Auditing After Sarbanes-Oxley : Illustrative Cases , Second Edition

Cover Page......Page 1
Title Page......Page 4
Copyright Page......Page 5
Dedication......Page 6
About the Authors......Page 8
Table of Contents......Page 10
SECTION ONE : FRAUD CASES: VIOLATIONS OF GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)......Page 22
Case 1.1: Waste Management: The Matching Principle......Page 24
Case 1.2: WorldCom: The Revenue Recognition Principle......Page 28
Case 1.3: Qwest: The Full Disclosure Principle......Page 32
Case 1.4: Sunbeam: The Revenue Recognition Principle......Page 38
Case 1.5: Waste Management: The Definition of an Asset......Page 42
Case 1.6: Enron: The Revenue Recognition Principle......Page 46
Case 1.7: WorldCom: The Matching Principle......Page 50
Case 1.8: The Fund of Funds: The Conservatism Constraint\n......Page 54
Case 1.9: Qwest: The Revenue Recognition Principle\n......Page 62
Case 1.10: The Baptist Foundation of Arizona: The Conservatism Constraint\n......Page 66
SECTION TWO: ETHICS AND PROFESSIONAL RESPONSIBILITY CASES......Page 70
Case 2.1: Enron: Independence......Page 72
Case 2.2: Waste Management: Due Professional Care......Page 76
Case 2.3: WorldCom: Professional Responsibility......Page 80
Case 2.4: Enron: Quality Assurance......Page 84
Case 2.5: Sunbeam: Due Professional Care......Page 88
Case 2.6: The Fund of Funds: Independence......Page 92
SECTION THREE : FRAUD AND INHERENT RISK ASSESSMENT CASES......Page 96
Case 3.1: Enron  Understanding the Client’s Business and Industry......Page 98
Case 3.2: The Baptist Foundation of Arizona: Related PartyTransactions......Page 102
Case 3.3: WorldCom: Significant Business Acquisitions......Page 106
Case 3.4: Sunbeam: Incentives and Pressure to Commit Fraud......Page 110
Case 3.5: Qwest: Understanding the Client’s Business and Industry......Page 114
Case 3.6: The Fund of Funds: Related Party Transactions......Page 118
Case 3.7: Waste Management: Understanding the Client’s Businessand Industry......Page 124
SECTION FOUR: INTERNAL CONTROL SYSTEMS: ENTITY-LEVELCONTROL CASES......Page 130
Case 4.1: Enron: The Control Environment......Page 132
Case 4.2: Waste Management: Information Technology General Controls......Page 136
Case 4.3: The Baptist Foundation of Arizona: The Whistleblower Hotline......Page 140
Case 4.4: WorldCom: The Internal Audit Function......Page 144
Case 4.5: Waste Management: Top-Side Adjusting Journal Entries......Page 148
SECTION FIVE: INTERNAL CONTROL SYSTEMS: CONTROL ACTIVITY CASES\n......Page 152
Case 5.1: The Fund of Funds: Valuation of Investments......Page 154
Case 5.2: Enron: Presentation and Disclosure of Special Purpose Entities......Page 158
Case 5.3: Sunbeam: Completeness of the Restructuring Reserve......Page 164
Case 5.4: Qwest: Occurrence of Revenue......Page 168
Case 5.5: The Baptist Foundation of Arizona: Presentation and Disclosure of Related Parties......Page 174
Case 5.6: Waste Management: Valuation of Fixed Assets......Page 178
Case 5.7: Qwest: Occurrence of Revenue 163......Page 184
APPENDIX: COMPANY CASES......Page 188
Case A.1: Enron......Page 190
Case A.2: Waste Management......Page 204
Case A.3: WorldCom......Page 220
Case A.4: Sunbeam......Page 234
Case A.5: Qwest......Page 246
Case A.6:The Baptist Foundation of Arizona......Page 260
Case A.7: The Fund of Funds......Page 272