Auditing You Decide Activity Essay

Publicly traded companies are subject to the reporting and disclosure requirements of the Securities Exchange Commission (SEC). The laws that govern the securities industry were established to provide transparency to investors, creditors and shareholders alike. According to Hoyle, Schaefer & Doupnik, (2015) there are seven major disclosure requirements, the first being a five-year summary of operations to encompass sales, assets, income from continuing operations. Followed by a description of business activities, a three year summary of industry segments to include foreign and domestic operations, a list of company directors and executives, quarterly market price of common stock for the last two years, restrictions on the company’s ability to continue paying dividends, and finally, an analysis of the company’s financial condition, changes in the conditions and results of operation.

3. Assuming that processing starts at 7 am on a “busy” day, present the situation during such a day, by constructing an inventory build-up diagram for bins and trucks.

Moreover, the auditor should preform test for effectiveness of internal controls. He may interview management by asking questions on the process of the transactions and operational activities. He may discuss with management the process of some transactions from beginning to end and then test it by using sample testing. Also he/she should make sure that there is proper control of activities; policies and procedures for adequate segregation of duties are met.

Since the majority of US thrive on the use of credit cards, the accounts receivables for a company may no longer be on a cash-to-cash basis. A company may need to sell these accounts to other companies who specialize in handling accounts receivables if they need cash more quickly or if it would be too costly to perform the necessary billing to collect on the account.

For example, the distributors place the order Monday for a Saturday delivery and have until Wednesday to make changes based on customer demand. The demand for bread is higher at the beginning of the month and the third week of the month. Shawn can access any changes the distributor makes with their handheld devices such as increases or decreases and more importantly days sales and days of service. Once the order is received, it is transmitted to production and

The first thing to address is the SEC’s role or influence over Smackey Dog Foods. Since Smackey is private there is not a direct oversight or reporting role for the SEC. Indirectly, however, they help establish GAAP and have a role in how the books should be maintained,

3. The warehouse notifies HQ about receiving the goods and how much of each product is in storage.

Due to state laws being vague, corporate charters were able to avoid the question of

Huge amounts of personnel hours are expended during this process. When a company goes public it becomes the property of the shareholders and thus is required to report all of their financial records and plans for the future.

about the processes and problems. As a first step, Stalk and Margolis identified receiving, inventory

4. The stock and supplier manager have to do a report to the boss and wait for his approbation before purchasing.

Moving on to the new sales returns system, the responsible department is the receiving department. After receiving the products returned by a customer, action has to be taken. The customer may need the company to replace the (damaged or wrong) goods that have been returned, or the customer may want a refund. The company may also issue a credit memorandum to the customer, informing that the outstanding balance is reduced by the returned stock’s amount. One way or another, the accounting records must be updated once more.

Privately held companies do not need to file quarterly earnings reports with the Securities and Exchange Commission (SEC) like they do after

The sequence of a standard audit starts with identifying risks, then assessing the design of controls and finally testing the effectiveness of the controls. Skillful auditors can add value in each phase of the audit.

Emerald Article: Audit evidence: the US standards and landmark cases Rocco R. Vanasco, Clifford R. Skousen, Richard L. Jenson