Create a 5 to 6 slides with detailed speaker notes
based the team scenario assignments from Weeks 3 and 4 (which I haved attached with my corresponding parts for those weeks)
include in one of the slides a
summary on Report on Internal Controls, COSO and SOX).
Scenario assignment- Please follow the detailed instructions
0 Week 3: General Electric Report ACC/491 June 26, 2017 Section 1 Introduction General Electric has very aggressive competition through changing technology where they continue to do researching and development. They are affected by world economies and the instability in commodity prices, price of oil, and foreign currency volatility. Some factors that may affect General Electric’s business is the quality and efficiency in the product development department, research and development expenditures, and the regulatory standards of their products (United States Securities and Exchange Commission, 2016). Do to the size and global market of General Electric, it could take them at least three months to do a proper audit. One month for planning, one month for fieldwork, and one month for the audit report. Section 3 Materiality During the audit process, auditors have the main goal of finding out whether the financial statements of a company that has been prepared are right and consistent with the reporting framework. However, the financial entry, their reasons for creating their financial statements is totally different from that (Burke, 2015). Therefore, materiality refers to that the amounts audited and quantified are not just figures that add up but rather have a significant and right effect under various contexts applicable to the financial institution. The auditor determines the level of materiality be achieved. This is regarding the types of testing as well as the financial statements prepared. Misstatement A misstatement of audits takes place when the results of the audit process show that the relevant financial reporting frameworks were not adhered to. When the auditor sets down to conduct an audit, there are inherent risks due to human errors or errors of omission. The misstatement also occurs when the auditor gives an opinion is deemed inappropriate or unfit in regards to the financial statements at hand (Chandler, 2016). Audit Risk Audit statements that are made during the auditing process by auditors usually have a clause declaring that the reports have been crosschecked and are free from any material misstatements. However, the audit risk appears where there are misstatements suspected or identified in the reports even after the reports have been declared free from any misstatements. The audit risk can be categorized into two (Chan & Kogan, 2016). The first category is a risk of material misstatement while the second is the detection risk. Audit Risk Model The audit risk model is used to establish the entire amount of risk that was incurred during the auditing process. Further, the model goes ahead to offer management solutions regarding the type of risk established and the magnitude and nature of the risk (Chandler, 2016). The total audit risk is arrived at as being the total product of control risk, detection risk and inherent risk which are the major components of the audit risk model. If the risk identified is too high, the auditors must put in measures to restore the risk to the most acceptable level. Inherent Risk Inherent risk is one of the three components of the audit risk model. The other two components of the audit risk model include the control risk and the detection risk. Inherent risk occurs when the auditing process is characterized by very complex accounting and financial transactions (Chan & Kogan, 2016). It results from errors of omission from factors that are difficult to control. To mitigate the risk, it is recommended that qualified and experienced auditors be involved in the process. Relationship of Risk to Audit Evidence Evidence during the auditing process is necessary to be gathered and collected to mitigate the risks inherent in the process. The evidence is used to support their statements in the audit reports and minimize the risk of misstatements. The auditors are required to gather their evidence from material financial statements in the organizations and have the evidence certified by the management (Chandler, 2016). The evidence is required to be part of the audit process documentation. Therefore, the relationship that exists between risk and audit evidence is that risk evidence minimizes and mitigates audit risk. Conclusion Overall, the auditing of General Electric will require some time as it is a global company dealing with multiple economies. Analytical procedures can help limit these risks and help General Electric make better future decisions. Additionally, understanding the different terms and tests that come with auditing will enable them to identify different misstatements that may occur on their financial statements. References Accounting. (2017). Return on common stockholders’ equity ratio. Retrieved from http://www.accountingformanagement.org/return-on-common-stockholders-equity-ratio/ Arens, Elder & Beasley (2014). Auditing and Assurance Services, 15/E. Prentice Hall. Burke, A. (2015). Introduction to Audit Planning Certified Public Accountant. Retrieved from http://www.cpaireland.ie/docs/default-source/Students/Study-Support/P1-Auditing/introduction-to-audit-planning.pdf?sfvrsn=0 Chan, D. Y., & Kogan, A. (2016). Introduction to using Analytics in Auditing. Journal of Emerging Technologies in Accounting, 13(1), 121-140. Retrieved from http://aaajournals.org/doi/abs/10.2308/jeta-51463?code=aaan-site Chandler, R. (2016). Auditing and assurance: University of London. Retrieved from http://www.londoninternational.ac.uk/sites/default/files/programme_resources/lse/lse_pdf/subject_guides/ac3093_ch1-4.pdf My Accounting Course. (2017). Return on assets ratio. Retrieved from http:////www.myaccountingcourse.com/financial-ratios/return-on-assets UNITED STATES SECURITIES AND EXCHANGE COMMISSION-Emerson. (2016). Form 10-K. Retrieved from http://www.emerson.com/documents/corporate/180344.pdf United States Securities and Exchange Commission. (2016). Form 10-K. Retrieved from http://www.ge.com/ar2016/assets/pdf/GE_2016_Form_10K_SummaryAndFull.pdf
Scenario assignment- Please follow the detailed instructions
5 Cheat Sheet on Evidence and Documentation ACC/491 July 3, 2017 Cheat Sheet on Evidence and Documentation Relevance, Reliability and Sufficiency of Evidence The basic property of an audit report is that it should entail relevance. The report t should be written in a standard format which is usually mandated by generally accepting the set auditing standards. Accounting is an important task since it ensures financial details of a business are kept considerably clean. Going through the terminologies in order to know everything that is involved in auditing is important when auditing the financial records. The first step involves dividing the field into the foremost part known as the financial statement. Soares (1997). All businesses hold their financial statements in high regards since it is a legal requirement to provide and they provide them when they are requested by relevant bodies. These statements represent the picture of the business in reference to its financial robustness. The audited report reports are used to verify that the details given in their statements. For instance, the public corporations are supposed to ensure that their statements are professionally audited in order to secure their investors’ wealth. It is important to note that the concept of reliability is of real interest to a wide variety of audit participants. This is due to many quotations and references that are required for well-founded financial information and the role of audit. It has been said that having a genuine financial and economic data should be the principle assumptions of a society. Being reliable increases confidence in and reliance on financial statements. Some of the aspects of reliability include faithful representation, fitness for purpose, robustness as well as the audit firm reliability. The quantity of audit evidence is in simple words what sufficiency of audit evidence means. The risk of material and the inclusive quality of the evidence presented is what needs to be considered to fulfill the sufficiency needed. One should rely on an eloquent order other than the convincing one. Yang (2007). Impressive evidence shows the scale one way or the other and provides one with a basis beyond a sensible doubt for forming a viewpoint (Loughran, Maire, 2011). Convincing evidence is one which is perfectly reliable. It involves looking for all clients’ records in order to achieve this level of assertion. Careful documentation of the work and the audit opinion must be fact-based and should be retractable so that a different review of the audit should depict the same conclusion (Loughran, Maire, 2011). Confidentiality: Financial statements should be handled with confidentiality. Confidential information should not be disclosed to anyone. The accountant must protect the information from unauthorized disclosure or public release. The auditor should be accountable for any access by unauthorized people. In most times, clients see the auditors as trusted advisors. An audit document should be held in an electronic or paper format for keeping audit records. This is characterized by exceptions. The application of these policies and procedures is the use of Teammates. The auditor is supposed to respect and ensure the confidentiality of information acquired and he should not disclose this information to anyone without authority from the authority. This is usually stated in the constitution. Conclusion The main goal of this cheat sheet is to obtain fair-minded assurance as to whether the financial statements are free from material inaccuracy. This is to ensure that the auditor can express an opinion on the financial statements and report accordingly in the auditor’s report. The main duty of an auditor is to obtain and evaluate the audit proof. This is usually undertaking from audit procedures carried out during the auditing process. References ACCA. (2011). Legal ownership of, and rights of access to, books. Retrieved from http://www.accaglobal.com/content/dam/acca/global/PDF-members/2012/2012l/Legal_ownership.pdf Arens, Elder, & Beasley (2014). Auditing and Assurance Services, 15/E. Prentice Hall. CPlusglobal. (2014). monetary unit sampling. Retrieved from http://cplusglobal.wordpress.com/2014/04/15/monetary-unit-sampling-mus/ Hall, T. W., Higson, A. W., Pierce, B. J., Price, K. H., & Skousen, C. J. (2013). Current Issues in Audit Sampling: Haphazard Sampling: Selection Biases and. American Accounting Association, 7(2), 16-22. Retrieved from http://aaajournals.org/doi/pdf/10.2308/ciia-50568?code=aaan-site Loughran, M. (2010) Collecting and Documenting Audit Evidence, in Auditing for Dummies®, Wiley Publishing, Inc., Hoboken, NJ, USA. doi: 10.1002/9781118269268.ch6 Soares, C. (1997). Advances in safety and reliability: proceedings of the ESREL’97, international conference on safety and reliability, 17-20 June 1997, Lisbon, Portugal. Oxford, England New York: Pergamon. Yang, G. (2007). Lifecycle reliability engineering. Hoboken, N.J: Wiley.