The Past Five Years Auditing - 1199 Words

Independence Over the past five years auditing VHL I have developed close friendships with some board members who are responsible for maintaining internal controls and financial operations in the organization. As a CGA I am bound by CEPROC, which states that I must remain independent in appearance and fact in order to provide an unbiased objective opinion. I feel these relationships, and the length of time I have audited VHL, could lead to a familiarity threat that would inhibit my ability to apply professional skepticism and jeopardize the audit. Due to the level of influence the board has over the organization and the finances it is unlikely that acceptable safeguards could be applied, therefore I must decline to continue any further with this audit, and request someone else assume my role. Segregation of Duties In a not-for-profit organization, such as VHL, with limited financial resources there is a higher risk that segregation of duties will be compromised as employees often hold multiple roles and responsibilities, as is the case with the accounting functions at VHL. With only one accountant responsible for deposits, custody, disbursement of funds, maintaining financial records and preparing financial reports it raises the risk for potential material misstatement due to error or fraud. This could erode the trust and confidence the stakeholders have in VHL and their stewardship of contributed resources, possibly impacting future donations. This must be taken intoShow MoreRelatedCase1.1 Enron Corp843 Words   |  4 Pagesparties are most responsible for the â€Å"crisis of confidence† on the part of the public in the accounting profession as following. †¢ The parties who create these auditing standard rules, such as SEC, Auditing Standard Board. 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The auditors should have performed a review for related-party transactions at year-end that may have uncovered some of the transactions. Inadequate disclosure of related-party transactions is one of the most serious of financial statement frauds. It is also one of the most difficult to detect. Phar-Mor easily skirted the annualRead More Sarbanes Oxley Act of 2004 Essay1713 Words   |  7 Pagessections. Title I is Public Company Accounting Oversight Board. It created a five member panel known as the Public Company Accounting Oversight Board, overseen and appointed by the Securities and Exchange Commission (Sarbanes-Oxley). The Board is to consist of two CPAs and three people that are not CPAs, but the chairman must be a CPA. The Board is to provide oversight of auditing of public companies while establishing auditing, quality control, independence, ethical standards (Arens 32-33). 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The PCAOB has continued its emphasis on detecting fraud in its revised internal control standard, Auditing Standard No. 5. As their fundamental responsibility, financial statement auditors must determine whether economic transaction activity has been accounted for by the auditRead MoreThe Sarbanes Oxley Act ( Sox ) Essay1233 Words   |  5 PagesAccording to Pompper (2014), â€Å"incidents of hig h-profile deception over the past† four decades â€Å"have threatened the reputation of the †¦ accounting function† (p. 131). For instance, an investigation was conducted into the financial audit and reporting process after the savings and loan banking crisis in the 1980s (Pompper, 2014). In addition, the criminal convictions of executives and bankruptcies of Fortune 500 companies such as Enron and WorldCom in the turn of the century motivated Congress to