The first issue is about how Harold Potter gained employment and shares with Dumbledore Enterprise, a public company. Being supported by his uncle to gain entry to the company is not a serious issue. However, once he gained membership to the AICPA, there were implications that made his continuous involvement in Dumbledore risky. Section 101.01 states that a person should be independent in performance of professional services (Independence, 2011 para 1). This therefore means that once he was connected to Dumbledore as a previous employee and a shareholder, he would lose his independence and could not provide services for the company. Upon graduation, Harold decides to describe himself as 'Accountant' on his business card. Section 57 Scope & Nature of Services states that Members “...should observe the principles of the Code of Conduct in determining the scope and nature of services to be provided.” (Scope & Nature of Services, 2011 para1). There are issues with this description because although he was qualified, he did not have the required level of experience to be considered a member. This therefore means that it was unethical for him to present himself as an accountant when he was not a full member. Section 191.65 forbids people to use the title CPA when they are not qualified members in Public Practice to use the designation of 'Accountant' without making disclosure of his capacity (Ethics Ruling, 2011 para 65). Clearly, Harold was not in public practice then so again, it was inappropriate to use the title of Accountant without specifying the scope of this designation. Using the Firm Name Aaron, Potter & Zzucker (3) For the sake of getting popularity and exposure in the phonebook, Harold decided to use the above name. According to Section 501.10 False Misleading or Deceptive Act in promoting or Marketing Professional Services members should not use false or deceptive means to promote their firms (Acts Discreditable, 2011 para11). Clearly, Harold Porter was working alone. There were no Aarons and Zzuckers in the firm who were CPAs. This therefore means that the use of the name was misleading. Further instruments in the Code of Ethics go against Harold in this direction. Section 502 prohibits members from advertisment, that is false, misleading and deceptive. Section 505.1 Form of Organization & Name says that members shall not practice public accounting under a name that is misleading (Form of Organization & Name, 2011 para 2). Providing Tax Services & Audit for Dumbledore (4) Although Harold did not have any experience in tax and auditing, he took the offer of his uncle to provide tax and auditing services for Dumbledore. There are two major components of the AICPA code which makes it unethical and potentially illegal for Harold to take these options. Section 201.2 Competence requires members to undertake professional services that they are reasonably expected to complete with professional competence (Competence, 2011 para2). Since Harold had never done tax and auditing before, it was wrong to do the books of a public company without any supervision because there was no assurance that he had the necessary professional competence. Section 57 Scope & Nature of Services states that members should observe the principles of the Code of Professional Conduct in
As a member of the AICPA, Harold Potter has some responsibilities to his customers and the wider society. This is because the AICPA has rules that each member has to adhere to…
The control environment provides discipline and structure. Internal controls are more effective when the duties are segregated instead of being performed by the same person. The manager is the employees responsible for overseeing the internal control system.
The research includes a list of internal control weaknesses such as the department,not the purchasing department,should make the purchase requisition,the receiving department should not give the original receiving report to the warehouse,the receiving repot,checks,disbursement vouchers,purchase orders
I have to indicate the weaknesses in internal accounting controls in the handling of collections. Discussion The first thing I would recommend is that an audit of the Church’s financial records be undertaken. It is preposterous that no audit has been made in recent years because the same trusted employee has kept both the Church records as well as served as Financial Secretary for the last 15 years.
The web based tools and the internet facilitate many useful activities of a business that influence customer and suppliers relationship. Need for online control has risen to help guide online based transactions because security is of concern. Current profusion of online controls like encryption, digital certificates, digital signatures, virtual private networks has created difficulty in understanding objective of online controls.
The research delves on the necessity to implement the COSO Framework in all United Kingdom entities. The COSO Framework enhances the internal control activities’ reduction of fraudulent and erroneous reports. The Committee of Sponsoring Organisations (COSO) framework monitoring process focuses on enhancing the preparation of financial reports of all entities, especially companies engaged in computerised generation of financial reports.
This paper is a report on the purchase and payment and the receipt and sales functions. The purchase and sales functions of this business happens to have some weaknesses which can be remedied by the implementation of the recommendations that have been tabulated. The purchase and the sales function of a business are important to a business.
Governance, ethics, reporting manipulation, increased materiality in numbers, polished earnings in terms of creative accounting and auditing frauds are the widespread outcomes of the said competitive pressures (Ricks, 2009; Verbeke, 2013).