Академический Документы
Профессиональный Документы
Культура Документы
Issue in Enroona
Issue : Android assisted to puff up reported return of off Balance Sheet
Recommendation:
As an auditor, they must apply fundamental principles towards his work such
as be a professional and act integrity, objectivity and free from any influence
that might impair his independence. Integrity means auditor must be
straightforward, honest and sincere. Objectivity is member shall to be free
from any interest.
David cantikkan balance sheet enroona supaya performance enrona bagus,
tapi benda tu tak bagus sbb david dah tipu statement balance sheet tu,
sepatutnya david kena work dengan ikhlas.
Someone should supervise davids work and all his employees
Kerja david mesti dipantau dengan any supervisor to ensure that david do the
ethical behavior.
Management should improve their business strategy to avoid any losses
Many off-book partnership not properly accounted for & were not
independent entities
Recommendation : Chewco and Chewbacas account must be shown to
management to indicate their performance
Creative accounting is practically legal but it does not help to achieve the
target standards to be accomplished.
Androids other client, Solid Waste also used improper creative accounting
and Androids help them to enhance their reported income.
SOLUTIONS:
-
Admit mistakes to SEC for producing improper unqualified audit report for
Enroona since 1997.
1. Cooperate with SEC to investigate the case
2. Provide evidence and speak truthfully.
Sack/Fire the engagement team that responsible in auditing Enroona.
1. Restructure the organization
Revised the audit process of the company
1. Include more reviews from upper management for true and fair view.
2. Avoid members with conflict of interest.
David being the auditor of Enronaas account for the past 16 years.
This relationship lead to unfairness of making auditing because they had
know each other for a long period of time.
There is a close relationship between them
Recommendation
Rotation of the appointment of auditors
Once the audit had engaged with the client for so long, familiarity with the
client would exist.
This lead to lack of independence
So, in order to avoid this threat, it is suggested that a rotation of auditors is
imply in this company.
It is usually the rotation is about the 5 years for a auditor.
There is also creating self-interest threat for a professional auditor in public practice.
Androids are afraid that they will lose awarding future audit engagement if
Androids couldnt do what the management of Enronaa asked them to do.
Enronna is Androids single biggest client
Reaching audit fees of up to $100million per Annum.
All of the information gather lead the auditor to be lack of independency
because
o Having undue dependence on total fees from the client
o Concerned about the possibility of losing a significant client
Recommendation
Issue :Android did not have integrity with their clients.It shown when
Androids assisted their client, Enronaa and Solid Waste to issue a false audit report
for their financial statements. In addition, Androids also didnt apply the auditors
integrity responsibility when they shredding their clients documents .
Recommendation :
In 1988
remediation reserve
Refusal to write-off permitting and project costs on impaired or
abandoned landfills.
So, management responsible for overseeing the activities of employee and
typically does do by implementing and monitoring processes and internal
controls. (pg 160)
accounting frameworks.
Identify factor affecting risks
Assess significance of risk and likelihood of occurrence presentation and
Issues
Self-interest threat
Recommendation