AC 503 Unit 3 Detailed Outline

Topics: Audit, Auditing, Fraud Pages: 4 (1358 words) Published: January 23, 2015
AC 503 Unit 3 Detailed Outline
DeMarion Crite

I.Abstract
II.Auditing Collusion
i.Definition of auditing and collusion
III.Auditing Collusion and Fraud Investigations
i.Risk of Collusion
ii.Audit failures
iii.Fraud Investigations
iv.Need for Auditing and Accounting Reform
IV.Sarbanes-Oxley Act of 2002
i.History
ii.Eleven regulatory titles of SOX
iii.PCAOB
iv.Costs of Mandatory Audit Firm Rotation
V.Auditing Collusion and the Sarbanes-Oxley Act
i.Incentives for auditing collusion prior to SOX
ii.How SOX impacted auditing collusion
VI.Conclusion

Abstract
In the past, auditing collusion has been exposed in scandals such as Enron, WorldCom, and Tyco International, leaving the accounting industry in desperate need of regulatory reformation. In 2002, the Sarbanes-Oxley Act of 2002 was developed in an effort to deter these types of scandals. The enactment of the Sarbanes-Oxley Act in 2002 has brought to the surface the much needed regulatory control to isolate and control acts of auditing collusion. Auditing Collusion

Auditing is defined as the inspection of financial records and reports in an effort to ensure accuracy and reliability. The purpose behind auditing is to assist investors and third party users of the financial information by providing adequate decision making tools. Collusion is a secret agreement between two or more participants to commit illegal activities that will result in a personal gain. Auditing collusion is best defined as an agreement between two or more members of corporate management to commit illegal acts in order to achieve a greater personal gain. Auditing Collusion and Fraud Investigations

Fraud is intentionally falsifying part or all of the financial statements in order to change the appearance of the company’s overall financial health. “Employee fraud appears to be on the rise in this poor economic climate. Understanding why businesses need to focus on prevention is critical in order to...

References: 1. Brown, A. (2007). Incentives for Auditor Collusion in Pre-Sarbanes-Oxley Regulatory Environment. Law and Context, 25(2), 178-212.
2. Frieswick, K. (2003, July 01). How audits must change. Retrieved 2/12/2013 from http://www.cfo.com/article.cfm/3009752/c_3036076
3. Chi, W. (2011) An Overlooked Effect of Mandatory Audit-Firm Rotation on Investigation Strategies. Or Spectrum, 33(2), 265-285. Doi:10.1007/s00291-010-0221-4.
4. Tillman, B. (2002), Who’s Afraid of Sarbanes-Oxley? Information Management Journal, 36(6), 16. Retrieved from EBSCOhost 2/18/13.
5. Moore, G. & Scott, W. R. (1989). Auditors’ Legal Liability, Collusion with Management, and Investors’ Loss. Contemporary Accounting Research, 5(2), 754-774. Retrieved from EBSCOhost 2/18/13.
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • NVQ 3 Unit 302 Essay
  • Unit 3
  • Unit 3 p6 Essay
  • unit 3 distinction 1 Essay
  • UNIT 503 Essay
  • Unit 3: Marketing Essay
  • unit 331 outcome 3 Essay
  • unit 302 learning outcome 3 3 Essay

Become a StudyMode Member

Sign Up - It's Free