ppt pengauditan 1
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Case 2.2
Waste Management:Due Care
Copyright 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
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Waste Management CaseRelevant Technical KnowledgePCAOB QC #20 - Paragraph #3A firm has a responsibility to ensure that its personnel comply with the professional standards applicable to its accounting and auditing practice. A system of quality control is broadly defined as a process to provide the firm with reasonable assurance that its personnel comply with applicable professional standards and the firm's standards of quality.*
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Waste Management CaseRelevant Technical KnowledgePCAOB AS #13 - Paragraph #7auditor's responses to the assessed risks of material misstatement, particularly fraud risks, should involve the application of professional skepticism in gathering and evaluating audit evidence.*
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Waste Management CaseRelevant Technical KnowledgeSARBOX Section 203the lead audit or coordinating partner and the reviewing partner must rotate off of the audit every 5 yearsSARBOX Section 206requires a one year cooling off period before an audit firm employee accept a position as CEO, CFO, Controller, or Chief Accounting Officer of a former client
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Psychology Literature - How to Best Acquire KnowledgeFeature Repeated Case Experiences with Feedback; andTeach Technical Concepts within Real-Life ContextsConsider the following additional cases:Enron: IndependenceThe Fund of Funds: IndependenceSunbeam: Due CareWorldCom: Professional Responsibility
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Epilogue Waste ManagementArthur Andersen and WMI paid $220 million to settle shareholder suits
WMI restated earnings, which caused a $6 billion decline in the value of the company shares*
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Epilogue Waste ManagementTop WMI executives were barred from acting as directors of public companies ranging from a few years to indefinitely
Arthur Andersen partners related to the engagement were barred from auditing public companies ranging from 1 to 5 years
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