AU ‐C 240 Consideration of Fraud in a Financial Statement Audit

2021 ◽  
pp. 33-61
Keyword(s):  
Financial Statement ◽  
Financial Statement Audit

Fraud Detection and Investigation: Microcomputer Consulting Services

1999 ◽  
Vol 14 (1) ◽  
pp. 99-115 ◽  
Author(s):  
Bonita K. Peterson ◽  
Thomas H. Gibson
Keyword(s):  
Fraud Detection ◽  
Internal Controls ◽  
Financial Statement ◽  
Sufficient Evidence ◽  
Red Flags ◽  
Fine Line ◽  
Consulting Services ◽  
Financial Statement Audit ◽  
Audit Team ◽  
University Setting

This nonfictional case of inventory fraud in a university setting exposes students to fraud detection and investigation. These skills are becoming increasingly important for auditors, as evidenced by the alarming rate of fraud. The accounting profession has acknowledged the seriousness of this issue with the issuance of SAS No. 82, Consideration of Fraud in a Financial Statement Audit, developed in part to improve detection of frauds by auditors. The case raises many of the fraud-related issues faced by accountants: recognizing red flags indicative of fraud; the importance of a good system of internal controls; the profile of the typical fraud perpetrator; the fine line auditors walk when investigating a fraud; the need to develop an audit team with the appropriate level of expertise which may require members from a variety of disciplines (e.g., investigative, legal and forensic areas); and the difficulty of obtaining sufficient evidence to prosecute and convict perpetrators.

Ramm Wholesale: Reviewing Audit Work (Retracted)

2013 ◽  
Vol 28 (3) ◽  
pp. 629-636 ◽  
Author(s):  
Douglas Kalesnikoff ◽  
Fred Phillips
Keyword(s):  
Risk Assessment ◽  
Real Time ◽  
Read Aloud ◽  
Financial Statement ◽  
Financial Statement Audit ◽  
Audit Strategy

ABSTRACT: Designed to be used in an undergraduate or Master's auditing course, this Case asks students to evaluate work performed on the financial statement audit of a private wholesale merchandiser. Through this evaluation, students can uncover issues relating to gaining knowledge of a client and its environment, risk assessment, materiality, audit strategy, and specific audit procedures for the revenue/receivables/receipts accounting cycle. The Teaching Notes provide support both for instructors who ask students to prepare the Case in advance of class and for instructors who instead assign the Case for analysis in real-time during class, whereby the Case is read aloud paragraph-by-paragraph and issues are discussed as they are detected.

Can Auditors Mitigate Information Asymmetry in M&As? An Empirical Analysis of the Method of Payment in Belgian Transactions

2013 ◽  
Vol 33 (1) ◽  
pp. 57-91 ◽  
Author(s):  
Mathieu Luypaert ◽  
Tom Van Caneghem
Keyword(s):  
Information Asymmetry ◽  
Private Information ◽  
Regression Models ◽  
Financial Statements ◽  
Financial Statement ◽  
Firm Characteristics ◽  
Target Level ◽  
Financial Statement Audit ◽  
Method Of Payment ◽  
The Relationship

SUMMARY In this paper, we empirically examine the relationship between the external financial statement audit and the method of payment across a sample of Belgian mergers and acquisitions between listed and private firms over the period 1997–2009. We investigate whether a Big N audit (at the target level) reduces the need for a contingent payment resulting from information asymmetry about the target's value. In addition, we analyze whether a Big N audit (at the bidder level) limits incentives for bidders to exploit private information about their own value. Using multivariate ordered probit and binary regression models, we determine that contingent payments are less common when the target is audited by a Big N auditor after controlling for several other deal and firm characteristics. Furthermore, we find that the incentive to use stock payments in periods of stock market overvaluation is lower for acquirers with a Big N auditor. Finally, target shareholders are more likely to accept a contingent offer if the acquirer's financial statements are certified by a Big N auditor. JEL Classifications: G34; M4.

scholarly journals Exploring Changing Requirements of Financial Statement Audit Reports via a Morphogenetic Approach

2021 ◽  
Vol 15 (2) ◽  
pp. 38-55
Author(s):  
Ying Deng ◽  
Graham Bowrey ◽  
Greg Jones
Keyword(s):  
Financial Statement ◽  
Public Accounting ◽  
Accounting Firms ◽  
The Public ◽  
Financial Statement Audit ◽  
Audit Regulation ◽  
Financial Audit ◽  
Proposed Regulation ◽  
Audit Reports ◽  
The Impact

There has been an ongoing concern with the quality of financial audit reports issued by registered public accounting firms in relation to financial accountability and transparency of the financial statements. In July 2009 the Public Accounting Oversight Board (PCAOB) released a concept paper outlining changes to the requirements of financial audit activities such as the inclusion of the engagement partner’s signature on the financial audit reports. The aim of these new requirements was to improve the accountability of engagement partners as well as enhance the perception of transparency of the audit reports. However, the contribution and effectiveness of these requirements to improve accountability and transparency of audit reports for various stakeholders relying on the audited financial information is questionable. This study explores the impact and effectiveness of changes to auditing regulation and processes through the application of Archer’s (1995) morphogenetic approach which is based on social conditioning, social interaction, and social elaboration where the structural influences provides the environment for agents to differentiate themselves. In addition, this study demonstrates how proposed regulation changes mould the qualities of audit regulation, the profession and the auditor whose perspectives deserved to be noticed from the dominant constituencies structured by the propositions of a morphogenetic analysis.

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