BUS 426 Chapter Notes - Chapter 9: Internal Control, Audit Risk, Financial Statement

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sapphiresnake846

19 Sep 2012

School

Simon Fraser University

Department

Business Administration

Course

BUS 426

Professor

Michael Favere- Marchesi

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Document Summary

Internal control: the policies and procedures instituted and maintained by the management of an entity in order to provide reasonable assurance that management"s objectives are met. Three objectives in designing an effective internal control. System: reliability of financial reporting, efficiency and effectiveness of operations, compliance with laws and regulations. Management"s objective in designing effective internal control: maintaining reliable control systems, safeguarding assets, optimizing the use of resources, preventing and detecting fraud and error. Testing the controls related to the reliability of the financial reporting. Testing the control over the classes of transactions: transaction-related audit objectives: six audit objectives that must be met before the auditor can conclude that the total for any given class of transactions is fairly stated. Sales transactions are included in the data files and summarized. Considering the whole picture of the client"s internal controls. 3 basic concepts of an internal control system. Management must establish and maintain the entity"s controls.

Related Questions

The difference between a company's strategy and a company's business model is that

A)a company's strategy is the plan for achieving strategic objectives while its business model is the plan for achieving financial objectives.

B)the strategy concerns how to compete successfully and the business model concerns how to operate efficiently.

C)a company's strategy is management's game plan for realizing the strategic vision whereas a company's business model is the game plan for accomplishing the business purpose or mission.

D)strategy relates broadly to a company's competitive moves and business approaches (regardless of the financial outcomes it produces) while the term business model relates to whether the revenues and costs flowing from the strategy demonstrate that the business is viable from a profit perspective.

E)a company's strategy concerns how to please customers while its business model concerns how to please shareholders

whiterhinoceros784

Case Study - 5

Breaking The Bargaining Pattern

Gilson steel is a local fabricating and supply firm. Situated in open country, far from the large steel making centers. The firm has been in business many years. About the third of employees have worked in the organization for more than ten years. Top management would like to get away from the current practice in which negotiations on wage matters and fringes follow the pattern. The firm’s president feels that industry – wide bargaining tends to divorce employees from the firm. He thinks they feel that their employer is a combination of U.S steel and bethlem steel instead of Gilson. He argues that the local firm which has prospered can do better by employees than is possible in national pattern. He says that the local conditions should be considered. His basic objection to current practice, however, is his conviction that it tends to divorce its employees from local employer. The labor relations manager has been urged to try negotiating terms at variance with the national pattern.

Answer the following questions: ·

What theory and policy do you read into the president’s suggestion? ·
How will his ideas fit into the existing pattern of public union policy? ·
Can you suggest a promising innovative approach?

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BUS 426 Chapter Notes - Chapter 9: Internal Control, Audit Risk, Financial Statement

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