The expectations gap occurs because many investors and policy makers expect auditors to detect all fraud, and if they do not, the auditors are presumed to be at fault." (Apostolou and Crumbley, 2008)
The specific requirements of auditors are included in SAS 99 AU 31 and IAS 240 and in summary includes the following requirements: (1) Considering a company's internal controls and procedures, and how these are actually implemented, when planning the audit; (2) Designing and conducting audit procedures to respond to the risk that management could override internal controls and procedures; (3) Identifying specific risks where fraud may occur; (4) Considering whether any misstatement uncovered during the audit may be indicative of fraud; (5) Obtaining fraud-related written representations from management; and (6 Communicating with appropriate managers and the board if the auditor finds an indication that fraud may have occurred. (Apostolou and Crumbley, 2008)

VI. FRAUD TRIANGLE

The fraud triangle is…...

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BIBLIOGRAPHY

Ramos, Michael (2003) Auditor's Responsibility for Fraud Detection. Journal of Accountancy; Jan 2003; 195, 1; ABI/INFORM Global. Adapted from'Fraud Detection in a GAAS Audit' SAS No. 99 Implementation Guide. Online available at: http://users.ipfw.edu/pollockk/SAS99Article.pdf

Ethics Decision Tree: For CPAs in Government (2008) American Institute of CPAs, Inc., 2008. Online available at:  http://www.aicpa.org/download/ethics/EthicsGover294cv.pdf 

Apostolou, Nicholas and Crumbley, D. Larry (2008) Auditor's Responsibilities with Respect to Fraud: A Possible Shift? The CPA Journal. 2008 February. Online available at:  http://www.nysscpa.org/cpajournal/2008/208/essentials/p32.htm 

Farrell, Barbara R. And Joseph R. Franco. 1999. "The Role of the Auditor in the Prevention and Detection of Business Fraud: SAS No. 82." Western Criminology Review 2/1. [Online]. Available: http://wcr.sonoma.edu/v2n1/v2n1.html.

In recent times, there have been accounting scandals that have stunned the finance and accounting realm, and thereby reemphasized the significance of maintaining proper accounting practices. The recent accounting scandal of Olympus Corporation, a Japanese manufacturing company for cameras and endoscopes is selected for this study. The company's scandal encompassed a 13-year period of accounting irregularities totaling almost $1.7 billion (Infinit Accounting, 2014).
Audit Report Issued by CPA Firm

When Michael C. Woodford was appointed as president and Chief Executive Officer (CEO) of Olympus Corporation, he endeavored to make certain that the financial statements of the company were accurate and reliable. It is at this time that he discovered doubtful transactions in the statements of financial position of the company, with respect to the expenses reported. He instantly started inquisitions regarding these transactions, particularly about the inflated M&A advisory payments. Woodford was sacked by Olympus two weeks later upon deliberating with the…...

Independence of Auditors
The objective of this study is to consider the statement as follows: "Unquestionably, the HIH story is also one of auditor failure" and to research into the background of the HIH collapse in Australia insofar as it relates to the role of auditors and their liability. A report will be prepared with summaries of the most important documents concerning this issue of auditor independence after the HIH collapse, the regulatory/legislative response and the review of the legislative response.

Ray Williams founded HIH in 1968. A ritish company, CE Health PLC acquired HIH in 1971. Prior to the collapse, HIH was the second largest Australian insurance company covering several segments of insurance. HIH had expanded globally into both the UK and U.S. markets. On the 15th day of March 2001 HIH entered into provisional liquidation with the liquidator estimating that HIH's total loss equaled approximately $A5.3 billion resulting from valuations…...

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Bibliography

Allen, Gregory (2006) The HIH Collapse: A Costly Catalyst for Reform. Hein Online. Citation 11 Deakin L. Rev. 137-2006.

Australian Auditor Independence Requirements: A Comparative Review (2006) The Treasury. Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004. No. 103.

Chapple, LJ and Koh, B. (2007) Regulatory Responses to Auditor Independence Dilemmas -- Who Takes the Stronger Line? Australian Journal of Corporate Law 21(1).

Corporate Disclosure: Strengthening the Financial Reporting Framework (2002) Commonwealth of Australia.

The value of audit is therefore noted to be derived wholly from its independence. Without the concept of independence, the auditors are noted to lack both credibility and opinion. The nature of relationship that exists between a client and an auditor is by itself a threat to the concept of independence. Incidents of influencing the auditor reports on the financial position of clients have been noted to result due to conflict of interest. The possibilities of a conflict of interest existing between clients and firms are noted to exist. Various connections such as audit firms being associated with other firms, personal as well as family relationships, client's financial interests, employment with the audit firms as well as the provision of various non-audit services to the audit clients are noted to affect the independence of auditors. Strength in character is therefore necessary in order to enable the auditors to have…...

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Mautz, R.K., and H.A. Sharaf. (1961). The Philosophy of Auditing. American AccountingAssociation Monograph No. 6. Sarasota. FL: American Accounting Association

Louwers, T.J., Ramsay, R.J., Sinason, DH, Strawser, J.R., & Thibodeau, J.C. (2011).

Auditing and Assurance Services (4th ed.). New York, NY: McGraw-Hill Irwin."

During a routine investigation, one the actuaries discovers that there are some possible red flags for illegal activity. When they report these issues to their supervisors, they are told to not worry about that. What make this so troubling is auditors have an ethical duty, to protect the interests of their clients and the public. The problem is that they want to remain a part of the team. Yet, they also must ensure that they are not directly helping to enable fraudulent activities to occur. (Moyer, 2009, pg. 83)
In this particular case, the auditor is not completely independent from their clients. The best way to deal with these kinds of situations is, to bring these red flags to the attention of upper management inside the accounting firm. If there is no satisfactory response, the individual has an obligation to let regulators and the general public know about what is…...

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References

Keuppers, R. (2010). How and Why Independent Audits Matter. International Journal of Disclosure and Governance, 7, 286 -- 293.

Knapp, M. (2012). Contemporary Auditing. Mason, OH: South-Western.

Markham, J. (2005). Financial History of Modern Corporate Scandals. Armonk, NY: Sharpe

Moyer, C. (2009). Contemporary Financial Management. Mason, OH: South-Western

Any threats to independence of the client can be determined on whether threats are created by past services from the client or business relationships before the audit engagement.
Importance of Independence of Auditor and Client:

During financial statement engagements, the independence of auditors and clients is important because of the following reasons & #8230;

Lesser Inappropriateness:

The closer the relationship between an auditor and his/her client is the higher the probability and perception of inappropriateness. Through an examination of various studies and the wider implications of such relationship, the independence between auditor and client is the most effective way of lessening inappropriateness. This is primarily because such independence promotes and sustains integrity during the financial statement audit engagements.

Promotion of eliability:

The main goal of independence between auditor and client during audit engagements is to promote reliability through providing an independent and objective view of the financial statements. The independence of the auditor assists in…...

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References:

Greene, H.E. Accounting News: Auditor Independence. Retrieved from Federal Deposit

Insurance Corporation website:  http://www.fdic.gov/regulations/examinations/supervisory/insights/siwin06/accounting_news.html 

Lindberg, D.L. & Beck, F.D. (2002, November). CPAs' Perceptions of Auditor Independence:

An Analysis of Views Before and After the Collapse of Enron. Retrieved May 18, 2012, from  http://aaahq.org/audit/midyear/03midyear/papers/AuditorIndep-paper1-AuditingSection.isu.pdf

Management v. Auditors Responsibility
Responsibilities of Management and Auditors & the Public Perception series of high-profile business melt-downs in 2001, led by the Enron scandal have put the roles and responsibilities of the corporate management and the auditors in sharp focus. The public outcry against the necessity of preventing such crises in future has led to stricter regulation and extensive debate about the responsibilities of the management and the auditors. In this paper I shall explain the management's role and responsibilities verses the auditors' and also discuss how the public's perception of the auditor's duties have differed over time from that of the profession's.

The Management's Responsibilities

The management is responsible for formulating policies in an organization for efficient utilization of resources, setting goals, and providing the necessary resources, leadership and direction for achieving the goals. The ultimate objective of the management in a for-profit organization is to maximize the share-holder's value while…...

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Works Cited

Colson, Robert H. "CPA Journal Education Forum Anticipates Future." The CPA Journal. 72: 8. (2002): 20+.

Gibson, Kim M. And Arleen R. Thomas. "Management is responsible, too; practical advice to help corporations prevent detect and deter fraud." Journal of Accountancy. 195: 4. (2003): 53+.

Locatelli, Mary. "Good Internal Controls and Auditor Independence." The CPA Journal. 72: 10. (2002):12+.

Telberg, Rick. "Happy New Year! Yes, It Really Could Be." At Large Column. December 29, 2003 The AICPA Website. March 9, 2004  https://www.cpa2biz.com/News/Telberg/Happy+New.htm

This is because auditors have a high amount of expertise in analyzing financial statements, with particular focus on being able to determine when fraud has potentially taken place. The forensic accounting capabilities of auditors are then put to work, to ensure that fraud has not taken place. The participants in free markets benefit from this work because it reduces the risk associated with their investments. Over time, this reduced risk will encourage more money into the markets, as the markets are viewed as a safe place for capital.
Recent developments have resulted in the role of the auditor evolving. The Center for Audit Quality (n.d.) has noted that where auditors used to basically have a "pass-fail" orientation to financial statements, this is now the bare minimum and a higher standard of care is to be taken in auditing reports. Auditors have become involved in creating annual reports that meet the…...

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Works Cited:

Center for Audit Quality (no date). Observations on the evolving role of the auditor. Center for Audit Quality. Retrieved June 30, 2012 from http://www.thecaq.org/publications/EvolvingRoleoftheAuditor.pdf

Johnson, S. (2010). What is the auditor's role in finding fraud? CFO Magazine. Retrieved June 30, 2012 from  http://www.cfo.com/article.cfm/14490470/

Such accounting is accounting from a purely realistic and numerical perspective, having nothing to do with what those numbers would signify in the context of life within the larger society.
All accountants must swear by a strict code of ethics, yet auditors have a unique experience which places them in an even more sensitive position, calling for even more attention to ethical accounting behavior. Auditors have to deal with laboriously examining the financial records of a particular individual or organization. Often times, the auditor may already come with a bias, because there is a need for an audit based on some financial misgiving or mistake on a tax report or other important financial document. Still, it is the ethical responsibility of the auditor to remain objective and provide an unbiased service that allows for the proper examination and evaluation of financial duties and responsibilities without placing individuals or organizations under…...

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References

El-Moukammal, Hisham. (2009). Auditors' code of ethics. The Certified Accountant. Web.  http://www.lacpa.org.lb/Includes/Images/Docs/TC/TC404.pdf

auditing comes with immense responsibility as it plays a vital role in maintaining a check and balance and establishes an organization's credibility and repute among its stakeholder. An auditor's report is a key document that most stakeholders use when taking decisions pertaining to an organization. For this it is important for auditors to show highest levels of compliance with ethics.
Auditors and Ethics

Audit and Ethics have a very deep relationship as one goes with another. Financial audit of clients needs to be ethical and it is an area of major concern as these companies hold the public stake. The base of ethical auditing is independence and beneath it lies the principles of honesty, professional diligence and due care, integrity and confidentiality. The basic part of ethical auditing which is independence focuses on the auditor's strict adherence to the maintenance of independence from having a financial interest in its clients. The…...

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References

Hall, W.D., & Renner, A.J. (1991). Lessons Auditors Ignore at Their Own Risk. Journal of Accountancy, 171(6), 63+.

United States. I feel that auditors should be held to the highest standards and any implication of illegal behavior should be punishable under law.
Supreme Court aside, Congress has done much within Sarbanes-Oxley to address the legal ramifications concerning auditor misrepresentation. The principles regarding the elimination of conflict of interest remove one of the most significant motivations for the commission of fraud. I feel that overall, the legal framework for prosecution is strong. I do, however, feel that the industry should hold itself to a higher standard. The PCAOB can make life difficult for auditing firms, and this acts as a means of control, but surely an auditor willing to commit fraud will not be discouraged. Even the threat of being removed from the profession may not suffice.

There needs, in my opinion, to be a comprehensive degree of legal recourse. This should include but not be limited to civil suits,…...

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Works Cited:

Hasnas, J. (2005). The significant meaninglessness of Arthur Andersen v. United States. Cato Supreme Court Review. Retrieved April 29, 2010 from http://faculty.msb.edu/hasnasj/GTWebSite/AndersenDraft.pdf

internal auditor, the external auditor and the CFO. The essay also reviews their respective responsibilities, inherent conflicts between them and ethical considerations for each. Finally the essay reviews the treatment of balance sheet items from the perspective of each position.
The internal auditor typically reports to the CFO and is responsible for reviewing work done by fellow employees, checking for errors, oversights and irregularities. The standard method used to conduct an audit involves examining a transaction or process and comparing how it was done with the way it is documented in an operating procedure or accounting convention, then reporting to management on any differences. The internal auditor may use a number of methods or tools to capture information, sometimes even designing or adapting an existing tool to track the information being reviewed (Blackburn, 2011).

Information presented in the internal auditor's report is vital to management's ability to run a successful business.…...

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Works Cited

Blackburn, V. (2011). What does an internal auditor do? Conjecture Corporation. Retrieved July 5, 2011 from  http://www.wisegeek.com/what-does-an-internal-auditor-do.htm 

Damewood, C.L. (2011). What does an external auditor do? Conjecture Corporation. Retrieved July 5, 2011 from  http://www.wisegeek.com/what-does-an-external-auditor-do.htm 

Institute of Internal Auditors. 2010. How do internal and external auditors differ and how should they relate? Retrieved July 5, 2011 from http://www.theiia.org/theiia/about-the-profession/internal-audit-faqs/?i=1086

Investopedia. (2011). What does a Chief Financial Officer (CFO) do? Retrieved July 5, 2011 from  http://www.investopedia.com/ask/answers/04/042204.asp

IT Fraud
Evaluate the factors that add to corporate fraud

The business fraud can be credited to conditions emerging from deceptive monetary reporting and misappropriation of possessions. These conditions are 3 and all 3 features of the fraud triangle have to exist for fraud to take place. Management or staff members have to have the reward or pressure to dedicate fraud, see the opportunity emerge and have the ability to justify the occasion.

Incentive/Pressure

Management or perhaps others in the workforce will have benefits or conditions of pressure to carry out fraud. If the choice is made by management to publish illegal monetary statements, the most typical reason for this will be threat by financial, market or entity operating conditions to the monetary security and productivity of the business. Extreme pressure is put on management to satisfy the projection made by industry experts, internal company projections or to pay back loans (Fox School of…...

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References

ISACA, 2011. COBIT Framework for IT Governance and Control. Retrieved from  http://www.isaca.org/Knowledge-Center/COBIT/Pages/Overview.aspx 

Louwers, T., Ramsay, R., Sinason, D., & Strawser, J. (2007). Auditing & Assurance Services: A Look Beneath the Surface. (2nd ed.). New York, New York: McGraw-Hill/Irwin.

Temple University. "Auditing ACCT 3596." Fox School of Business. 13th Ed. United States of America: Pearson, 2009. Print.

Wells, Joseph T. Corporate Fraud Handbook: Prevention and Detection. Hoboken, NJ: John Wiley & Sons, 2007. Print.

large organizations, the existence and effectiveness of its internal audit function comes into question. Not only the internal audit department should exist but it shall work effectively. An effective internal audit department can serve as the backbone of an organization's success. The International Accounting Standards oard (IAS) keeps on revising its standards to make sure that external and internal auditors of an organization carry out their duties effectively. The board recently revised the Internal auditing standard that serves the purpose of assisting the external auditor's in using the work of the internal auditors. Though external auditors are mainly concerned with auditing company's financial statements but lack of time and in some cases lack of resources raises a question as to their audit quality. In order to ensure that external audit is carried out effectively, the IAAS realized the importance of internal audit and how can the internal audit be…...

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Brown, P 1983 'Independent Auditor Judgment in the Evaluation of Internal Audit Functions', Journal of Accounting Research, Vol. 21, no. 2, pp. 444 -- 455.

Adams, M 1994 'Agency Theory and the Internal Audit', Managerial Auditing Journal, Vol. 9 no. 8, pp.8 -- 12.

Nagy, A 2002, 'An assessment of the newly defined internal audit function', Managerial Auditing Journal, Vol. 17 no. 3, pp.130 -- 137.

Accounting (Auditing)
The information that an auditor gathers as he runs analytical procedures in an entity he is auditing and as he gets better acquainted with the organization must be enough in determining materiality and assessing risks. Materiality is very important especially in helping the auditor determine what kind of audit report to be given. The auditor has to make reference to two key issues as regards what areas the financial audit covered. This helps in highlighting risk and materiality. These issues are: the limitation of the liability of the auditor to the significant information given to him and established by him by way of the materiality parameters he has established given his professional capacity and reasoning and his supplying an assurance that is not absolute but reasonable as pertaining to the financial statements' accuracy. The materiality is relative. A given figure or value may be viewed as material in one…...

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References

Arenes, L. (2003) Audit. An Integrated Approach,, Eight Edition, ARC Publishing,

Downes, F., 1996.Business Finance. [Online] Available at:   29 November 2014].http://businessfinancemag.com/planning-budgeting-amp-reporting/seizing-control-annual-audit [Accessed

Joldos, A.M., Stanciu, I.C. & Grejdan, G., 2010. Pillars of the Audit Activity: Materiality and Audit Risk. Annals of the University of Petro-ani, Economics, 10(2), pp. 225-238.

Oprean, I.; Popa, I.E.; Lenghel, R.D. (2007) Audit and Financial Control Procedures, Risoprint Publishing, ClujNapoca

People are diverse learners in various ways. Here are a few examples:

1. Learning Styles: Individuals have different preferred learning styles, such as visual, auditory, or kinesthetic. Visual learners learn best through pictures, diagrams, and visual aids, while auditory learners grasp information better through listening and speaking. Kinesthetic learners, on the other hand, learn best through physical activities and hands-on experiences.

2. Sensory Preferences: People have different sensory preferences and sensitivities. Some may have a heightened sense of touch, taste, smell, sight, or hearing, which may affect their learning. For instance, individuals who are visually impaired may need alternative methods, like Braille....

There are several ways to learn about student cognitive ability and learning styles. Here are some steps you can take to better understand and support your students:

1. Conduct assessments: Use standardized tests, informal assessments, and observations to gather information about students' cognitive abilities and learning styles.

2. Analyze data: Review assessment results to identify patterns and trends in students' learning strengths and weaknesses.

3. Engage with students: Get to know your students on a personal level and communicate with them about their learning preferences and challenges.

4. Utilize learning style inventories: Use tools like the VARK questionnaire or Honey and Mumford's Learning Styles....

The Anatomy of Fraud in Local Government: A Deeper Dive into the Anatomy of Corruption

Introduction:
Fraud in local government, a persistent and insidious problem, erodes trust and undermines the integrity of public institutions. This essay delves into the anatomy of fraud in this critical setting, exploring its multifaceted nature and proposing novel approaches to combat it.

1. The Anatomy of Fraud:

Types of Fraud:
Procurement fraud: Inflated bids, kickbacks, collusion
Financial statement fraud: Misreporting or concealing financial information
Payroll fraud: Unauthorized payments to fictitious or ineligible individuals
Motivations for Fraud:
Greed and personal enrichment
Pressure to meet financial targets
Lack of accountability....

1. The role of transparency and accountability in local government financial reporting
2. The impact of fiscal decentralization on local government accounting practices
3. Balancing fiscal responsibility and service delivery in local government budgets
4. The challenges of measuring efficiency and effectiveness in local government expenditures
5. The ethical considerations of financial decision-making in local government
6. The role of technology in improving local government financial management
7. The implications of political influence on local government accounting practices
8. The challenges of integrating sustainability goals into local government budgets
9. The importance of citizen engagement in local government financial decision-making
10.....