Auditors Regulatory Oversight Essay

Tags: chief executive officer financial reporting case study internal control

Open, View, and/or
Download this Document

Total Length: 989 words ( 3 double-spaced pages)

Total Sources: 4

Page 1 of 3

In recent times, there have been accounting scandals that have stunned the finance and accounting realm, and thereby reemphasized the significance of maintaining proper accounting practices. The recent accounting scandal of Olympus Corporation, a Japanese manufacturing company for cameras and endoscopes is selected for this study. The company's scandal encompassed a 13-year period of accounting irregularities totaling almost $1.7 billion (Infinit Accounting, 2014).



Audit Report Issued by CPA Firm



When Michael C. Woodford was appointed as president and Chief Executive Officer (CEO) of Olympus Corporation, he endeavored to make certain that the financial statements of the company were accurate and reliable. It is at this time that he discovered doubtful transactions in the statements of financial position of the company, with respect to the expenses reported. He instantly started inquisitions regarding these transactions, particularly about the inflated M&A advisory payments. Woodford was sacked by Olympus two weeks later upon deliberating with the management in an effort to remedy the inconsistencies with the books. He thereafter made the decision to report to the British authorities as a whistleblower (Elam et al., 2014). numerous accounting and financial irregularities were uncovered in the financial statements of the company after review, which contained false statements reported by the executives. However, regardless of the apprehensions on the balance sheets reported, the auditors still made the decision to approve the financial reports.

Stuck Writing Your "Auditors Regulatory Oversight" Essay?

View All Our Example Auditors Regulatory Oversight Essay

Have A Custom Example Essay Written

Through the tobashi scheme, Olympus Imaging Executives were able to hide approximately $1.7 billion in losses (Elam et al., 2014).



Statement of GAAS Violated by Company



In delineation, generally accepted auditing standards (GAAS) are the group of systematic guidelines used by auditors when undertaking audits of the finances of firms, making certain that the actions and reports of the auditor are accurate, consistent, and verifiable. In general, GAAS encompasses three components that have to be employed in the course of every audit. These elements include general standards, standards of fieldwork, and standards of reporting. For each of the three standards, there are a set of rules that must be complied with in the course of every audit. The statement violated is within the standards of fieldwork (AICPA, 2016). Most possibly, Olympus Corporation violated the regulation that the "auditor must obtain a sufficient understanding of the entity and its environment, including its internal control, to assess the risk of material misstatement of the financial statements whether due to error or fraud, and to design the nature, timing, and extent of further audit procedures" (AICPA, 2016).



Comparison of Responsibilities for Management and Auditor for Financial Reporting….....

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


References


AICPA. (2016). Understanding the Entity and Its Environment and Assessing. Retrieved from: http://www.aicpa.org/research/standards/auditattest/downloadabledocuments/au-00314.pdf

Elam, D., Madrigal, M., & Jackson, M. (2014). Olympus imaging fraud scandal: a case study. American Journal of Business Education (Online), 7(4), 325.

Gibson, C. (2009). Financial Reporting and Analysis: Using Financial Accounting Information. Ohio: Cengage Learning.

Infinit Accounting. (2014). 5 Biggest Accounting Scandals in 2014 to Learn From. Retrieved from: http://www.infinitaccounting.com/blog/5-biggest-accounting-scandals-in-2014-to-learn-from/

Mintz, S. (2012). Financial Statement Fraud at Olympus. Ethics Sage, January, 6.

PCAOB. (2014). PCAOB Announces Settled Disciplinary Actions against Two Audit Firms and Four Individuals. Retrieved from: https://pcaobus.org/News/Releases/Pages/05072014_Enforcement.aspx

PCAOB. (2016). About the PCAOB. Retrieved from: https://pcaobus.org/About/Pages/default.aspx

sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Auditors Regulatory Oversight" (2016, October 30) Retrieved May 19, 2024, from
https://www.aceyourpaper.com/essays/auditors-regulatory-oversight-essay

Latest MLA Format (8th edition)

Copy Reference
"Auditors Regulatory Oversight" 30 October 2016. Web.19 May. 2024. <
https://www.aceyourpaper.com/essays/auditors-regulatory-oversight-essay>

Latest Chicago Format (16th edition)

Copy Reference
"Auditors Regulatory Oversight", 30 October 2016, Accessed.19 May. 2024,
https://www.aceyourpaper.com/essays/auditors-regulatory-oversight-essay
   

Open, View, and/or
Download this Document
order custom essay example