first principle sess Case Ashley White Hudson; Kim Crayton; Brenda run; Latisha Blackmon ETH 376 whitethorn 28th, 2012 Juan C. Vargas rudiment Corporation Case ABC Corporation is a large publically held corporation that is in the attend to of universe visited byÂ external auditors from the CPA firm, Green &type A; Associates.Â Issues relating to audit opinions,Â internal controls, valuation orders, compliance with SOX, GAAS, and GAAP rules and honourable points involving ABC Corporation and Green & Associates will be discussed. ABC Corporation was utilizing the FIFO inventory method for the true social class to decl be a begin bring in profit which reflects a lower net income in gear up to pay lower taxes and increase their cash flow. FIFO method is used when a company uses old inventory first ( initial In First Out) so that they can preclude the inventory from being obsolescence and/or be sold at a stable price. By using this method the income literary argument assigns a spirited income due to the lower value of the damage of goods sold. The balance sheet would besides show a high value for the inventory that is on hand. ABC Company destinyed to show that their expenses were lower and their income was high than what it actually was, resulting in a higher retained dinero value at the end of the period.
To the public, it would estimate as though the company is thriving and paying tabu larger dividends to stockholders. Stockholders whitethorn assume when reading the financial statements that they would be receiving a higher return each month or quarter w hen in reality that would not be the font e! specially if they are planning on switching to LIFO. It is unethical to make a huge financial decision establish on only(prenominal) short term goals. The Sabarnes-Oxley act of two-thousand and twelve, contains 11 sections detailing rules and regulations for financial reporting.Â The SOX act section 404 requires that management of publically held corporations impart the living as partÂ of their required annual counterchange report,...If you want to get a full essay, order it on our website: OrderCustomPaper.com
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