Auditing Is The Accumulation And Evaluation Of Evidence Accounting Essay

Auditing Is The Accumulation And Evaluation Of Evidence Accounting Essay Auditing is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria. Auditing should be done by a competent, independent party and communicate the results to interested users. (Elder, and others, 2007, p .4) The purpose of audit is to enable the auditor to express an opinion whether the financial statements present a true and fair view in accordance with the identified financial reporting framework, and will enhance the credibility of financial statements. Audits can improve a companys efficiency and profitability by helping the management better understand their own work and financial system. The management, as well as the shareholders, suppliers and financers, is assured that the risks in the organization are well-studied, and effective systems are in place to handle them. Furthermore, audit can identify areas in an organizations financial structure that need improvement, and how to implement the proper changes and adjustments. It uncovers inaccuracies and discrepancies within an organizations records, which may be indications of weak financial organization or even internal fraud, and reduce the risks. (Auditing, n.d.) At present corporate scandals and fraud continues to be a pervasive problem and is very common across the world. However these scandals and fraud are so massive that every time many people especially employees of the company lose their jobs and investors are bearing from major losses in these incidents. Corporate fraud is any fraud committed against a business and is used to include many different wrongs that may occur within a business. Corporate fraud takes many forms, including insider trading, embezzlement, false billing schemes, securities fraud and forgery, Asset misappropriation fraud, Business opportunity fraud, Employment fraud, Short and long firm fraud, Employee fraud etc. Among the most dangerous forms of corporate fraud is known as long firm fraud, which occurs when a business is founded on legitimate grounds, and then lead by certain unethical individuals toward a purpose of defrauding over a long time. (Corporate fraud, n.d.) It is difficult to expect such scandals prior to the exposure as these involve complex methods for misusing funds, overstating revenues, understating expenses, etc. According to studies conducted in the United States, United Kingdom and Australia (2010) states that corporate fraud increased in the previous 12 months and economic conditions have w orsened. The studies also found that the dollar amount lost to fraud also had increased as well. The study conducted by Association of Certified Fraud Examiners (ACFE, 2009) estimated that fraud cost U.S organizations 7 percent of annual revenues, or $ 994 billion in losses based on 2008 gross domestic product. Although financial statement fraud less frequent, however it typically involved more than $ 2 million. Simultaneously, in the United Kingdom KPMGs Fraud Barometer found  £1.3 billion of fraud in 2009. National head of forensic Gary Gill (2010) states that 2009 Australia KPMGs Fraud Barometer found million in major fraud cases. And they highlighted that although the number of cases remain same compared to first to second half of 2009, the value or cost of the fraud doubled. This could weaken investors and shareholders confidence. In order to prevent or reduce from corporate fraud auditors do have a duty to detect errors and fraud hence auditors need to ensure that the financial statements are presented in true and fair view in accordance with the identified financial reporting framework. This research will assist the auditors to find out what they can be done or what would be their responsibility to reduce the massive corporate fraud which, is rapidly spreading around the world. Auditors obtain a reasonable assurance that financial statements are free of material misstatement caused by error or fraud. One of the challenges faced by the auditor in detecting fraud is the independence of the auditor. Some companies management will not allow the auditor to act with integrity and exercise objectivity and professional skepticism. The other challenge faced by the auditor is that the management does not provide sufficient information to detect the fraud. The auditors would not get enough supporting documents to prove that whether the transactions are correctly recorded. Maintaining public trust is also one of the challenges that auditors would face, hence the public has raised the question as to whether audit functions can be trusted, after financial statement fraud committed by big companies such as Enron, Tyco, and World.com. In order to prevent such problems from occurring, this research has been conducted in order to help auditors to enhance audit quality, preve nt and detect potential fraud before it is too late. Brief description of project objectives. (i.e. scope of proposal, constructs used, limitations and significance) Andrew Marshal (2009) said that when it comes to corporate fraud, nowhere is safe, hence there are fraud scandals occurring everywhere in the world. CPA Journal (2008) estimated that a typical organization loses 5 percent of its annual revenues to fraud, or about $ 4,500 per employee each year. Furthermore the CPA Journal (2008) states that most frauds involve a lack of adequate internal controls (opportunity), the need to maintain an expensive lifestyle or pressure to meet goals (incentive), and the perpetrators lack of awareness that their actions are wrong (self-rationalization) or simple lack of integrity. However, investors expect auditors to give them absolute assurance for detecting material misstatement due to fraud. The majority of investors want from an audit absolute assurance the financial statements are free of all types of material misstatement. The main objective or the aim of this research will be on how and what are the methods that auditors can contribute to minimiz e material misstatements from financial statements and reduce corporate fraud. The other objective of this research is to identify the difficulties in detecting corporate fraud and how to enhance audit quality. Besides that this research will evaluate the gaps in internal controls and how auditors can come out with a financial statement without any biasness. Scope of the Study The scope of this study will concentrate on auditors and their responsibilities towards the public. In addition it will focus on fraud awareness, fraud risk and the corporate governance in the organization. Furthermore this study will focus on the abilities and the knowledge which auditors should have to accomplish their obligations. Limitations of the Study The limitations of this research will be the difficulty in collecting primary data; hence this research will be conducted with face-to-face structured interviews and a survey questionnaire. The time limit for the interview may not be enough based on the availability of the participants, therefore interview has to be scheduled for the availability of participants. Significant of the Study This research will facilitate the auditors to maintain public trust and will enhance audit quality. By enhancing audit quality auditors can reduce the corporate fraud and make the companies trustworthy. When audit quality is enhanced auditors will be more responsible in detecting and preventing fraud. And auditors will perform their work more carefully as a result the companies will not experience financial trouble or difficulties. This research will gather information about how corporate frauds can be reduced and auditors as a key people who needs this information to be applied in the corporate world to reduce corporate fraud. Brief description of the models/theories/concepts that will be used in this proposal. (i.e. consumer behaviourism model, CSF and etc.) This project does not require any concepts, theories or models to be used in the process of doing it. E Academic research being carried out and other information, techniques being learnt. (i.e. literature what are the names of books you are going to read / data sets you are going to use) The books that this research will use are Audit and Assurance Books, Internal and External Auditing books. Magazines, online articles and journals which are related to corporate fraud and auditors will be used. Journals include such as Audit disaster futures: antidotes for the expectation gap by Fran M. Wolf, James A. Tackett and Gregory A. Claypool. And CPA journals such as Auditors responsibilities with respect to fraud: a possible shift. In addition this research will use the Audit firms reports such as KPMG. Other relevant sources include: http://www.reuters.com/article/idUSTRE5AJ03S20091120 http://www.reuters.com/article/idUSN1717856320100317 http://www.bobsguide.com/guide/news/2009/Nov/20/Corporate_accounting_fraud_increasing_around_the_world.html http://www.kpmg.com/AU/en/IssuesAndInsights/ArticlesPublications/Press-Releases/Pages/Press-release-fraud-doubles-16-Feb-10.aspx http://www.irs.gov/compliance/enforcement/article/0,,id=213768,00.html http://www.anonymousemployee.com/csssite/sidelinks/corporate_fraud.php http://www.procurement.travel/news.php?cid=corporate-fraud-rises-employees-layoffs-economy.Mar-10.31 http://www.emeraldinsight.com/journals.htm?articleid=868441show=html Brief description of the materials/methodologies needed by the proposal. (i.e. data collection methods, sampling, sample size and target group etc.) The data for this research is intended to be covered from Malaysia. Primary data will be collected from listed companies and Audit firms of Malaysia. Data will be collected with the help of questionnaires and interviews. Face-to-face structured interviews will be carried out. The interview will be kept short to respect the time constrains of the participants, hence would not be exceeding 30 minutes. Where clarification is required, further follow-up interviews can be carried out over telephone or e-mail where necessary. A total of 150 questionnaires would be prepared and distributed to the employees of listed companies of Malaysia and Certified Public Accountants (CPA) of Malaysia. The questionnaire would also be distributed to the shareholders for the listed companies of Malaysia and other employees who are working in financial institutions as well. The questionnaires would be more closed ended structured while there would be some open ended questions included as well. Most of the secondary data will be taken from online journals, Emerald, other websites and Athens database. G Brief description of the evaluation and analysis proposed for this project. (i.e. project deliverables and hypothesis, correlation test etc) Hypothesis of the Research This research would benefit the Audit firms, public and private limited companies and shareholders and stakeholders of the public companies. This research not only benefits to Audit firms, public and private companies, but for the public as a whole. The hypothesis testing would show the effect and the changes of audit quality. This hypothesis testing would be the relationship between internal auditors and the external auditors, being independent between the internal auditors would assist the external auditors to work independently and detect fraud and prevent them re-occurring. In addition this research would expect that there is a relationship between internal control and the audit quality and relationship between audit ethics and audit procedures that the external auditors carried out. Deliverables The end result of this research would provide empirical information to all auditors and the top management of the company. Especially this information would facilitate the directors to come out with reliable financial statement to its users. This research will provide theoretical information to all the directors and to the management of the company in order to prevent the financial statements from misstatement and fraud. This information helps the company from losing billions of dollars per year from corporate fraud and will safeguard the shareholders interest and the stake holders of the company. H. Illustration of how this project will benefit the future employability Relevance to Industry All the accounting and financial industries will benefit from this research. As an audit firm this research will help both enhancing the audit quality and will facilitate the new methods to detect fraud and will encourage new audit firms to perform the audit with due care. Auditing is one of the challenging works which assist the auditors to use their knowledge and experience and at the same time the new auditors will learn and gain experience in the audit field and would learn new methods on detecting frauds. This research would benefit all the corporations to minimize their corporate fraud cost. Significance to Modules This research is directly related to Audit and Assurance, Forensic Accounting. And also somehow this research is related to corporate governance as well.

Discovering Freedom in Kate Chopin’s The Story of an Hour Essay

Discovering Freedom in Kate Chopin’s The Story of an Hour As humans, we live our life within the boundaries of our belief systems and moral guidelines. Yet, one unexpected event can suddenly knock us out of our comfort zone and thrust us into a completely different arena. Such is the case of the central character in Kate Chopin’s â€Å"The Story of an Hour.† Louise Mallard, upon hearing the news of her husband’s tragic death then subsequent revelation of its fallacy, finds herself quickly moving from grief, through a sense of newfound freedom, and finally into the despair of the loss of that freedom. After learning of her husband’s death in a railroad disaster, Mrs. Mallard sinks into a deep state of grief, as one would be expected to do upon receiving such news. She weeps uncontrollably until she can weep no more. Finally, she seeks refuge alone in her room, accepting comfort from no one. Physically and emotionally drained, Mrs. Mallard sits in a chair in front of an open window. Through that window begins a realization that haunts her as it creeps into her consciousness, and mo...

Case Analysis: Global Payments Breach

Table of Contents Executive Summary3 Company Background3 Security Breach3 Cost of Security Breach3 Closer Look at Control Issues4 Steps to mitigate data breach4 Conclusion6 References6 Executive Summary A data breach at a credit card payments processing firm Global Payments potentially impacted 1. 5 million credit and debit card numbers from major card brands Visa, MasterCard, Discover and American Express (money. cnn. com) in April 2012. Company Background Founded in 1967, Global Payments (NYSE:GPN) is one of the largest electronic transaction processing company based out of Atlanta, GA and operations in several European and APAC regions.The company provides business-to-business card payment and processing solutions for major card issuers such as Visa, Master Card, Amex and Discover. The company also performs terminal management and electronic check conversion. Security Breach Exactly a year ago, in March 2012 the company was hit by a massive security breach of its credit card payme nt processing servers impacting more than 1. 5 million customers (nytimes. com). The company reported unauthorized access to its processing system resulting in data transfer of 1,500,000 card numbers.According to the company report, data stolen includes name, social security number and the business bank account designated for payment processing or deposit services. As a result of unauthorized access to the company’s servers millions of customer confidential records got exported. Cost of Security Breach While this data breach is not the largest of the cases, Global Payments data breach turned out to be a $93. 9 million deal according to the company’s Jan 8th 2013 quarterly report (bankinfosecurity. com). This is mainly spent in enhancing security and ensure compliance with Payment Card Industry Data Security standard.The company hired a qualified security assessor (QSA) that conducted an independent review of the PCI-DSS compliance of Global Payments systems and advised many remediation steps for its systems and processes. The company also paid fines related to non-compliance and has reached to an understanding with several card networks. The majority of the expenses, $60 million were originated out of professional fees while $35. 9 million was estimated to be fraud losses, fines and other charges imposed by credit and debit card networks.However the company received $2 million in insurance recoveries. There could be additional expenses of $25 to $35 million in reminder of 2013 due to investigation, remediation and PCI compliance. Closer Look at Control Issues While the company would like to conceal finer details of the investigation a closer look into this case clearly reveals a fraud triangle of pressure, rationalization and opportunity. It is highly likely that an insider played a major role in exposing security vulnerabilities of the company’s information technology systems and lack of proper monitoring mechanisms.Lack of proper interna l controls resulted in the insider making use of the opportunity to commit fraud. The case clearly indicates that either system monitoring mechanism was inadequate and could not prevent the data thief to get access to PCI data. It is not clear whether high level data encryption was implemented for personal data such as social security numbers and bank accounts. Steps to mitigate data breach A number of precautionary and data protection measures should be taken to ensure PCI compliance and prevent such a massive data theft (sans. rg). 1. Establish multiple levels of data security specifically for personal information such as customer account numbers, social security numbers, customer addresses, phone numbers etc. , This includes creating authorization algorithms and every data retrieval gets logged and reported. 2. The data should be encrypted by utilizing best of data encryption methodologies to protect both data at rest and in transit. Data at rest is the information residing in da tabase and file servers and even in personal computers. On the ther hand, data in transit refers to data moving across local and wide area networks. 3. Identifying all the sensitive data that needs encryption is the first step in protecting data based on the data classification policies. 4. Locate data at rest and data in motion and then apply techniques such as eradication i. e. removal of unnecessary data lying in file systems or personal PCs; obfuscation of data to ensure it is not in readily readable format and finally encrypt by employing industry standard data encryption techniques. 5. Follow PCI-DSS requirements for financial data . PIN blocks, CVV2 and CVC2 card verification data cannot be stored at any time. b. All sensitive information must be encrypted during transmission over networks that are main targets for hackers. c. Ensure that security related technology is resistant to tampering and do not disclose any security related documentation. d. Ensure sound and practical policies around data generation, updates, deletion, storage and archival of cryptographic keys e. Ensure that data exchange is conducted over a trusted path that follows high controls and confirms to authenticity of content.Conclusion The numbers of cyber threats are increasing at an alarming level and a small overlook on company’s behalf is enough for hackers to steal confidential data and put consumers at risk. In today’s high tech world of information technology customers information is at high risk of breach and any company both private or public involved in dealing with financial data has to ensure highest level of regulatory compliance to protect consumers interest, maintain their trust and finally run as an ongoing concern References 1.Jessica Silver-Greenburg, Nelson D Schwartz (March 30 2012). â€Å"Master Card and Visa Investigate Data Breach† New York Times. Retrieved 2013-03-17. 2. Information Security Group (January 10 2013). â€Å"Global Payments Breach Tab: $94 million†. www. bankofsecurity. com. Retrieved 2013-03-17. 3. Julianne Pepitone (April 3 2012). â€Å"1. 5 million Card numbers at risk from hack†. www. money. cnn. com. Retrieved 2013-03-17 4. Dave Shackleford (November 2007). â€Å"Regulations and Standards: Where Encryption Applies†. www. sans. org/reading/analyst_program/encryption_Nov07. pdf

Essay on How Do Other People Influence Our Behaviour

With regard to the above question, I will be evaluating the concepts of conformity and obedience. In relation to this the work of Zimbardo, Haslam and Milgram will enable me to explain a variety of ways in which those around us may influence the way we behave. Conformity is defined as a change in behaviour and/or attitude as a result of group pressure (Hogg Vaughan, n.d.). In 1971 Phillip G Zimbardo carried out an experiment with the aim of determining the psychological changes of both prisoners and guards. He did this by placing 18 college undergraduates in a simulated prison environment (Prisonexp.org, 2014). The time course for the experiment was 14 days; however, it was ended precipitately after only 6 days as the guards were seen to†¦show more content†¦As Zimbardos 1971 prison experiment provided strong examples of oppression, Alex Haslam designed a similar prison experiment in 2002 with the aim to understand social identity and conformity when placed in a hostile environment. In the case of any negative behaviour i.e. tyranny, participants were put through a thorough selection process to ensure that this wasn’t down to individual personality traits. 15 men were selected and placed into 5 different groups of similar personalities; one from each group became guards and the rest prisoners thus resulting in two groups of similar psychological profiles. Physiological data and questionnaires were collected daily as a means of monitoring any change in psychological state. On day one participants were informed of the possibility of a promotion, this prevented the prisoners identifying as a group as the reward of personal gain was much higher (Bbcprisonstudy.org, 2014). Having said that, once the decision was made the prisoners conformed to their role and united as a group and formed an alliance against the guards. 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