Discussion – What is fair compensation?

Discussion Forum Directions:

WHAT: You will be writing three or more Discussion posts per week. Your main post must be two to three substantive paragraphs (250+ words) and include at least two references/citations. Please follow up with two subsequent replies to colleagues. Each reply should consist of a relevant paragraph containing 50 words or more.

WHY:Discussion questions are designed for you to demonstrate your knowledge and understanding of the weekly material. This forum provides an opportunity to develop ideas and concepts with your instructor and peers. The Discussion format assists with development of communication skills and critical thinking necessary for success in the modern workplace.

HOW: Your postings should be substantive, demonstrate independent thought relevant to the topic, and encourage continued discussion. Please avoid simply repeating previous posts and agreeing. Provide supporting evidence of your ideas and opinions through the use of personal or work examples, relevant articles or websites, or concepts covered in the week’s readings.

WHEN: Your first post must be made by 11:59 p.m. (MT) Wednesday, and you must post the remaining two before 11:59 (MT) Saturday. You are expected to participate in the ongoing discussion on at least two different days during the week.

Question for the Week

In a feisty response to critics who accuse Wal-Mart of providing poverty-level wages (around $9.68 an hour, on average) and few benefits, Wal-Mart chief executive H. Lee Scott, Jr., said Wal-Mart offered good, stable jobs, noting that when it opens a store, more than 3,000 people often apply for 300 jobs. “It doesn’t make sense,” Mr. Scott said, “that people would line up for jobs that are worse than they could get elsewhere, with fewer benefits and less opportunities.” Based on what you learned in this chapter, do you agree with Mr. Scott’s assessment? Why or why not?

 

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a minimum three page summary of two (similar subject) studies/articles from respected scholarly peer reviewed journals. Compare and contrast the two studies.such as; the entrepreneur and the family business, or non-profit, retail, small business startup, social entrepreneurship, bootstrapping, etc.

The papers will be written in APA format and a reference page.

 

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42 Multiple Choices Questions. Please highlight the correct answers in red. 

1

Which of the following are independent private-sector standard-setting bodies?

• SEC and IRS

• National Association of State Boards of Accountancy and the American Accounting Association

• AICPA and IIA

• FASB and the Governmental Accounting Standards Board

• 2. When providing audit services, the certified public accountant (CPA) is expected to be?

• an advocate for the general public.

• independent of the client.

• indifferent to the effect of the financial statements and the audit report.

• an advocate for the client.

  3. Public Company Accounting Oversight Board (PCAOB) standards require the auditor to evaluate the effectiveness of the audit committee as part of understanding the control environment and monitoring. Which of the following is NOT a factor the auditor should consider in making this evaluation?

• Compensation practices with respect to members of the audit committee

• The audit committee’s responsiveness to issues raised by the auditor

• The clarity with which the audit committee’s responsibilities are articulated

• The independence of the audit committee from management

  4. What level of assurance does the reader of a private company financial statement receive on the company’s system of internal controls?

• Negative

• None

• Reasonable

• Positive

  5) Section 18 liability is relatively narrow in scope because it relates to a false or misleading statement in documents filed with the?

• Internal Revenue Service (IRS).

• FASB.

• American Institute of Certified Public Accountants (AICPA).

• Securities and Exchanges Commission (SEC).

  6. The risk that the auditor may unknowingly fail to appropriately modify his or her opinion on financial statements that are materially misstated is

• audit risk.

• control risk.

• tests of details risk.

• analytical procedures risk.

  7. Which of the following management responsibilities is NOT established under PCAOB standards?

• To perform cost-benefit analysis with respect to internal controls relating to assertions having a material effect on the financial statements

• To present a written assessment of the effectiveness of the company’s internal control over financial reporting as of the end of the company’s most recent fiscal year

• To evaluate the effectiveness of the company’s internal control over financial reporting using suitable criteria

• To accept responsibility for the effectiveness of the company’s internal control over financial reporting

  8. The third phase of the audit involves performing audit tests. The primary purpose of this step is to obtain evidence about the?

• integrity of management.

• effectiveness of management.

• effectiveness of the internal control structure and fairness of the financial statements.

• effectiveness of the internal control structure.

  9. Which of the following assertions is NOT made by management in placing an item in the financial statements?

• Rights and obligations

• Presentation and disclosure

• Direct controls

• Existence or occurrence

  10. When evaluating the planned level of substantive tests for each significant financial statement assertion, the auditor will consider the evidence obtained from all of the following EXCEPT

• assessing inherent risk.

• assessing detection risk.

• evidence of effectiveness of computer control procedures and related follow-up.

• procedures to understand the business and industry, and related completed analytical procedures.

• evidence about the effectiveness of internal controls gained while obtaining an understanding of internal controls.

  11. Probability-proportional-to-size (PPS) sampling should NOT be used when

• the number of units in the population is unknown at the start of sampling.

• book values for sampling units are not available.

• the variability of the population is unknown.

• transactions and balances are tested for overstatement.

  12. Specific audit objectives are normally

• derived from the categories of management’s financial statement assertions.

• the same as the categories of management’s financial statement assertions.

• developed for each item in the financial statements and derived from the categories of management’s financial statement assertions.

• developed for each item in the financial statements.

  13. When setting the level of materiality on a particular engagement, the auditor must consider

• both the unique circumstances pertaining to the entity and the users’ information needs.

• the users’ information needs.

• neither the unique circumstances pertaining to the entity nor the users’ information needs.

• the unique circumstances pertaining to the entity.

  14. The completeness assertion would be violated if

• unbilled shipments occurred during the period.

• disclosure in the statements of pledged receivables was inadequate.

• the allowance for doubtful accounts was understated.

• fictitious sales transactions were included in accounts receivable.

  15. The risk that a material misstatement that could occur in an assertion will NOT be prevented or detected on a timely basis by the entity’s internal controls is

• audit risk.

• inherent risk.

• control risk.

• rejection risk.

  16. Before accepting an engagement, the auditor should evaluate whether other conditions exist that raise questions as to the prospective client’s auditability. Which of the following factors would be least likely to cause concern about an entity’s auditability?

• Important evidence available only in electronic form

• Related party transactions

• Lack of audit trail

• Disregard of responsibility to maintain adequate internal controls

  17. In the audit risk model, audit sampling applies to

• detection risk.

• control risk and detection risk.

• inherent risk and control risk.

• inherent risk and detection risk.

  18. An inaccurate form of the audit risk model would show that

• detection risk may be determined from audit risk, inherent risk, and control risk.

• increases in control risk will cause decreases in detection risk.

• detection risk is inversely related to inherent risk.

• detection risk is inversely related to audit risk.

• audit risk is directly related to all other risks in the model.

  19. There are several paragraphs in the auditor’s standard report in internal control over financial reporting. Which paragraph defines internal control over financial reporting?

• Inherent limitations

• Definition

• Introductory

• Scope

  20. If reported sales for 2010 erroneously include sales that occur in 2011, the assertion violated on the 2010 statements would be

• valuation or allocation.

• existence or occurrence.

• completeness.

• presentation and disclosure.

  21. Which of the following is NOT a characteristic of management’s philosophy and operating style?

• Conscientiousness and conservatism in developing accounting estimates

• Monitoring policies for developing and modifying accounting systems

• Approach to taking and monitoring business risks

• Its attitudes and actions toward financial reporting

  22. To emphasize the importance of integrity and ethical values among all personnel or an organization, the chief executive officer and other top managers should do all of the following EXCEPT

• communicate to all employees.

• send e-mail messages to all employees, promoting ethical values.

• reduce or eliminate incentives and temptations.

• set the tone by example.

  23. Auditor changes result from a variety of factors EXCEPT

• mergers between CPA firms.

• mergers between corporations with different independent auditors.

• satisfaction with a firm.

• a desire to reduce the audit fee.

  24. Anyone identified to the auditor by name prior to the audit who is the principal recipient of the auditor’s report is a

• foreseen beneficiary.

• foreseeable party.

• third party.

• primary beneficiary.

  25. Which of the following requires managing public companies to assess the adequacy of internal controls over financial reporting and further requires auditors to audit management’s assessment of internal controls over financial reporting and the actual effectiveness of the system of internal controls?

• Securities Exchange Act of 1934

• Section 404 of Sarbanes-Oxley

• SAS 55

• Foreign Corrupt Practices Act

  26. Which of the following is NOT one of the factors that make up the control environment?

• Board of directors and audit committee

• Organizational structure

• Accounting personnel

• Human resource policies and practices

  27. With respect to audit objectives, the term validity relates to which of the assertions below?

• Existence and occurrence

• Completeness

• Presentation and disclosure

• Valuation or allocation

  28. Statements on auditing standards (SAS) are interpretations of what?

• Generally accepted auditing standards

• Generally accepted accounting principles

• Generally accepted accounting policies

• Generally accepted auditing services

  29. “A significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected” is the definition of a

• material weakness.

• material misstatement.

• significant deficiency.

• control deficiency.

  30. Which of the following is NOT one of the four basic functions of every transaction?

• Consideration

• Recording

• Delivery and receipt

• Initiation

  31. The Foreign Corrupt Practices Act is administered by the

• IRS.

• SEC.

• Central Intelligence Agency.

• National Commission on Fraudulent Financial Reporting.

  32. Which of the following is an INCORRECT quotation from the second field work standard?

• “A sufficient understanding…”

• “determine the nature, timing, and extent of compliance tests…”

• “of the internal control structure is…”

• “to be obtained to…”

  33. In a normal audit, the relationship between the level of materiality used to plan the engagement and the level of materiality used to evaluate evidence is that

• the former may be higher or lower than the latter.

• the former is higher than the latter.

• they must be identical.

• the former is lower than the latter.

  34. In performing tests of details of balances, the auditor would obtain the bank statement directly from the bank, prepare the bank reconciliation, and verify all reconciling items and mathematical accuracy if detection risk was

• high.

• very high.

• very low.

• moderate.

  35. Internal auditors are primarily involved with

• financial statement audits.

• compliance audits and operational audits.

• compliance audits.

• operational audits.

  36. Which of the following is NOT an example of incompatible duties?

• The individual who prepares the bank deposit also takes it to the bank.

• The individual who approves the vouchers signs and mails the checks.

• The warehouse manager maintains the perpetual inventory records.

• The authorized check signer prepares the bank reconciliation.

  37.  Which of the following necessary controls would address a potential misstatement arising from a voucher being paid twice?

• Electronic cancellation of vouchers and supporting information when a check is issued

• A computer comparing the sum of checks issued with the entry to cash disbursements

• Periodic independent bank reconciliations

• Separate duties for approving payment vouchers and sighing checks

  38. The five management assertions outlined in generally accepted auditing standards include all of the following EXCEPT

• rights and obligations.

• presentation and disclosure.

• materiality.

• existence and occurrence.

  39. The susceptibility of an assertion to a material misstatement, assuming there are no controls, is

• analytical procedures risk.

• audit risk.

• control risk.

• inherent risk.

  40. The Securities Act of 1933 is also known as the

• Truth in Lending Act.

• Truth in Securities Act.

• Sale of Securities Act.

• Great Depression Act.

  41. In planning the audit, the auditor should assess materiality at two levels:

• preliminary and final.

• account balance and detailed item.

• company and divisional.

• financial statement and account balance.

  42. Audit sampling is involved whenever an auditor

• makes an inference about a population characteristic based on a partial examination of that population.

• examines 100% of the population.

• performs tests of controls.

• performs tests of details.

 

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You have been assigned to a team that has the responsibility of preparing a paper consisting of 1,750 words for the governor’s next economic conference. Your paper should address the following:

• Explain why equilibrium of supply and demand is desirable.
• Explain the following concepts using the concept of consumer and producer surplus:
  • Efficiency of markets
  • Costs of taxation
  • Benefits of international trade
• Discuss how externalities may prevent market equilibrium and the various governments policies used to remedy the inefficiencies in markets caused by externalities.
• Analyze the difference between the efficiency of a tax system and the equity of a tax system as it refers to the costs imposed on taxpayers using the benefits principles.

Cite a minimum of 3 peer-reviewed sources, not including your textbook.

Format consistent with APA guidelines.

 

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