In the paper “Fraud, Errors and Illegal Acts,” the author discusses the basic responsibility of an auditor, which is to detect fraud, errors and illegal acts that take place in an organization and report it to the competent committee for an audit to take appropriate measures to prevent fraud…
Internal control, proper reporting mechanism and the implementation of sound accounting policies and procedures shall rest with the management due to which, role of management has increased. A forensic accountant must have an in-depth study of the documents presented and should have the command to use computer software and so on. Forensic auditors must have excellent written and oral communication skill. Auditors must be aware of IT application and business processes to have a grip on IT related frauds. To nab the tax dodgers, Internal Revenue Service has number of trained people who gather information from different sources / channels to be used to detect tax frauds. IRS has the power to confiscate property of the tax defaulter / tax dodger in order to pressurize them to clear their tax liabilities. FRAUD, ERRORS AND ILLEGAL ACTS The Auditors’ Responsibilities to Detect Fraud, Errors and Illegal Acts The basic responsibility of an auditor is to detect fraud, errors and illegal acts that takes place in an organization and report it to the competent committee for audit to take appropriate measures to prevent fraud, errors and illegal acts (Alleyne & Howard 2005). ...
controls, absence of controls, ineffective controls and overriding of controls by the management that culminates fraudulent expenses and skimmed of assets; to pinpoint the individual(s) that are involved in fraudulent transaction, their attitude and past history; identify the loopholes attracting fraud(s) and to suggest management / competent committee of the Board to plug in the identified loopholes (AICPA 2002). After the debacle of Enron and World Com, the American legislatures drafted and promulgated an act named as “Sarbanes Oxley Act-2002” just to restore the investor’s confidence. The act sets the new pattern of accountability and imposition of penalties for the wrongdoers (Alleyne & Howard 2005). According to laid down criteria, auditors have to take into account the mentioned criterion while auditing an enterprise. Auditors who have conducted audit of an organization shall keep audit reviews for a period of five years. Auditors are to certify the effectiveness of internal controls of an entity wherein they conducted audit. They have to advise the management to form a team of experts from finance, audit, information technology, operation, risk management and legal to evolve comprehensive procedure for an effective control on financial transactions (Alleyne & Howard 2005). The team of experts should directly be reporting to the CEO/CFO of the company for necessary guidance and instructions in light of the audit reports. Management should bear the cost of compliance to improve / revamp existing system for an effective internal control. Auditors should not encroach upon the discretions of management for implementation of comprehensive procedure concerning effective internal controls or overcome the internal control deficiencies. ...
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The report will cover the following: the role played by the setting of objectives in auditing; the roles of auditors towards realization of misstatement-free financial statements; the roles of auditors whenever fraud cases are detected; the roles of auditors in handling executive issues of the client company; the roles of auditors in the management of the auditing process.
According to the research findings some of mortgages schemes that thrive in the economy include property flipping, equity conversion, identity theft, occupancy theft and second residence. As the rates of foreclosure and delinquency keep on soaring, the real estate market will remain sluggish while the mortgage fraud cases will keep increasing.
Accounting Fraud: Enron Accounting Scandal Accounting scandals can be easily prevented. The research focuses on the study of the Enron accounting scandal. The research delved into Enron’s window-dressing of its financial statements to present a more favorable balance sheet and income statement.
Illegal acts recognized in financial statements under the audit are attributable to persons acting on behalf of the entity. The points described under the section “definition of illegal acts” make the clients aware of situations that may hold them liable.
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(Horwitz, et. al). This phone call was the beginning of a case that captivated the entire nation, with virtually wall-to-wall coverage on the 24 hour news stations and a popular California representative, Gary
The author asserts that there are various explanations that are based on features of financial strains in nearly every fraudulent doings. These explanations may come from misfortune, imprudence or combine imprudence and misfortune. Financial strains may be termed as items that are subjective.
Medication errors risk harming patients and their families. According to the US Food and Drug Administration, FDA (2013), medication error refers to a preventable event that causes inappropriate medication use or harms patients while the medication is in the charge of the consumer, patient or healthcare professional.
Three components help in evaluating the financial statement, including the inherent risk, control risk, and detection risk. The inherent risk looks at environmental factors such as the company’s background and considers if this would result in a material error. The control risk looks at the ability of the internal controls to detect and prevent material error.
6 Pages(1500 words)Case Study
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