Essays on Generally Accepted Accounting Principles

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Introduction

In 2000, the Chief Executive Officer (CEO) of Qwest, Joseph Nacchio, was charged civil and criminal liabilities after it has been found that he violated the provisions of GAAP against fraud and insider trading. He was sentenced to six years in prison in 2007 and was slapped with a $19 Million fine and a forfeiture order for proven illegal stock sales transactions worth $52 Million. In this memo, the author discusses the different aspects of Qwest’s case, emphasizing the role of GAAP and the PCAOB.

The Generally Accepted Accounting Principles (GAAP) refers to a standard framework of ...

Abstract 3

Auditors’ Responsibilities and Potential Liabilities 4 Types of Audit Reports and Underlying Reasons for Their Issuance 5 Unqualified Opinion 6 Qualified Opinion Report 7 Adverse Opinion Report 7 Disclaimer of Opinion Report 8

References 9

Abstract This research paper is dedicated to make an important discussion about the different types of reports issued by an external auditor to form an opinion or judgment about the reliability and accuracy of the financial records and statements of the audit client. Generally, auditors issue four types of auditor reports depending on specific situations. Also, different responsibilities of an external auditor are also highlighted while ...

Discussion Board

Discussion Board

Randy’s decision to omit both the assets and the pending payments is because he wants the company’s financial statement to look good when the creditors assess at the company’s financial records. If he acted ethically and put the assets without having paid for them the creditors would most likely decline to give the company the loan, due to the outstanding debt. In this regard, I think Randy’s decision was ill intended and was misleading to the company’s creditors (Hogan, Rezaee, Riley, & Velury, 2008). Explain the circumstances under which Randy’s decision would ...

There is a considerable and sizeable population of small business in the US economy. Statistically speaking there are over 28 million small business that occurs with small business specifically indicating businesses with fewer than 500 employees. Over 22, million individuals are self-employed without any additional payrolls or having employed other persons. Of the working population, a considerable percentage of over 50% that translates to 120 million individuals work in the small business (US statistics and data, 2016). Small business on average have modest turnovers that attract income taxes on the cash generated. Business entities are relevant in the generation ...

GAAP are the standards of accounting that are used in the US. They give way for the recording and reporting of financial information in an orderly manner. Companies that uses GAAP have always benefited from it since it eases the comparison of company financial statements burden. The GAAP helps in the healthcare sector in establishing wealth of an organization and the financial strength rating earning (Milgram, 353). Under the GAAP, the accrual accounting method of accounting is used by various businesses. It acts in allowing the companies to report that may be still outstanding. Business can display an acquisition ...

Abstract

This paper presents the ideal purpose of adopting a unitary global set of accounting standards to be applied across the globe. It presents the major characteristics of both the dominant accounting standards used worldwide, the IFRS and the US GAAP. It examines whether the IFRS or US GAAP works best for the present and the future needs of a global finance system. The various differences of these two accounting standards were shown. The major applications of the IFRS as the leading accounting standards and principles were also highlighted in the paper. It also provided various guidelines in this seemingly ...

There are four American Institute of Certified Public Accountants Standards of reporting. First is that the auditor should say whether the financial statements are submitted in a manner conforming to accounting principles which are generally accepted. Second, the auditor of show in the auditor’s report circumstances which the principles have not been observed consistently currently in relation to the prior period. Third, the auditor should also state in the auditor’s report if they find out that informative disclosures are not very adequate (Tracy, 2009). Lastly, the auditor is expected to state an opinion in relation to financial statements ...

Introduction

Entities of health care recognize revenue for which a little portion of the total amount is billable or billed or the final collection is not assured reasonably at the time the services are rendered. There have been concerns raised by the constituents that these kind of accounting practices lead to gross-up revenue for unexpected amounts to be collected in the end. To add to it, due to the fact that entities of health care make their own decisions as far as bad debts and adjustment to revenues is concerned, the decisions are different from one another and it is not ...

Introduction

There is a huge difference between earning the money by becoming an entrepreneur or by earning through the job (Abrams, 2006). Entrepreneurship usually depends upon the general idea which have in mind of an individual. It is an important thing that induces a person to open a business and creating opportunities. A business will not be effective until and unless it creates employment opportunities for the individuals accordingly. One of the basic needs that have been arose after the current economic crisis is the establishment of business and employment opportunities. An economy wherein citizens have charm to establish a business in the region ...

Introduction

With the emergence of a global competition, every business faces a challenge to capture more market share by improving the bottom line of its financial statements and reinvesting much of the earnings to expand operations. For this organizations implement tight internal controls so that none of the business transaction goes unchecked. In this regard, an auditor’s role is critical to track any possibility of fraudulent activity within the business finance. With such a concept in mind, this paper has been written to identify the roles and responsibilities which an internal auditor assumes within an organization. The major focus of this ...

Summary of the Elements of Financial Management

There are numerous elements of financial management and for financial management to be successful, it is important that each of the elements are taken care of and considered carefully. Financial Reporting, Accounting Records and Source Documentation, Budget Control, and Cash Management are four of the most important elements of an effective financial management system . Some literatures may use different terms only to suggest the same thing. There are also other aspects or elements of financial management such as allowable cost calculations, compliance, and internal control of financial assets, among others. It may be practical for someone who is ...

Importance of Accounting

Analysis and financial decision making reasons Financial statements produced in accounting helps businesses and make economically informed decisions since lack of accounting will result to poor decisions from business executives. Also accounting is vital since existing and potential investors of a businesses will making rely on accounting information to make investment analysis (Wild, 2007).

Record keeping

A business cannot operate effectively if accounting records are not well kept and executed. Accounting is one of the main drivers of record keeping. Organizational data is collected from different sources, systematized, scrutinized, interpreted and then communicated to the final users.

Fraud scrutiny and prevention

Fraud scrutiny and prevention ...

[Author’s name] Accounting and finance are two different things and both of the provisions are important for an organization. Accounting is the name of recorded and maintain the data accordingly while finance is the name of utilizing the funds of an organization at a place from where the likelihood of earning would be on a higher place. Both of the departments are important for an organization because both of these organization deals entirely with the financial based competitiveness of an organization as a whole. The real productivity of an organization does not relate only with the selling of services ...

AMR Corporation

- AMR Corporation is a conglomerate airline company incorporated in Delaware, October 1982. AMR’s principal subsidiary is American Airlines, founded in 1934. - The name of AMR’s external auditing firm was Ernst & Young LLP, Dallas Texas office. - The main reason for the bankruptcy filing was to restructure the debt and costs that had become a competitive disadvantage to AMR. Labor costs, volatile fuel prices, and economic uncertainty were the main drivers in this cost disadvantage. Furthermore, AMR’s competitors had previously filed for Chapter 11 bankruptcy in order to accomplish the same goals through restructuring. ...

Introductory section

- Does this material define the primary government? The document has defined the primary government in which the city operates under as the council manger form with six members who are elected for a four year term. - Does the introductory section discuss the government’s financial condition at the balance sheet date? The introduction briefly discusses the financial position of the government where it states that on a government wide basis, the city’s net assets grew by $19.6 million in that fiscal year which was generated by governmental activities it continues to state that the city’s combined ...

Introduction

Generally accepted accounting principles refer to the accounting standards that lay the procedure and method of operations in the larger accounting discipline. In the preparation of accounting information and data, the process ought to be guided by an inclusive framework that essentially encapsulates accounting principles. It should be appreciated that the generally accepted accounting principles do not necessarily give the substantive rules rule procedure; rather, they give the guidelines of operations. The paper briefly discusses some of the essential generally accepted standards and their relation to healthcare finance and reports.

Consistency

Consistency refers to the application of a definite procedure and ...

Introduction: Accrual and Cash basis of accounting are the two methods of making a record of the business transactions in the organization’s records. According to Rich, Jones, Mowen & Hansen (2012) “Under Cash basis accounting, revenues and expenses are recorded when cash is received or paid regardless of when the revenues are earned or the expenses are incurred. Accrual basis accounting; links income measurement, to the selling activities of a company by recognizing revenues and expenses when they occur” (p. 135). The accrual basis of accounting adheres to the revenue recognition and expense recognition principle as laid down by the ...

Query 1. In most major contracts, contractors negotiate for advance payments, which ordinarily range from thirty to fifty per cent of the contract value. This poses the risk for the buyer. To address this risk on advance payment to supplier, RTE should ask for repayment or advance payment guarantee assuring the repayment of the down-payment in the vent of non-performance. They are issued for the full amount of advances. The specific risk covered by repayment guarantee is ordinarily described in general terms, namely non-performance. Accordingly, the text of most repayment guarantees does not indicate whether the beneficiary can only ...

Generally accepted accounting principles

Health care financial management like that of other industries follows a set of generally accepted accounting principles (GAAP) regardless of whether it is for a profit or non-profit making organization. Health care organizations generate their revenues from delivering services and from the sale of drugs and medical supplies. Expenses in health care organizations normally include but are not limited to the costs related to labor and the purchase of drugs and medical supplies (Hankins & Baker, pp.412-413). These transactions have to be recorded according to the concepts of GAAP. The aim of this essay is therefore is to discuss the following generally ...