Accounting and Finance Discussion Questions - 825 Words

Accounting and Finance: Discussion Questions (Other (Not Listed) Sample) Content: Accounting and Finance: Discussion QuestionsNameInstitutionAccounting and Finance: Discussion Questions1. What is a casebook system and what are the benefits of preparing a casebook?A casebook system entails a collection of insights of how to detect financial frauds (Silverstone, 2012). It provides the hallmark under which to base ones decision when confronted with financial issues with legal significance. The major benefit of the system is that it makes it easier for auditors to detect frauds, thus protecting them from legal claims for failing to detect frauds. It also benefits auditors by providing them with the practical guidance on how to manage their professional challenges and duties, this way saving more time, which enhances efficiency in their work. It warns against professional negligence fostering professionalism and integrity in auditing (Silverstone, 2012). By embracing casebook system, accountancy practitioners are able to be trusted owing to their relia ble and credible professional roles in detecting financial frauds and ensuring maintenance of correct books of accounts. 2. How can a strong investigation save effort in testimony that may occur later?The main objective of an investigation in a company is to acquire the most reliable facts that can be used to solve a complaint or some impeding challenges (Thompson, 2007). Such investigated facts may be of great assistance in solving a future problem especially when solving a legal issue arising out of companys operations. In such cases, court attorneys or jury may require an auditor to provide evidence of the investigation done on the matter. A demonstration of strong investigation would enhance the reliability and credibility of the facts acquired and in this way, witnesses may be saved from intimidation through confronting interrogations aimed at leading towards a specific outcome (Thompson, 2007). With an evidence of a strong investigation, testimonies will only be a matter of clarification to the facts acquired rather than new interrogation that may seem to be another investigation. 3. What must a CPA do when reporting on the application of accounting principles?When reporting on the application of accounting principles, a CPA should utilize appropriate accounting principles in describing the specific transaction, besides focusing on the customers concerns regarding internal control and security (Whittington Delaney, 2012). The CPAs engagement should be conducted in accordance with the standards established by the accountancy governing body of the country. During the descriptions of the transactions, all the necessary facts assumptions and circumstances relevant to a specific transaction should be done appropriately and sufficiently to facilitate easy understanding of the report. It is also important for a CPA to include his concluding comments about his observation concerning the prepared financial statements and further provide recommendation on the extent to which such a report can be adopted or relied upon by external users. Restricting use of a report is necessary for limiting the CPAs liability. 4. How could opinion shopping be (a) suspect or (b) beneficial?Opinion shopping is whereby a company searches for an outside auditor who is willing to provide an opinion in support of a particular accounting treatment aimed at helping an entity achieves its reporting objectives (Louwers, 2007). Sometimes such an opinion may frustrate the reliability of an accounting reporting. An opinion shopping is suspect when it occurs in a situation where a company approaches a newly formed accounting firm, which agrees to provide unqualified opinion on a questionable accounting treatment. This is considered a breach of accounting principles and should be investigated. An opinion shopping is beneficial when it happens in a situation entailing a rotational auditing aimed at identifying or solving a financial reporting problem. 5. What is attesta tion? Provide some examples of attestation engagements.An attestation is an engagement where an accountancy practitioner is engaged to issue a review, an examination, or an agreed-upon procedures report on subject matter or an assertion about the subject matter, that is the responsibility of another party (Graham Carmichael, 2012). Some examples of attestation engagements include: Managements Discussion and Analysis (AT 701)Financial Forecasts and Projections (AT 301)Reporting on Pro Forma Financial Information (AT 401)Reporting on an Entitys Internal Control over Financial Reporting (AT 501)Agreed Upon Procedures Engagements (AT 201)Compliance Attestation (AT 601) 6. What is a service organization? Why would it engage an auditor to report on its controls?A service organization is one that provides services that are relevant to user entities internal control for financial reporting (Louwers, 2007). Reporting on the controls of a service organization would need to engage an auditor because auditors have the knowledge of the Statement on Auditing Standards (SAS) that would foster an in-depth examination the organizations control activities and control objectives, which include examination of controls over information technology. By using an independent auditor, credible examination and reporting would be enhanced in a service organization. 7. In what respects is a review of interim financial information similar to a review of the unaudited annual financial statements of a nonpublic company?The various ways in which a review of interim financial information is similar to a review of the unaudited annual financial statements of a nonpublic company include (Whittington Delan...