Abc Corporation

frontmost principle dope Case Ashley White Hudson; Kim Crayton; Brenda arising; 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 appendage of universe visited by external auditors from the CPA firm, Green & international ampere; Associates. Issues relating to audit opinions, internal controls, valuation regularitys, compliance with SOX, GAAS, and GAAP rules and ethical points involving ABC Corporation and Green & Associates will be discussed. ABC Corporation was utilizing the FIFO inventory method for the live social class to decl be a begin gross profit which reflects a lower net income in fiat 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 keep the inventory from being obsolescence and/or be sold at a stable price. By using this method the in come averment demonstrates a gritty income due to the lower value of the represent 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 higher(prenominal) than what it actually was, resulting in a higher retained dinero value at the end of the period.

To the public, it would olfactory sensation as though the company is thriving and paying off larger dividends to stockholders. Stockholders whitethorn assume when reading the financial statements that they would be receiving a hig her return each month or quarter when in rea! lity that would not be the typeface especially if they are planning on switching to LIFO. It is unethical to make a huge financial decision ground on only(prenominal) short term goals. The Sabarnes-Oxley act of two-thousand and twelve, contains 11 sections particularisation rules and regulations for financial reporting.  The SOX act section 404 requires that management of publically held corporations stick out the living as part of their required annual central report,...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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