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Accounting Best Practices Essay

¶ … Yost directly aware of the fact that counting different locations on the same day was not the best idea if accuracy was demanded. However, Yost shot down the idea of doing all locations on the same day and even went to so far as to sign off on the fact that doing all locations on the same day was not practical due to manpower/locational issues. B) To defend themselves against the bank, the CPA firm could simply point to the details enumerated in the prior part of this question. Yost specifically and explicitly brought up the fact that doing counts on different days was less than wise. This was surely because even if no subterfuge was going on (and it was), it would give the appearance of impropriety, or at least bad procedure.

C) Yes, they would probably prevail. Yost specifically noticed and advised their client that they were unwise to do the counts on separate days and they asked for (and got) a waiver from the client by having them vouch in writing that the same-day counting method would not work. Since it is in writing, and not a verbal he said/she said proposition, Yost will almost certainly prevail.

D) No…it should not have any effect. There is a section in the law that specifically refers to deception and manipulation. However, Yost did not engage in subterfuge and they specifically found and brought forth the fact that separate inventories were not a wise idea. However, their client resisted and Yost instead had them sign...

For Stuart Supply to then turn around is the height of hypocrisy and the bank is actually suing the wrong company. The only way one could fault Yost is that Yost shouldn't have allowed the waiver and insisted that the multi-day inventory thing not be done. However, Yost could not force their hand if they wanted to which would have left them with the choice to part ways with Stuart on ethical grounds.
Chapter 5 -- Chapter 19

Probably…and it would be because they did not adequately supervise their employee who is an agent and representative of their firm. The accounting firm could then turn around and punish (or sue) Small. However, it is ultimately the responsibility of management to ensure the quality of employees' work before it is made public and put in print. Small definitely did wrong and indeed broke ethical and legal laws and standards. However, since he is not in charge, his managers (at a minimum) would be liable for his malfeasance on a vicarious basis.

Chapter 6 -- Question 21

A) The purpose of the internal controls report is a review and summary of the internal protections and frameworks that prevent incompetence and/or malfeasance as it relates to reporting. For example, giving someone the ability to key the data for as well as print a paycheck is less than wise as one person should do one and a different person should do the other. The other part relates to the display, manifestation and rendering…

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Chapter 8 - Question 30

There are a few red flag and issues that should be discussed about the two sets of meeting minutes. First, the talk about the IRS audit was a little incomplete and there was not a lot of good news to glean from it. Related to this is the handling of the computer equipment and this neatly dovetails with the timeline of the computer switchovers. They dispensed with the equipment shuttered after the 2008 computers were purchased and then the very next day the spent money for yet another computer system in the form of a loan. The fact that the IRS audit period relates to property and it's the same year as the last computer upgrade is a head-scratcher.

Also concerning is that that every single vote was unanimous. The only thing that seemed to get anyone's dander up was the talk about the profit sharing for other employees. In terms of knowing for sure whether the meeting minutes were all forwarded, this would require either the auditor to be present in the room for all meetings or that the people involved sign off on the minutes being accurate and complete. If the auditor is presented with the fact that they are complete and they turn out not to be, the people who signed committed a fraud, in all likelihood. Again, though, it would be better if it was required that the auditor take the minutes themselves or author their own copy so as to compare to what is published and approved. If anything is omitted, changed or materially represented, then the auditor would have a cause of action to voice some concern.
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