Please write a four to five page paper regarding the four types of audit opinion:
1. Unqualified Opinion
2. Qualified Opinion
3. Adverse Opinion
4. Disclaimer Opinion.
Include the following:
• Describe the scenarios under which each of these audit opinions
• How do investors react to these different audit opinions?
o Provide examples of real organizations for each of these opinions
• What are the consequences or benefits an organization may encounter as a result of each of these opinions
o Provide examples of real organizations for each of these opinions
Please provide at least five outside resources used to write the paper. These sources should cited using the APA formatting guidelines including in-text citations provided throughout the paper where information is taken from these resources.
View your assignment rubric.
You can use any of the references from weeks 1-8 in our classroom including discussion postings and the links
You can use any of the references from weeks 1-8 in our classroom including discussion postings and the links to the COSO internal control and ERM materials. The responses must be in your own words. I do not expect citations. You are not allowed to use other sources or discuss the exam with other students. You must submit your responses in a Word document. All five questions are worth 20 points each.
1) Internal auditing is going to be performing an assurance engagement dealing with controls over production, shipping, and inventory. Some of the items to be covered in the engagement include:
• Determine if there is an issue with excess, obsolete or unsaleable inventory.
• Determine if there have been issues with accuracy of the inventory quantities in the computer system
• Determine if there are issues with late shipments or errors in what material is being shipped to customers.
• Determine if there are material issues with the quality of the company’s finished products.
For each item, select the two best tests in the reading Audit Test Type Guide which in your judgment are the most appropriate to gather the required evidence. Briefly explain why you selected each test. Briefly describe what evidence you are trying to obtain from each test. For your response, you can create a chart.
2) Go to the accounts receivable/collections audit program at the bottom of this document.
In three different sections of the audit program, identify one step where audit software can be used to perform testing. You must clear indicate the step for each example. Explain how the audit software can be used to perform these steps (i.e., the basic logic each query or program would use).
Here is a helpful hint on how to go about responding to this question. I am going to use accounts payable as an example. Let’s say the audit step is to test to see if any employees are also set up in the A/P vendor master. One approach is to match the vendor master file to the employee master file based on street address, city, and state. Any matches would be investigated. (FYI- If the two files do not use the same conventions for street address, city, and state, then some data transformation would be needed to make the query work correctly.)
3) Management is considering outsourcing manufacturing of a portable MRI machine to a vendor in Mexico. This product has only been on the market for two years. In that time, it has been a commercial success in North America and Asia. The company has a patent on this product and is currently the only company selling a portable MRI machine. The U.S. plant where the product is currently being made is not being closed. It will continue to be used to manufacture other products. The Mexican company being considered does manufacturing for other large U.S. medical device companies such as Medtronic and Boston Scientific.
• What are the most significant risks?
• What key controls need to be in place?
• What role can internal auditing play in assisting management both prior to signing the outsourcing contract and after the process has been outsourced?
4) Richard Feynman is one of the most brilliant physicists of all time. He was a member of the commission investigating the Challenger space shuttle disaster. What are three lessons for internal auditors regarding management of risk that you can learn from reading his appendix to the main report? http://history.nasa.gov/rogersrep/v2appf.htm. Be specific. I want lessons that can be applied to internal audits outside of NASA. I recommend not referring to any of the week 2 discussion postings. Start from scratch.
5) ABC’s capital-asset procurement policy requires the Board of CAEs (BOD) approve any single acquisition over $150,000. If the board approves a project, then the treasurer will transfer the funds to the respective plant. Within one year, the internal auditing function is charged with reviewing each acquisition to check the propriety of the purchase and disbursal of funds.
ABC’s Plant Controller prepared the first proposal for a DEK cutting machine. Other plants were told to wait until internal auditing could inspect the documentation associated with the acquisition and evaluate the project’s operating effectiveness and efficiency. The plant’s proposal was the second largest proposal ever submitted in the company’s history and it totaled $1.3 million dollars. The cost of the new machine by itself was listed in the proposal at $1.1 million. Labor and other costs necessary to remove the old machine and install the new machine totaled $200,000.
The internal auditor assigned to the investigation was Phil Ramone. Phil had been with ABC four years performing mostly production operational audits (on existing processes) and internal control payroll audits. Phil’s considerable experience in these areas led him to believe that the procedures associated with this capital-asset audit would be as simple and routine. This was not Phil’s first visit to the plant. In fact, Phil had performed an audit on the plant’s payroll system only a year ago. Phil’s recollection of the experience was not a pleasant one. He had several confrontations with the plant controller, mostly as a result of personality clashes. While all the payroll issues were easily resolved, Phil felt there was still an adversarial relationship between him and the controller and was on guard for any preemptive strikes this time around by the controller.
It was a long drive to the plant so when Phil arrived a little late the day of his audit he was greeted by the controller with a perceived air of indifference and promptly led to a secluded office. The controller calmly explained that he was extremely busy and would answer any questions at the end of the day. Phil merely nodded his head and sat down in front of several tall piles of invoices, which the controller stated was the documentation supporting the purchase, set up, and testing of the new machine. Phil was somewhat surprised, fully expecting to see only a handful of invoices, but did not ask for any explanations. As Phil began looking through the myriad of statements and canceled checks, he soon found one invoice near the top of the first pile that indicated the actual price paid for the machine itself was only $850,000.
Phil’s first reaction was to call the CAE of auditing. When he found that the CAE was out for the day and could not be reached, he then decided to call the VP of Operations at corporate headquarters. Phil was critical of the plant controller when describing the seriousness of his suspicions based on this preliminary information. Phil didn’t know that there was a BOD meeting that day and that the news would be passed on to them. The members of the Board were outraged, screaming over the alleged misuse of the funds and possible fraud.
Phil was unaware that in a private conference call the Chair of the Board of CAEs would soon lambast the plant controller. Seconds after the call, the controller walked up to Phil and had only two words to say – “get out.” Phil was flabbergasted; he called back to headquarters, only to receive a rather icy response from the Chair of the BOD’s secretary suggesting that he return immediately.
Three days later Phil was called in to the CAE’s office. The CAE described how he personally went to the plant the next day after Phil’s visit and performed the capital-asset audit himself. The CAE found that there were a number of reasonable explanations for the differences between the original proposal and the actual expenditure. To begin with, the company that sold the machine would not discount the price until the BOD approved the contract. Competing bids drove the cost of the machine from $1.1 million to $850,000. However, there were several factors that offset these savings.
Originally, the setup of the new machine was projected to take a week and a half but ended up taking a month. No one really knew how difficult it was going to be to remove the old machine that was embedded in the concrete floor (to minimize vibration). This removal took additional time and outside labor. Also, the new machine was to be put in the same area where the old machine was located. Since the plant could not afford to shut down for any extended length of time, the old machine was moved over the Thanksgiving Day holiday when labor rates were doubled. In addition, while the new machine was being tested, the old machine had to be kept running in its temporary location. During the time that both machines were running, machine operators and supporting personnel (e.g., those loading and unloading the conveyors) worked double shifts in order to test the new machine. This parallel process took longer than expected because the plant engineers were not familiar enough with the new machine to deal with minor problems. Also, special outside consultants were hired for the first two weeks to set up the machine.
Another unexpected cost arose because the new machine put out a greater number of larger pieces of wood requiring required an additional conveyor belt to accept and carry the larger pieces. The savings from the discount was used to purchase this necessary piece of equipment. In sum, all of these additional and unexpected outlays were very expensive and brought the total to just under the original proposed cost of $1.1 million.
The CAE went on to explain to Phil that the reason for the abnormally large number of invoices was an endless stream of trips to the local electrical and hardware stores to buy the necessary parts and supplies to keep the transition from the old to the new machine moving smoothly. As it turned out, the Controller of the plant actually did a commendable job in overseeing the project and keeping accurate records of the disbursements. In fact, the controller created a specialized installation guide that will probably save ABC hundreds of thousands of dollars when the remaining plants order more of these machines.
AbbVie Inc/Pharmaclics Acquisition case Section 1 – Overview – 10 points: Content clearly communicates a thorough understanding of the
Accounting Assignment Help AbbVie Inc/Pharmaclics Acquisition case
Section 1 – Overview – 10 points:
Content clearly communicates a thorough understanding of the industry, both entities, the transaction and its motives (not simply copying the acquirer’s press release). Author’s own words are used (no “cut and paste” without attribution) and all proper citations are included.
Written in clear, succinct sentences and strong, logical paragraphs. All sources are appropriately cited, and a reference list is included.
Section 2 – Stock market reaction
• Identify expected important event dates (relevant to your transaction as well as other significant events impacting both entities around the same time)
• Lay out expected approach to analysis, including verified data sources for your specific entities
You must include specific document references for all sections.
This outline must include detailed information specific to the transaction and explain the team’s expected approach to analyzing this specific transaction, including the source documents you have collected to support your work. Simply parroting the project requirements will not earn these points.
I am looking for evidence that your team has collected and reviewed enough specific supporting information to assure a successful project.
source to review:
Read the third brief case at the end of Chapter 5 (about Max and Mortimer). (Brief Cases appear before Essay
Read the third brief case at the end of Chapter 5 (about Max and Mortimer). (Brief Cases appear before Cases.) First, explain the importance of the discovery process in civil litigation and the role of the Federal Rules of Civil Procedure. Then explain the discovery device that should be used in the case, and provide a rationale for your choice. [MO 2.3]
See case study attached[supanova_question]