COSO 2013: Aligning Internal Controls and Principles

2016 ◽  
Vol 32 (3) ◽  
pp. 117-127 ◽  
Author(s):  
Denise Dickins ◽  
Rebecca G. Fay
Keyword(s):  
Critical Thinking ◽  
Financial Reporting ◽  
Internal Control ◽  
Financial Statements ◽  
Thinking Skills ◽  
Securities And Exchange Commission ◽  
Internal Controls ◽  
Critical Thinking Skills ◽  
Reading Assignment

ABSTRACT Strong systems of internal control over financial reporting (ICFR) are critical to the production of reliable financial statements. Securities and Exchange Commission (SEC) regulations require that companies design, maintain, and regularly evaluate their systems of ICFR, and Auditing Standard No. 5 requires that auditors evaluate companies' systems of ICFR. Therefore, it is necessary for accountants to be able to (1) describe and classify internal controls and (2) determine deficiencies in internal control. Recent reports suggest that accountants may lack sufficient training and guidance in these respects (e.g., Rapoport 2012). This activity provides an opportunity for students to practice these skills while learning more about the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) 2013 Framework. Provided are a summary discussion of ICFR and the COSO 2013 Framework, an outside-of-class reading assignment, and an activity that requires students (independently or in groups, either in or outside of class) to employ critical-thinking skills to: (1) classify (i.e., map) a listing of controls as being aligned with one (or more) of the COSO 2013 Framework's five components and 17 principles that comprise a well-designed system of internal control, and (2) identify any deficiencies (gaps) in design due to missing or inadequate internal controls.

Second Round Electronics: A Case for Critical Thinking

2013 ◽  
Vol 28 (4) ◽  
pp. 983-989 ◽  
Author(s):  
Nathalie Johnstone ◽  
Brandy Mackintosh ◽  
Fred Phillips
Keyword(s):  
Critical Thinking ◽  
Financial Reporting ◽  
Emerging Technologies ◽  
Financial Statements ◽  
Thinking Skills ◽  
Critical Thinking Skills ◽  
Financial Accounting ◽  
Class Discussion ◽  
For Profit ◽  
Writing Assignment

ABSTRACT This instructional case requires students to provide advice to a client who is currently the sole owner of a for-profit company that reconditions and sells used electronics. The client is considering purchasing a similar company with the vision of expanding into the sales and service of emerging technologies. The target company's unaudited financial statements contain questionable accounting choices and judgments that appear to enable the company to meet external financial reporting constraints. In their role as financial advisers, students are expected to use critical thinking skills to identify and evaluate questionable choices in the target company's financial statements. This case is suitable for use in introductory and intermediate financial accounting as well as introductory auditing and assurance courses, and can be used as a context for in-class discussion, as a basis for exam questions, and/or as a writing assignment. Assessment rubrics and Teaching Notes accompany the case for use by instructors.

How Adjusting Entries Affect the Quality of Financial Reporting: The Case of Frosty Co.

2012 ◽  
Vol 27 (2) ◽  
pp. 493-524 ◽  
Author(s):  
Jason C. Porter
Keyword(s):  
Financial Reporting ◽  
Stock Price ◽  
Financial Statements ◽  
Thinking Skills ◽  
Critical Thinking Skills ◽  
Financial Accounting ◽  
Accounting Students ◽  
Financial Position ◽  
Accounting Scandals ◽  
Accounting Courses

ABSTRACT Recent accounting scandals have emphasized the need to think beyond debits and credits. Accounting students must understand the effects of transactions on a company's financial position, as well as the pressures and incentives they will someday face to misrepresent that position. This case introduces students in intermediate financial accounting courses to both of these important objectives. First, the case improves students' critical thinking skills in accounting by allowing them to determine if various correcting entries should be made, and what the effects of those transactions will be on the company's financial statements. Second, the case improves students' ability to evaluate ethical consequences by introducing them to conflicting incentives regarding those corrections: the obligation to provide investors with high-quality financial statements that fairly present the company's financial position versus the pressure to maintain a high stock price for investors. The case may be completed using either U.S. GAAP or IFRS.

Section 404 Compliance and Financial Reporting Quality

2010 ◽  
Vol 24 (3) ◽  
pp. 441-454 ◽  
Author(s):  
Albert L. Nagy
Keyword(s):  
Financial Reporting ◽  
Internal Control ◽  
Reporting Quality ◽  
Financial Statements ◽  
Securities And Exchange Commission ◽  
Small Companies ◽  
Section 404 ◽  
Financial Reports ◽  
Sarbanes Oxley

SYNOPSIS: This study examines whether the Sarbanes-Oxley Act Section 404 (S404) compliance efforts lead to higher quality financial reports. An objective of S404 is to encourage companies to devote adequate resources and attention to their internal control systems, which should lead to more reliable financial statements. A natural laboratory of S404 compliance and noncompliance companies exists because the Securities and Exchange Commission has deferred the S404 compliance date for small companies (nonaccelerated filers). A logistic regression model is estimated using a sample of companies surrounding the S404 compliance threshold to measure the S404 compliance effect on the likelihood of issuing materially misstated financial statements. The results show a significant and negative relation between S404 compliance and issuance of materially misstated financial statements, and suggest that the S404 regulation is meeting its objective of improving the quality of financial reports.

Evaluating Financial Results at Graphic Apparel Corporation (GAC): The Impact of Accounting Policies

2014 ◽  
Vol 30 (1) ◽  
pp. 1-12
Author(s):  
Fred Phillips
Keyword(s):  
Critical Thinking ◽  
Financial Reporting ◽  
Thinking Skills ◽  
Critical Thinking Skills ◽  
Financial Accounting ◽  
Financial Statement ◽  
Reporting Practices ◽  
Accounting Courses ◽  
The Impact

ABSTRACT This case requires students to evaluate financial reporting practices adopted by a small apparel company. The company's owner/manager has recently taken the business in a new direction, and is asking for help in determining whether the company's existing financial accounting policies continue to be appropriate and how alternative policies would affect the reported financial results. This case will require students to apply knowledge of financial accounting and financial statement ratios to judge the appropriateness of selected accounting policies. This case is designed for use in introductory and intermediate financial accounting courses that aim to develop students' critical thinking skills.

Wiki Art Gallery, Inc.: A Case for Critical Thinking

2011 ◽  
Vol 26 (3) ◽  
pp. 593-608 ◽  
Author(s):  
Fred Phillips ◽  
Brandy Mackintosh
Keyword(s):  
Critical Thinking ◽  
Financial Performance ◽  
Financial Statements ◽  
Thinking Skills ◽  
Critical Thinking Skills ◽  
Financial Accounting ◽  
Art Gallery ◽  
For Profit ◽  
Accounting Choices

ABSTRACT This instructional case requires students to provide advice to a client who is currently a co-owner of a for-profit art gallery. The client is planning to purchase his co-owner's shares at a price to be determined based on their company's recent financial performance. The company's financial statements, prepared by the client's co-owner, contain accounting choices and judgments that students should identify and evaluate using critical thinking skills. This case is suitable for use in introductory and intermediate financial accounting, and in introductory auditing and assurance courses. Accompanying the case is a set of teaching notes and assessment rubrics for use by instructors.

Relating Operational and Financial Factors to Assess Risk and Identify Fraud in an Operational Setting

2011 ◽  
Vol 26 (2) ◽  
pp. 361-376 ◽  
Author(s):  
Richard H Gifford ◽  
Harry Howe
Keyword(s):  
Critical Thinking ◽  
Financial Reporting ◽  
Current Literature ◽  
Internal Control ◽  
Internal Controls ◽  
Financial Factors ◽  
Analytical Skills ◽  
Auditing Standards ◽  
Operational Factors ◽  
The Relationship

ABSTRACT The current literature and Statement on Auditing Standards (SAS) 99 emphasize the importance of relating operational factors to financial factors when evaluating the risk of fraud. The following case is based on an actual company and demonstrates how an understanding of the relationship between operational factors and financial reporting can aid an auditor in assessing risk and identifying fraud. The case also gives students an opportunity to directly evaluate internal control in an operational setting. The case is intended to strengthen students' critical thinking and analytical skills and to give them exposure to the importance of internal controls in an operational setting.

The Severity of Internal Controls over Financial Reporting Deficiencies: Differences among Types and Industries

2014 ◽  
pp. 55-77
Author(s):  
Tatiana Mazza ◽  
Stefano Azzali
Keyword(s):  
Information Technology ◽  
Financial Reporting ◽  
Internal Control ◽  
Service Industry ◽  
Listed Companies ◽  
Internal Controls ◽  
Service Companies ◽  
Finance Industry ◽  
Material Weaknesses ◽  
Fixed Assets

This study analyzes the severity of Internal Control over Financial Reporting deficiencies (Deficiencies, Significant Deficiencies and Material Weaknesses) in a sample of Italian listed companies, in the period 2007- 2012. Using proprietary data the severity of the deficiencies is tested for account-specific, entity level and information technology controls and for industries (manufacturing and services vs finance industries). The results on ICD severity is compared with one of the most frequent ICD (Acc_Period End/Accounting Policies): for account-specific, ICD in revenues, purchase, fixed assets and intangible, loans and insurance are more severe while ICD in Inventory are less severe. Differences in ICD severity have been found in the characteristic account: ICD in loan and insurance for finance industry and ICD in revenue, purchase for manufacturing and service industry are more severe. Finally, we found that ICD in entity level and information technology controls are less severe than account specific ICD in all industries. However, the results on entity level and information technology deficiencies could also mean that the importance of these types of control are under-evaluated by the manufacturing and service companies.

PERBEDAAN PENINGKATAN KETERAMPILAN BERPIKIR KRITIS SISWA PADA MATERI TERMOKIMIA MELALUI PEMBELAJARAN GROUP DAN INDIVIDUAL PROBLEM SOLVING

2017 ◽  
Vol 9 (2) ◽  
pp. 99
Author(s):  
St Fatimah Azzahra
Keyword(s):  
Critical Thinking ◽  
Problem Solving ◽  
Thinking Skills ◽  
Critical Thinking Skills ◽  
Control Group ◽  
Learning Problem ◽  
Group Problem ◽  
Control Group Design ◽  
Group Design ◽  
Group Problem Solving

ABSTRACTThis research is aimed to know the differences increase critical thinking skills through learning group and individual problem solving in thermochemical material. This research uses a quasi-experimental design with nonequivalent control group design and study sample consisted of 103 students, divided into the first experimental (group problem solving) (35 students), the two group experimental (individual problem solving) (34 students). The collected through pretest-posttest. The analyzed with the Kruskal Wallis test, the results showed that the learning problem solving as a group or individually can improve students’ critical thinking skills. Statistical test there are significant differences in the students critical thinking skills thermochemical material between students who received group and individual problem solving. Critical thinking skills improvement with problem solving individual learning higher compared with group learning problem solving.Keywords: problem solving learning, critical thinking skillsABSTRAKPenelitian ini bertujuan untuk mengetahui perbedaan peningkatan keterampilan berpikir kritis siswa melalui pembelajaran group dan individual problem solving pada materi termokimia. Penelitian ini menggunakan metode quasi experimen dengan desain Nonequivalent Control Group Design dan sampel penelitian ini terdiri dari 103 siswa yang terbagi ke dalam kelompok eksperimen pertama (pembelajaran group problem solving) (35 siswa), kelompok eksperimen kedua (pembelajaran individual problem solving) (34 siswa).Pengumpulan data dilakukan melalui pretest-posttest. Data dianalisis dengan uji Kruskal Wallis Test, hasil penelitian menunjukkan bahwa pembelajaran problem solving secara group maupun secara individual dapat meningkatkan keterampilan berpikir kritis siswa. Data uji statistik, terdapat perbedaan yang signifikan keterampilan berpikir kritis siswa pada materi termokimia antara siswa yang mendapat pembelajaran group problem solving dan individual problem solving. Peningkatan keterampilan berpikir kritis dengan pembelajaran individual problem solving lebih tinggi dibandingkan dengan pembelajaran group problem solving.Kata Kunci: Pembelajaran Problem Solving, Keterampilan Berpikir Kritis

UPAYA MENINGKATKAN KOMPETENSI GURU SMP DALAM MENYUSUN TES HASIL BELAJAR BERBASIS KETERAMPILAN BERPIKIR KRITIS MELALUI SUPERVISI AKADEMIK

2019 ◽  
Vol 3 (4) ◽  
pp. 772
Author(s):  
Leni Suryani
Keyword(s):  
Critical Thinking ◽  
Data Collection ◽  
Learning Outcomes ◽  
Student Learning Outcomes ◽  
Thinking Skills ◽  
Critical Thinking Skills ◽  
Teacher Competence ◽  
Collection Data ◽  
High Level ◽  
Teacher Data

This research is motivated by the competence of teachers in preparing poor learning outcomes tests and has not been able to measure high-level thinking skills, especially critical thinking skills. Therefore the researcher seeks to improve teacher competence in compiling tests on student learning outcomes based on critical thinking skills through academic supervision. This study uses a school action research design that has stages of planning, implementation, observation, and reflection. This research was conducted for 2 months starting April 9 to May 17, 2019 for Physics teachers in the 7 target schools. Data is sourced from interviews with teachers and test documents prepared by the teacher. Data collection techniques include observation, interviews and documentation. Data analysis through the stages of data collection, data simplification, data presentation, conclusion drawing. Data were analyzed using assessment rubrics adjusted to indicators of critical thinking skills. The results of this study conclude that teacher competence in preparing tests of learning outcomes based on critical thinking skills has increased from the first cycle with a percentage of 61% with sufficient categories to 76% with good categories in cycle II.

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