become a major threat in the operations of most businesses. On November 2013, a cyber-attack on Target Company threatened to throw the company in a financial crisis, coupled with lack of confidence from majority of its customers. The cyber-attack on Target Company resulted in over 40 million customer accounts becoming compromised (Ziobro, 2014). Hackers were able to gain sensitive information of cardholders following the attack. This attack was discovered three months later, and resulted in loss of customers’ money. Target Company bears a huge responsibility in terms of effectiveness of its response to the security breach. Reports indicate that Target’s security team had earlier learnt of a breach in their system but downplayed the security warnings (Ziobro, 2014). The lack of follow-up gave hackers the upper hand where they...
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Information Needs for the AIS -Acc 564

Information Needs for the AIS -Acc 564

Information Needs for the AIS Accounting information system (AIS) is a computerized method of collecting, processing, storing, retrieving and distribution of accounting data to users in an organization. An information system makes it possible to collect and manipulate financial and accounting data in ways that it is usable to end users. The functions of an accounting information system can be put into three major categories: First, AIS ensures collection and proper storage of an organization’s financial data. Secondly, the system ensures that information is available to end users for decision making. Information may be supplied inform of financial statements or reports. Lastly, AIS ensures that controls are in place for proper processing and retrieval of information. In many organizations, problems with the accounting information systems are encountered although seldom in established organizations. Corporate leaders are tasked with the responsibility of making critical decisions from the information they receive from AIS. Corporate leaders often make improper assumptions when handling accounting information systems and...
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Comprehensive Audit Plan : ACC 574 Assignment 5

Comprehensive Audit Plan : ACC 574 Assignment 5

Comprehensive Audit Plan :  ACC 574 Assignment 5 Make recommendations on the requirements for the feasibility study and discuss the Pros and cons for the design of SDLC with a recommendation for an optimal time frame for each stage. A feasibility study is a basic audit procedure that helps the organization in compliance and preparation of a final audit. A feasibility study answers the basic question; can it be accomplished given the current resources? The feasibility study enables the management to determine all the resources necessary for the accomplishment of the tasks and the viability of the project (Kendall, & Julia, 2005). The following are the basic requirements for a feasibility study. Analysis of the existing information system For an organization to develop a new and advanced system, the existing system must be analyzed in detail in order to identify its weaknesses in detecting and averting fraud. The crucial thing in this step is for the team to comprehensively review the interactions of...
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Assignment: 4 Emerging Auditing Issues

Assignment: 4 Emerging Auditing Issues

Assignment: 4 Emerging Auditing Issues The Public Company Accounting Oversight Board The role of PCAOB in improving reliability of audited financial statements The Public Company Accounting Oversight Board (PCAOB) is a non-profit private corporation formed under the Sarbanes-Oxley Act (SOX-2002) to conduct supervisory roles to all accountants or auditors involved in producing audit reports for public companies (Palmiter, 2008). The board’s core mandate is to ensure that the independent auditors observe due procedures while auditing public companies. In addition to this, the body registers, conducts investigations and issues disciplinary measures to public accounting firms found guilty of auditing malpractices (Palmiter, 2008). The board also ensures that public accounting firms observe the SOX Act to the latter. The establishment of PCAOB has greatly enhanced reliability of audited financial statements for the public users of information. The following section provides a detailed analysis of the important role played by PCAOB. PCAOB routinely conducts inspections upon public accounting firms to ensure that they adhere to all the...
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PwC Audit Scandal and Fraud ACC 574 Week 6 Assignment 3 

PwC Audit Scandal and Fraud ACC 574 Week 6 Assignment 3 

PwC Audit Scandal and Fraud ACC 574 Week 6 Assignment 3 Question 1 The Sarbanes-Oxley Act (SOX) of 2002 has gone to great lengths in enhancing accountability and integrity of financial information presented by public companies. The act lays down specific guidelines to be followed by public companies during preparation of financial reports. It also guides public accounting firms on specific areas they should investigate such procedures in place, internal controls, conformance to policies and other areas when conducting audit checks. The following explains in details how the SOX Act has managed to reduce corporate fraudulent activity and enhance credibility to the public who rely on the financial reports. Introduction of new and better auditing practices The SOX Act brought with it new practices in the auditing and accounting fields. The act lays down specific guidelines to be followed during auditing. One of the notable changes introduced by the act is the relationship between the public company’s management and the outside auditors. Prior to...
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Audit Model and sampling

Audit Model and sampling

Student Name Instructor Course Date   Audit Model and sampling Table Issue case Financial Assertions Risk 1 Existence/ Valuation Under/ Overstated stock 2  Accuracy Misstatement 3 Rights/ Obligations Legal matters 4 Completeness/ cat off Understated/overstated (valuation problem) 5 Accuracy   Under the stock take inventory, auditor is entitled to take the stock count because the company management does have the tendency of overstating or understating the stocks of the company in order to lure the investors into their companies.  Therefore the auditor has to take the physical account of the stock. The subsequent payment test is used to measure the accuracy of the account payable if there is a misstatement in that given account.  The accuracy of the account payable is what the auditor is concerned to know in this given issue. As an auditor, the supporting document is what the auditor relies on for audit purpose. If the legal contract has no documents to support it then auditor will have no duty to audit such documents.  The details which are missing is a prove that sales invoice could be understated o overstated, the missing documents...
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