Auditing Essay Example

Auditing Essay 5(a) Prepare a memo to the partner making a recommendation as to whether Barnes and Fischer should or should not accept Ocean Manufacturing, Inc. as an audit client. Carefully justify your position in light of the information in the case. Include consideration of reasons both for and against acceptance and be sure to address both financial and nonfinancial issues to justify your recommendation. MEMORANDUM To:Jane Hunter From:Corrine Subject: Ocean Manufactory Should be Accepted Date:February 3, 2012 Ocean Manufacturing, a medium-sized manufacturer of small home appliances, is our prospective client. First, we should decide whether to accept this client. The purpose is to minimize the likelihood that our auditors will be associated with clients who lack integrity. We can reduce the risk that material misstatements may exist and not be detected by the author. Therefore, we need to investigate the client and obtain certain information that we need. The first step to evaluate the client is to confer with the predecessor auditor. The client granted me permission to contact the previous auditor and he indicated the problems the firm had with Ocean: (1) complexities and problems with Ocean’s new IT system 2) management’s tendency to aggressively reflect year-end accruals in order to meet creditors’ requirements As far as we know the company switched to a new system in 2011 and the transition to the system was not well managed. The company was working to modify the system to make it better. Also, our local office’s IT team is fairly confident they will be abl e to diagnose Ocean’s control weakness and help Ocean overcome current difficulties. Therefore, the system is not an obstacle for our firm to accept the client. We will write a custom essay sample on Auditing specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Auditing specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Auditing specifically for you FOR ONLY $16.38 $13.9/page Hire Writer To meet creditors’ requirements, the management inappropriately reflected year-end accruals. The information reflected on the integrity of management, which might be a risk for us to accept the client. According to the predecessor’s assertion, the reason for the change of auditor is a disagreement over the fee. And the president of Ocean Manufacturing indicated that the main reason for the switch is to build a relationship with a more nationally established CPA firm. Whatever the true reason is, neither will be serious problem regarding accepting the client. We can refer to the fee in the engagement letter before all the auditing work begin. We don’t have a client in the home appliance industry and the industry has been growing at a steady peace. Therefore, the engagement will be a great opportunity for our company to enter a new market. According to the financial reports, we can get some information: On December 31, 2011, the financial report indicates a net profit of $3. 4 million and the net earnings are increasing steadily from 2009 to 2011, which means the company has potential to some extent. According to all the information, we find that the client is able to be accepted. 5(b) Prepare a separate memo to the partner briefly listing and discussing the five or six most important factors or risk areas that will likely affect how the audit is conducted if the Ocean engagement is accepted. Be sure to indicate specific ways in which the audit firm should tailor its approach based on the factors you identify. MEMORANDUM To:Jane Hunter From:Corrine Subject: the Risk Areas if the Ocean Manufactory is Accepted Date:February 4, 2012 Ocean Manufactory is a potential company and so is the industry. When our firm accepts the client, we will have an opportunity to explore the new market. Nevertheless, we can not ignores the risk we face. There are some risk areas we should consider since they will likely affect how the audit is conducted. The risk areas are as following: Home Appliances Industry The home appliance industry is a new industry for our firm and we have never had a client in this field. That means we are not familiar with this industry and lack the necessary expertise. In order to solve this problem we need specialists who do have the necessary expertise. The specialists’ work n this field can be used by our auditor to obtain sufficient audit evidence. Management The company experiences a significant management turnover. The new controller has little relevant experience and is not familiar with the company’s IT system. In this situation, the new controller can attend relevant training and talk to people who have more knowledge about the system to be more to familiar with the system as soon as possible. Accounting and Control System The new accounting system which maintains inventory, accounts receivable, accounts payable and so on was not well managed. Some problems will exist in balance sheet account classification and inventory tracking due to untrained personnel. Employees should obtain some training on the new system to help them work efficiently and effectively. Besides, our local office’s IT team can diagnose the control weakness and help them to overcome the difficulties. Internal management Some important reports like internal management budget reports and receivable billings are often late and inaccurate. The weak management will result in many serious problems. The Ocean Manufactory should strengthen the internal management and improve the effectiveness of the risk management control. Only in this way, the accountants can get the accurate and timely reports which is significant to our auditing process. 5. According to the previous auditor, the management tends to reflect the accruals aggressively in order to meet the creditors’ requirement. Facing the situation, we should try to talk to the management to figure it out. If the statement of the previous auditor is true, we will suggest the management to reflect the accruals accurately.

Highly Successful Parent Teacher Communication

Highly Successful Parent Teacher Communication One of the most beneficial aspects of teaching is building positive relationships with parents. Effective parent-teacher communication is essential for a teacher to be successful. A good relationship between parents and a teacher is invaluable towards maximizing the time that the teacher has with that student. A student who knows that the teacher communicates on a regular basis with their parents and who knows that their parents trust the teacher will likely put more effort into school. Likewise, a student who knows that the teacher rarely or never communicates with their parents and/or their parents do not trust the teacher will often pit the two against each other. That is counterproductive and will create problems for the teacher and ultimately issues for the student as well. Many teachers underestimate the value of building relationships with their students’ parents. Parents can be your best friends, and they can be your worst enemy. It is hard work for a teacher to build trusting cooperative relationships, but it will be well worth all the effort in the long run. The following five tips can help teachers build solid relationships with the parents of the students they serve. Build Their Trust Building a parent’s trust is often a gradual process. First of all, parents need to ensure that you have their child’s best interest at heart. Proving this to some parents can be challenging, but it isn’t impossible. The first step to building their trust is simply letting them know you on a more personal level. There are obviously personal details that you don’t want to give to parents, but don’t be afraid to talk casually with them about hobbies or interest outside of school. If a parent has a similar interest, then milk that for all its worth. If a parent can relate to you, then the communication and trust between you will likely be solid. Don’t be afraid to go the extra mile to help a student. This can win trust and respect faster than anything. Something as simple as a personal call to check on a student who has missed a few days due to illness will stand out in a parent’s mind. Opportunities like this present themselves from time to time. Don’t waste those opportunities. Finally, allow them to see you’re a terrific teacher with their child’s best interest in mind. Demand respect from your students and push them to succeed, but be flexible, understanding, and caring in the process. Parents who care about education will trust you if they see these things. Listen to Them There may be times that a parent has a question or concern about something. The worst thing you can do in this case is to be defensive. Being defensive makes it seem as though you have something to hide. Instead of being defensive listen to everything they have to say before you react. If they have a valid concern, assure them that you will take care of it. If you made a mistake, admit it, apologize for it, and tell them how you plan to remedy it. Most of the time a parent’s questions or concerns come down to miscommunication or misconceptions. Don’t be afraid to clear up any issues, but do so in a tone that is calm and in a manner which is professional. Listening to them is just as powerful as explaining your side. You will find more times than not that the frustration is not with you, but instead with their child and that they simply need to vent. Communicate Often Effective communication can be time-consuming, but it is crucial. There are many ways to communicate these days. Notes, newsletters, daily folders, phone calls, emails, visitations, open room nights, class web pages, postcards, and parent-teacher conferences are some of the most popular means in which to communicate. An effective teacher will likely use several means over the course of the year. Good teachers communicate frequently. If a parent hears it from you, there is a lesser chance of something getting misinterpreted in the process. An important thing to note is that most parents get sick of only hearing unpleasant news about their child. Pick three to four students per week and contact their parents with something positive. Try not to include anything negative in these types of communications. When you do have to contact a parent for something negative like a discipline issue, try to end the conversation on a positive note. Document Every Communication The importance of documenting cannot be underscored. It doesn’t have to be anything in depth. It needs to include the date, parent/student name, and a brief summary. You may never need it, but if you do, it will be well worth the time. No matter how strong of a teacher you are, you will not always make everyone happy. Documenting is invaluable. For example, a parent may not be happy about a decision you have made to retain their child. This is a process that often spans the course of the year. A parent could claim that you never talked to them about it, but if you have it documented that you did four times throughout the year, the parent has no basis for their claim. Fake It When Necessary The reality is that you are not always going to get along or like every parent of every child that you teach. There will be personality conflicts, and sometimes you just don’t have any similar interest. However, you have a job to do and avoiding a parent is ultimately not what is best for that child. Sometimes you will have to grin and bear it. While you may not like being fake, building some sort of positive relationship with their parent will be beneficial to the student.  If you try hard enough, you can find some kind of common ground with just about anyone.  If it benefits the student, you must be willing to go the extra mile even it is uncomfortable at times.