Category Archives: ACC 546 (NEW)

ACC 546 Week 1 Assignment Avoiding Bias Paper NEW

ACC 546 Week 1 Assignment Avoiding Bias Paper NEW

Avoiding Bias Paper – Assessment Activity – Week1 – ACC/546 – eCampus
Read the pages 1-9 section of Professional Judgment and distinguish the four tendencies toward professional judgment bias:
1.      Availability Tendency
2.      Confirmation Tendency
3.      Overconfidence Tendency
4.      Anchoring Tendency
In a paper 750 to 1,050 words, evaluate how an auditor can avoid these bias traps. For the remainder of the course and subsequent assignments, continue to consider and utilizeyour understanding ofthese biases.

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ACC 546 Individual Assignment Evaluating the Case Against Lehman Brothers NEW

ACC 546 Individual Assignment Evaluating the Case Against Lehman Brothers NEW

The Case Against Lehman Brothers”. Write a 750- to 1,050-word evaluation. Analyze and then summarize the responsibilities and failings of the firm, the firm’s accountants, and government regulators.

Provide an update in the case against the firm, its top executives, and accountants.

Apply what you learned to your current or future profession. How will you integrate this knowledge to make you a better employee

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ACC 546 Individual Assignment Case 5.6 SarboxScooter, Inc. NEW

ACC 546 Individual Assignment Case 5.6 SarboxScooter, Inc. NEW

Part A
1.     According to AS5:
a)     What should the auditor consider when determining whether an account should be considered significant?
b)      What qualitative factors might cause an account that is otherwise relatively small quantitatively to be considered significant?
c) What qualitative factors might cause an account that is greater than materiality to be considered not significant?
2. Auditing standards require the identification and testing of entity-level controls. What are examples of entity-level controls? What are the auditor’s responsibilities with respect to evaluating and testing a client’s period-end financial reporting process?
Part B
1.     What are the definitions of a control deficiency, significant deficiency, and material weakness as contained in AS5? Which, if any, of these deficiency categories must the external auditor include in the audit report?

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ACC 546 Individual Assignment Case 5.3 Red Bluff Inn & Café NEW

ACC 546 Individual Assignment Case 5.3 Red Bluff Inn & Café NEW

[1] What are your two biggest concerns relating to possible fraud for the café part of the business? For each concern, generate two or three controls that could effectively reduce risk related to your concerns. Use common sense and be creative!
[2] What are your two biggest concerns relating to possible fraud for the motel part of the business? For each concern, generate two or three controls that could effectively reduce risk related to your concerns. Use common sense and be creative!
[3] Describe the potential impact of your proposed controls on the morale of the couple in charge of the day-to-day operations. How might Francisco deal with these concerns?
[4] Briefly describe the impact each proposed control would have on the efficiency of running the business. Are the controls you generated both effective and efficient?

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ACC 546 Individual Assignment 1.1 Ocean Manufacturing, Inc NEW

ACC 546 Individual Assignment 1.1 Ocean Manufacturing, Inc NEW

2. What nonfinancial matters should be considered before accepting Ocean as a client? How important are these issues to the client acceptance decision? Why?
5. (A). Prepare a memo to the partner making a recommendation as to whether Barnes and Fischer should or should not accept Ocean Manufacturing, Inc. as an audit client. Carefully justify your position in light of the information in the case. Include consideration of reasons both for and against acceptance and be sure to address both financial and nonfinancial issues to justify your recommendation.
6. (A). How might the confirmation tendency affect the client acceptance decision?
6. (B). How might the overconfidence tendency come into play in the client acceptance decision?

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ACC 546 Case 9.7 RedPack Beer Company NEW

ACC 546 Case 9.7 RedPack Beer Company NEW

 

Case 9.7 RedPack Beer Company covers estimating allowance for bad debt

[2] Following your analysis of the information in Schedules A-D, assume that you met with RedPack’s Credit Manager, Katie Henson, to ask her a number of questions related to specific customer accounts in the Accounts Receivable Aged Trial Balance. A transcript of your interview notes is provided as Schedule E. Use that information to address the following:


[a] Based on your reading of the transcript, do you agree with the specific reserves established by the credit manager for Distinct Beer Distributor, Eagle Beverage Group, and Golden Holdings? If yes why? If no what do you believe the specific reserves should be and why?

[b] Based on your reading of the transcript discussion, would you have any concerns with other aspects related to the reporting of revenues and accounts receivable? Explain your answer.

[c] Based on the information you have, develop an estimate of the account balance for the allowance for bad debts and compare your expectation to the client’s estimate summarized in Schedule B for the allowance for bad debts. Does the amount you estimated agree with the client’s estimate in Schedule B? If it does not agree, by how much does it differ and is that difference material?

 [d] Determine the adjusting journal entry(ies) needed, if any, to adjust management’s estimate of the reserve to your audited estimate and post your entries in the Adjustments column in Schedule A.
[e] Based on your reading of the professional standards in requirement 1 above, what additional procedures would you need to perform to conclude on the adequacy of the allowance for bad debt?

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ACC 546 Case 9.4 Bud’s Big Blue Manufacturing NEW

ACC 546 Case 9.4 Bud’s Big Blue Manufacturing NEW

Case 9.4 Bud’s Big Blue Manufacturing covers accounts receivable confirmations
REQUIRED
[1] List the four factors auditors should consider when evaluating the results of confirmation procedures. Also, what are three of the characteristics of a reliable confirmation? (For this and other questions, you may wish to refer relevant auditing standards).
[2] What does it mean to “maintain control” over the confirmation requests and responses? What could go wrong if the auditor doesn’t maintain control over the confirmation process?
[3] Complete the audit log provided on the next page for each of the seven remaining confirmations. Consider whether each confirmation provides sufficient, appropriate audit evidence, whether sufficient alternative procedures have been performed for non-responses, and whether additional procedures should be performed before concluding that the confirmation provides evidence supporting the client’s account balance. Be as precise and concise as possible.
[4] What is the difference between a positive and a negative confirmation? What are the advantages and disadvantages of each type?
[5] Search the internet to identify a real-life situation where an auditor apparently did not maintain sufficient control over the confirmation process. Briefly describe the situation you found.
PROFESSIONAL JUDGMENT QUESTION
It is recommended that you read the Professional Judgment Introduction found at the beginning of this book prior to responding to the following question.
[6] After completing the confirmations review, your senior asks you to assess the reasonableness of the allowance for bad debts. Think about the anchoring tendency discussed in the Professional Judgment Introduction. How could the anchoring tendency bias your reasonableness assessment? What are some ways that you could mitigate the possible effects of the anchoring tendency in assessing the reasonableness of the allowance?

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ACC 546 Case 9.3 Longeta Corporation NEW

ACC 546 Case 9.3 Longeta Corporation NEW

Case 9.3 Longeta Corporation
overs auditing revenue contracts.
You want to be thoroughly prepared for the meeting with the audit manager. Perform the following procedures to be certain you have all necessary information about the transaction’s treatment.
[1] The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) recently completed a joint project to develop a common revenue standard for U.S. GAAP and IFRS to improve revenue recognition practices and to remove inconsistencies and weaknesses in revenue requirements. The updated guidance is contained in the Accounting Standards Codification as Topic 606, “Revenue from Contracts with Customers.” Review that guidance to summarize the core principle for recognizing revenue and briefly describe the five steps needed to achieve the core principle. Also, describe how the core principle was not achieved in this situation.
[2] In your own words, explain the company’s reasoning for recording $5.8 million as current revenue while recording the remaining $1.2 million as deferred revenue. Also, document where on the financial statements the deferred revenue account would be presented.
[3] Assess the content of the separate letter issued by Longeta’s vice president of sales to Magicon. Document your conclusion about how the content of the letter affects or does not affect revenue recognition for Longeta for the year ended September 30, 2015.
[4] Given that the letter from the vice president of sales was not attached to or documented in the order letter submitted by Magicon to Longeta, document your conclusion as to the impact, if any, the vice president’s letter has on the accounting treatment for the transaction since it was not part of the order letter.
[5] Research PCAOB Auditing Standards on the PCAOB’s website (www.pcaob.org) to summarize the guidance for auditors in regards to their assessment of the risk of material misstatement related to revenue recognition. What do those standards require of auditors in regards to their assessment of risk related to revenue recognition?
[6] Auditing standards describe three conditions that are usually found to be present. What are those three conditions and what red flags, if any, might be present at Longeta?
[7] The separate letter from the vice president of sales was emailed and faxed to Magicon representatives. What would be the impact if Longeta’s vice president had only provided that information orally to Magicon representatives and not forwarded the information in written form?
[8] As of September 30, 2015, Magicon had only submitted the order letter. Document your conclusion about the impact on the accounting for the transaction if Longeta and Magicon (a) sign the reseller agreement within 30 days or (b) do not sign the reseller agreement within 30 days.
[9] Document your final conclusion about the accounting treatment of this transaction between Longeta and Magicon. Be sure to provide a basis for your conclusion.
PROFESSIONAL JUDGMENT QUESTION
It is recommended that you read the Professional Judgment Introduction found at the beginning of the book prior to responding to the following question.
[10] One of the environmental factors affecting judgment is the “rush to solve” judgment trap. Briefly describe the trap and how it applies to the situation affecting the recording of the sales transaction.

 

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ACC 546 CASE 9.1 Wally’s Billboard & Sign Supply NEW

ACC 546 CASE 9.1 Wally’s Billboard & Sign Supply NEW

CASE 9.1 Wally’s Billboard & Sign Supply
After completing the audit program, answer the following questions:
[1] Why is the audit of cash an important part of the audit?
[2] Bill performed tests of controls for all transaction cycles with good results. Why is it important to also perform substantive audit procedures for the ending cash balance even when tests of controls over transactions that affect the cash account indicate that those controls are operating effectively?
[3] According to AICPA auditing standards, what are the necessary ingredients for audit evidence to be considered “appropriate”?
[4] For each procedure listed in the audit program (schedule C 2), indicate the primary assertion(s) targeted by the procedure.
[5] For each error, concern, or adjustment you listed on the Audit Summary (schedule C 3), briefly describe at least one additional test you could perform to gain evidence as to whether or not the cash account is materially misstated.
[6] The AICPA and the American Banker’s Association developed a standardized bank confirmation form—see working paper C 6. What is the purpose for confirming information in item number two on the bank confirmation form? Identify the accounts and related audit assertion(s) to which the information in item number two is relevant.
[7] What audit procedures might you perform if you were to decide that the risk of fraud involving the cash account was relatively high for this client?
[8] Perform an online search for “electronic bank confirmations.” Summarize in one page or less what you learn about recent developments in the use of web-based bank confirmations. Include a brief discussion of the advantages of electronic confirmations in your write-up.

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