2. Suppose that a lodge uses one or more of the practices that you identified in responding to the previous(prenominal) question. What implications, if any, do those practices hit for the companys independent auditors? by and large Accepted accountancy Principles, GAAP, allow clams management where the goal is to maximize earnings that benefit the organization as opposed to earnings use of goods and services provoked to commit fraud than the control group by pressures tied to economic cycles, equity issuance, and achievement. Manipulating earnings is usually admonitory for the organization and for the auditors as well. Incentives and/or pressures for earnings manipulation are unrealistic economic goals, bonus and incentives that trigger greed and wrong issues. The implications for independent auditors are: 1) Companies pose a higher risk of exposure 2) More testing would be required 3) Auditors may be allowed to charge a premium fee 4) Auditors re sitation could be at stake 5) Adjustments required reflecting real earnings may become more complex and subjecting to further discussion with management.
3. What auditing standard, of any, requires auditors to repair whether their clients have properly categorize key amounts in their biweekly income statements?
Identify three methods that audit clients can use to put a favorable spin on their reported operate results without changing their bottom line or net income.
AU 411, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles: 411.04 says, The auditors opinion that financial statements present somewhat an entitys financial position, results of operations ... as to whether (a) the accounting principles selected and applied have general acceptance ... (d) the information presented in the financial statements is classified and summarized in a reasonable manner, that is, neither too precise nor too condensed (see section 431) ... AU 508, Reports on Audited Financial...If you want to take up a full essay, order it on our website: Ordercustompaper.com
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