StudentShare solutions
Triangle menu

Toy Central - Assessing the Possibility of Fraud and illegal Acts - Case Study Example

Free

Extract of sample
Toy Central - Assessing the Possibility of Fraud and illegal Acts

The AU Section 317 clearly states that illegal acts may have direct or indirect impact on financial statements. Some illegal acts cause direct and material effect on the determination of financial amounts. In contrast, certain illegal acts raise material but indirect threats to the accuracy of financial statements. The next part of this section discusses with the “auditor’s consideration of the possibility of illegal acts”. This section specifically requires how auditors must respond to illegal acts that may have a direct or indirect impact on financial statements. In order to comply with AU Section 317, clients must have specific provisions related to the prevention of illegal acts. Such a provision is very essential for auditors to deal with illegal acts in the absence of specific evidence. This section also indicates that auditors must get all possible assistance from client staff in order to perform a good audit work. The AU Section 317 precisely insists that auditors should be provided with adequate information regarding the scope of the work. This section’s requirements particularly deal with due diligence that an auditor has to give while performing an audit work. 2. The identified payment to the International Workers Transport Union cannot be considered as an illegal act. The TCC’s VP-Operations requisitioned the payment. ...
Hence, VP claimed that the payment would influence the union executives to discuss and resolve that issue with their members before things get rid of hand.

Related Essays

Toy Central Corporation
As Deloitte, Touche, Ernst and Young (2004) point out, an effective internal control over financial reporting is the key element to improve management of records and enhanced preparation of consistent financial reports. This comprehensive process requires the involvement of people at all levels of the company.
3 pages (750 words) Case Study
Case Study: And the Fraud Continues
Accounting fraud is not easily detected when it is committed by persons at the helm of affairs. This paper will critically analyze the case “And the fraud continues” prepared by Thomas L. Lyon and Anthony L. Tocco. Internal Control Weaknesses in MCI While evaluating the case study, it is clear that MCI’s internal control weaknesses contributed to the commission of this fraud.
4 pages (1000 words) Case Study
Forensic Accountants as Fraud Buggers
This paper gives a description of the legal responsibilities of forensic accountants within business organizations or companies. More importantly, the paper illustrates forensic accounting by the use of two forensic accounting cases in which forensic accountants were involved in demonstrating accounting problems within companies.
6 pages (1500 words) Case Study
Hexin Toy Co. Ltd
Being the leading toy and games maker has allowed Hexin to introduce a diverse selection of toys and games. However, in recent years Hexin has been reluctant to adapt to current market trends. The company was focusing on producing new versions of existing products to make them more convenient.
9 pages (2500 words) Case Study
Assessing Brilliance in Innovation
It was so brilliant, in fact, that even the most adept economists could not foresee the paralyzing future of this company, and Fortune Magazine awarded Enron as "Most Innovative Company in America" from 1995 to 2000. As of March 2000, Enron was the sixth largest energy company world-wide, according to the Energy Financial Group.
10 pages (2500 words) Case Study
Toy Industry
The first major advantage TRU that helped them to enter the market was growing resistance to the "big stores laws" existing in Japan during the mid to late 1980s. It was stated in the case that there were lobbying efforts by Japanese businesses because the laws barred competition and benefited the large established stores that were created before the laws existed.
8 pages (2000 words) Case Study
Toy Central
This comprehensive process requires the involvement of people at all levels of the company. People with variety of roles, such as those who formulate and
3 pages (750 words) Case Study
Forensic Accountants: Fraud Busters
The paper also elaborates on the roles that a forensic accountant is mandated to play in courtroom proceedings involving accounting cases such as fraud and embezzlement of resources. Furthermore, this paper gives a description of the legal
6 pages (1500 words) Case Study
Manfold Toy Company: Ethics. Case Study Analysis
When the company was functioning with full fledged capacity, Fred Wong, the independent non executive director warned Joseph about the impending danger of bankruptcy of On Yee. Despite being warned Joseph decided not to give
3 pages (750 words) Case Study
Assessing organizational culture
It is apparent from Koontz’ definition, communication within the organization involves the transmission of meanings and ideas between two or more parties.
4 pages (1000 words) Case Study
In addition, the payment was approved by the CFO. Moreover, the case study reveals that the payment to International Workers Transport Union was approved and appropriately classified as an “other non-operating expense”. The AU Section 317 also certifies the genuineness of the transaction. Under the “definition of illegal acts” part of AU Section 317, the paragraph 6 states that entities may be affected by additional laws or regulations which “more relate to an entity’s operating aspects than to its financial and accounting aspects” (PCAOB). As a result, the identified transaction has not breached any regulation or corporate governance policies. The case study also reflects that the TCC is not directly affected by Sarbanes Oxley Act as it is a private firm. Hence, the auditor does not necessarily need to assess the firm’s internal control system very thoroughly. Moreover, the management’s major intention behind this payment was to promote organization’s long term objectives. In other words, the management might not have intended to falsify its books of accounts by this transaction. In total, it is precise that TCC’s management had met every legal requirement before issuing this payment. 3. In the opinion of experts, “A valuation allowance reducing the deferred tax asset is required if an analysis of the sources of future taxable income suggests that it is more likely than not that some portion or all of the deferred tax asset will not be realized” (White, Sondhi & Fried, 2006, p.299). In general cases, if a company expects that it has only

Summary

Toy Central - Assessing the Possibility of Fraud Toy Central - Assessing the Possibility of Fraud 1. The Public Company Accounting Oversight Board has clearly defined ‘illegal acts by clients’ under AU Section 317. As in general case, AU Section 317 describes illegal acts as violations of laws or governmental regulations…
Author : kale83
Toy Central - Assessing the Possibility of Fraud and illegal Acts essay example
Read Text Preview
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation