Keystone Computer Case

The media article indicated that Coles was facing more than $4 million fines, as ACCC argued its behaviour of lying about bread freshness could constitute breach of consumer law (SMH 2015). As the total amount of fines could be considerable, along with a negative impact on reputation, Coles could have entered into financial distress. The reason I chose this article was that most Australian people shop in Coles every week, thus the case is closely related to our life which is worth talking about. Besides, the article covered issue of sales and non-compliance of law which often attract auditors’ attention. The event mentioned in the article posed a risk to auditors in terms of inherent risk. Inherent risk means an auditor fails to identify or correctly understand the business risks that could result in material misstatement (Clubb 2015b). It is apparent that Coles’ behaviour is a non-compliance of law, which is included in business risk (Clubb 2015b). Therefore, auditors need to better understand the event highlighted in the article to increase the possibility of uncovering material misstatement. Auditors are held accountable for the problem because the problem may relate to potential misstatement in financial statements. If an auditor fails to uncover the misstatement, it is likely that he or she will issue a false opinion. However, auditor should express a true and fair view to increase the confidence of the external

Option 1 refers to cut down the markup price of the computer and get top management informed about its future benefits and scopes. Taking advantage of past good relationships, Computron can make Konig understand the importance of high quality product and reliability to get the bid and make the future plant compete. Here the output is in terms of quality and hence customer satisfaction is higher.

The purpose of this memo is to document the planning of the financial statement audit

An audited company financial statement was provided to the Department as part of the examination, detailing the Licensee’s financial position as of December 31,

However, there have been many cases where the CEO and executive officers receive outrageous compensation even when the companies suffer. Overall, there is a wide disconnect between the incentive of the executives and the financial performance of their company, which needs to be fixed. By passing regulations and rules such as the Dodd-Frank Act, there is hope of shedding light on the connection between the company’s performance and the executives pay. Although it will provide a clear insight, it will not be able to set a strict regulated compensation or define what an executive should earn. Instead regulations will allow for more transparency for the shareholders regarding corporate governance issues such as executive pay. Along with that, it will force companies to take accountability for their actions. If they do poorly, then the executives should be paid less, and vice versa. Overall, there should be a direct alignment between executive pay and the company’s

Also another risk factor that will increase the company’s inherent audit risk is the situation of its cash flow. If a retail company has a negative cash flow which means it not generating enough cash to maintain its operations, the risk of misstatement will accordingly increase. As stated in Q1, auditors should spend more efforts on examine the cash accounts if the cash flow of the company shows some abnormal signals.

a. Familiarize yourself with the internal control system for acquisitions and cash disbursements by studying the information in Figure 10-12 and Figure 10-13.

In a highly competitive industry there can be many inherent risk factors embedded in a company. Two factors that would affect audit planning decisions could be complex valuation issues and related party transactions. Valuation issues may lead the audit team to request more

In such situations, the agency can create a system to warn of impending fiscal problems". Additionally, expenditures play fundamental aspect regarding fiscal policy, therefore accountants should be very responsible in dealing with expenditures (Smith and Lynch, 2004). Another essential point emerges when expenditures and revenues reflect a warning method to conceptualize the future by providing if there is any gap between them, which helps specialist to avoid the risk of overlooking influential details ("Expenditures and revenues forecasting,"

|Managements have incentive to overstate income with cash |If the engagement is accepted, the auditor

This afternoon I had just finished a meeting with representatives from Apple who is requesting a 30 second advertisement slot, specifically requesting for their ad to be played during 106 & Park. They are requesting that they pay a much lower price than the our initial offering price of $6,500 per 30 second. Their main reasons being:

Subsequently, Candy (2012) researched whether senior official compensation was affected by the worldwide financial crash of 2008 using an example of Three-Australian companies. The investigation examined senior official’s compensation packages as reported in three-ASX listed companies, viz. Cochlear, FMG, and QANTAS. The study observed that senior official compensation level was not influenced by the crisis, with all senior official classifications rising in compensation compared with the earlier year. The question of wonder is, perhaps, why even in the midst of such deadly economic downturn would the ‘pay-performance rise compared to the last years’? In addition, the study also considered whether or not, firms stakeholders were getting what they have paid their executives to do. The aim was to oversee pay-performance and KPIs, namely revenue as functions of sales, EPS and aggregate sales volume-sold by the firm. It showed that those

The potential risk for the Tax exempt revenue bond is the collateral requirement of the escrow on gross receivables for EHC. If there is a decline in the inpatient population, and low or slow

The political spotlight on compensation poses both near-term and longer-term risks to financial institutions. An

The issue of low sales at PAC was further enhanced as a result fraudulent sales data which inflated sales for the fiscal year due to non-finalized sales that were pre-booked. This not only goes against company policy but it also unethical and therefore the figures should be adjusted correctly. Reprimanding the employees and holding a meeting regarding unethical reporting ties consequences to the behavior and should discourage any and all cases of potential fraud (Beaudoin, Cianci, & Tsakumis, 2015). Lastly, employee communication methods can be improved at PAC by creating a greater boundary of transparency between employees and management. Transparency strengthens internal communication because it creates an open culture for employees to talk and engage their employees if they know their employee actually hears them