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Finance and Financial Management Commons™
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Articles 1 - 4 of 4
Full-Text Articles in Finance and Financial Management
Auditor Independence: Third Party Hiring And Paying Auditors, Silvia Romero
Auditor Independence: Third Party Hiring And Paying Auditors, Silvia Romero
Department of Accounting and Finance Faculty Scholarship and Creative Works
Purpose – Although the Sarbanes Oxley Act (SOX) has introduced rules to avoid auditor independence impairment, there are still issues that are not sufficiently solved. The purpose of this paper is to discuss the problems of auditor independence that arise by auditors being hired and paid by the auditee, and by SOX requiring rotation of only the lead audit partner. Design/methodology/approach – The paper takes the form of a discussion paper, exploring alternatives to overcome the mentioned issues of independence. Findings – The paper presents an alternative where auditors are hired and paid by an external third party. Besides this …
Sox Section 404 Material Weaknesses Related To Revenue Recognition, Dana R. Hermanson, Daniel M. Ivan, Susan H. Iva
Sox Section 404 Material Weaknesses Related To Revenue Recognition, Dana R. Hermanson, Daniel M. Ivan, Susan H. Iva
Faculty and Research Publications
The article analyzes disclosures of material weaknesses in internal control after the implementation of U.S. Sarbanes-Oxley Act of 2002 (SOX) 404 and summarizes the efforts of firms to remediate such material weaknesses. According to SOX section 404, management must issue a report on the effectiveness of the internal control of the firm over financial reporting. It notes that a report must be issued by the external auditor expressing an opinion on the effectiveness of internal control over financial reporting.
Top 10 Audit Deficiencies, Mark S. Beasley, Joseph V. Carcello, Dana R. Hermanson
Top 10 Audit Deficiencies, Mark S. Beasley, Joseph V. Carcello, Dana R. Hermanson
Faculty and Research Publications
The article focuses on financial statement fraud based on cases wherein the U.S. Securities and Exchange Commission sanctioned auditors for their association with fraudulent financial statements. All of the cases involved public companies, most of which engaged ill fraudulent financial reporting. Only a few engaged in misappropriation of assets or defalcation. The most common problem, alleged in 90% of the cases, was the auditor's failure to gather sufficient evidence. In some instances, this failure was pervasive throughout the engagement while in other instances the allegations were more specific. For example, many of the cases involved inadequate evidence in the areas …
Going-Concern Audit Report Recipients Before And After Sas No. 59, Marshall A. Geiger, Kannan Raghunandan, D. V. Rama
Going-Concern Audit Report Recipients Before And After Sas No. 59, Marshall A. Geiger, Kannan Raghunandan, D. V. Rama
Accounting Faculty Publications
In an attempt to provide information to make an evaluation on whether the requirements under SAS No. 59 have had any significant effect on auditor reporting decisions, a study was conducted that examined companies receiving going-concern modified reports before and after the implementation of SAS No. 59. We wanted to assess whether auditors were issuing going-concern modified reports to clients exhibiting different levels of financial stress and also whether the bankruptcy rate of such companies was different after the adoption of SAS No. 59.