trueblood Essay

Words: 883
Pages: 4

In the aftermath of corporate scandals and the passage of the Sarbanes-Oxley Act of 2002 (SOX), the audit committee is vested with greater authority to oversee fi nancial reporting and the appropriation of assets. As a result, the audit committee is responsible for adequate supervision and reporting and for responding to:
• fraud in a fi nancial statement audit;
• actual, perceived or potential confl icts of interest;
• anonymous tips and complaints; and
• through interaction with general counsel, compliance matters such as those that relate to the Foreign Corrupt Practices Act (FCPA).

Attachment II.
• Was the scope of the independent investigation sufficient? Why or why not?
• If the audit engagement team
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Auditing Standards Board defi nes misstatements, and describes the types of misstatements that anti-fraud measures are intended to mitigate, as follows:
Misstatements arising from fraudulent fi nancial reporting are intentional misstatements or omissions of amounts or disclosures in fi nancial statements designed to deceive fi nancial statement users where the effect causes the fi nancial statements not to be presented, in all material respects, in conformity with generally accepted accounting principles (GAAP). Fraudulent fi nancial reporting may be accomplished by the following:
• Manipulation, falsifi cation or alteration of accounting records or supporting documents from which fi nancial statements are prepared
• Misrepresentation in or intentional omission from the fi nancial statements of events, transactions or other signifi cant information
• Intentional misapplication of accounting principles relating to amounts, classifi cation, manner of presentation or disclosure 4
Misstatements arising from misappropriation of assets involve the theft of an entity’s assets where the effect of the theft causes the fi nancial statements not to be presented, in all material respects, in conformity with GAAP. Misappropriation of assets can be accomplished in various ways, including embezzling receipts, stealing assets, or causing an entity to pay