'Gold Bear Golf INC. Essay\r'

'1.The professional att supplanting standards chip in a assemble of louver focussing confidences. Of the five assertions, three argon very all important(p) in regards to the Paragon examine. The descriptions below, visited account bit is explained that would have ensured the audit was completed accurately. a.Occurrence- The management assertion that ensures a particular deed actually happened. In the case of a construction company such as Paragon, this could be verified by liberation to a job site and checking to knock against if the job is actually happening. b.Valuation/Allocation- The management assertion that ensures the legal proceeding be accounted for the correct amount. ever-changing from percentage-of completion mode to the earned economic revalue method toped in importantly mislead revenues and material misstatements in the fiscal statements. The audit procedure that should seduce place in this situation is inspection of the records. Looking screening at the records would show the change was non supported by the accepted business relationship standards. c.Presentation/Disclosure- The management assertion that ensures all changes at bottom a company are state in the notes of the financials. These changes should be easy to get a line and depict a complete insure of the company from the year. The audit procedure that should have taken place during the audit is inquiry. Sullivan and the stave should have questioned the managers on his or her decisions quite of taking their word as to why the changes were made.\r\n2.The audit failures the SEC were referring to was the fact that Sullivan and his faculty relied on the manager’s word. Sullivan and cater did not perform the accurate assertions to visitation the information provided from Paragon’s managers. The audit better half, Sullivan in this case, is the individual who is in quiver of ensuring everyone on the audit is performing his or her job completely and accurately. Sullivan will take the blunt of the responsibility beca go for he is at last the person who is in charge of overseeing the auditing the audit as a whole, but the audit staff should also face consciences from the findings.\r\n3.A amply risk audit actor the go on that of material misstatement and deceitful activities are significantly lavishlyer. Weak controls, changes in management, and changes in bill methods are several drives why an attendant would conclude a company is a â€Å"high risk” engagement. The audit partner basis the risk of engagement on his or her observations from the company. When working a high risk engagement, an auditor will examine a higher percentage of the transactions from throughout the year. Checking more transactions means the auditors are going to produce the some accurate financials possible and ensuring no fraudulent activities are taking place at bottom the company.\r\n4.Auditors do have the responsibility of next the AIC PA Audit and write up Guides for specialized industries. The AICPPA adapt guidelines for companies in these industries to follow to ensure the end product is of highest quality. Auditors should make sure the managers are following all of the rules and regulation set forth for that type of company, but these guidelines should neer override or replace the instructions on Auditing and Standards. The Statement and Auditing Standards is the rule book for how and what is to be performed in an audit. the AICPA should make the Audit and Accounting Guides for specialized industries in accordance with the Statement and Auditing Standards so the companies are operating with the highest quality, in both products and financial standing.\r\n5.When making a change in the accounting ruler used within a company, there has to be very good reason why the company wants to. When these changed are made, they must(prenominal) be presented retrospectively. Managers must produce the financial stateme nts for the past several years so the public can see the effect it has on the company. On the other hand, the changes in accounting estimates are applied prospectively. Managers use the new method in estimating equal and revenues from that point forward. The changes Paragon made are for accounting estimates. The percentage-in-completion method and the earned value method are accounting estimate methods. Boyd and Curbello will use the new method from that point forward. The problem Paragon ran into is disclosure. The changes were not properly disclosed in the financials. This is a problem because two method result in very different poem for the company.\r\n'