Accounting essay模板:Price Waterhouse Coopers (PWC) Audit Scandal and Fraud

发布时间:2022-04-22 13:18:00 论文编辑:zeqian1013

本文是会计专业的Essay范例,题目是“Price Waterhouse Coopers (PWC) Audit Scandal and Fraud(普华永道(PWC)审计丑闻和欺诈)”,萨班斯-奥克斯利法案(SOX)于2002年7月5日在美国生效。该法律的创建是为了解决公众所有公司审计中普遍存在的缺陷(Hoitash, Hoitash & Bedard, 2008)。萨班斯-奥克斯利法案(萨班斯-奥克斯利法案)通过上市公司会计监督委员会(PCAOB)建立了一个监督和规范审计的机构。该机构招募审计人员执行法律,打击公司官员的盗窃和欺诈行为。打击全球知名审计公司普华永道(PWC)的丑闻于2009年1月首次被发现。分析师指出,这是印度历史上涉及公司审计的重大丑闻之一(《经济学人》,2009年)。该公司首席执行官披露了这一欺诈行为,他表示,在很长一段时间内,他一直在夸大公司的财务报表,以显示大约10亿美元的利润。这项研究给出了一个全面的看这个丑闻普华永道(普华永道)在他们的审计公司的失败。

Introduction介绍

The Sarbanes-Oxley Act (SOX) is an Act that came into force on the 5th of July 2002 in the United States. The law was created in order to fix the flaws that were prevalent in the auditing of public owned companies (Hoitash, Hoitash & Bedard, 2008). The Sarbanes-Oxley Act (SOX) created a body to oversee and regulate auditing through the Public Company Accounting Oversight Board (PCAOB). The body enlists auditors to enforce laws against theft and fraud by corporate officers. The scandal that hit Price Waterhouse Coopers (PWC) which is a renowned audit firm across the globe was first discovered in the month of January 2009. Analysts have indicated that this was one of the mega scandals involving the audit of companies in the history of India (The Economist, 2009). The company CEO disclosed the fraud when he indicated that for quite some time, he had been inflating the company’s financial sheets to show profits amounting to approximately 1 billion dollars. This study gives a comprehensive look at this scandal the failures of Price Waterhouse Coopers (PWC) in their audit of the company.

 会计essay怎么写

Requirements of SOX that have reduced corporate fraudulent activity减少了公司欺诈活动的SOX的要求

The requirements of Sarbanes-Oxley Act (SOX) have reduced the intensity at which corporate fraudulent activities occur. This has been made possible by the various requirements that are available in the Act. Under section 103 of the Act, through the creation of the Public Company Accounting Oversight Board (PCAOB), certain internal control measures were introduced (Romano, 2004). It states that by rule any audit firm is required to consider standards established by one or more professional bodies and it bears the sole responsibility of making amendments to such standards. In so doing, each registered public accounting firm shall prepare and maintain for a period not less than 7 years audit paper works and any other information that they may have that relates to audit reports (Hoitash, Hoitash & Bedard, 2008). Secondly, they should provide a concurring partner review concerning audit reports. Thirdly they should describe in each audit report, the scope of the auditor’s testing of the internal control structures and procedures as is required by the issuer under section 404 (b).

萨班斯-奥克斯利法案(萨班斯-奥克斯利法案)的要求降低了公司欺诈活动发生的强度。这是由于该法所规定的各种要求而得以实现的。根据该法案第103条,通过创建上市公司会计监督委员会(PCAOB),引入了某些内部控制措施(Romano, 2004)。它指出,根据规则,任何审计事务所都必须考虑一个或多个专业团体制定的标准,并承担对这些标准进行修订的唯一责任。在此过程中,每一家注册会计师事务所应准备并保存不少于7年的审计文件和他们可能拥有的与审计报告有关的任何其他信息(Hoitash, Hoitash & Bedard, 2008)。第二,它们应提供关于审计报告的共同合伙人审查。第三,它们应在每一份审计报告中说明审计员根据第404 (b)条发行人的要求对内部控制结构和程序进行测试的范围。

Section 201 to 209 is dedicated to the analyses of auditors. Section 201 (h), talks about the ability of a company to engage in non-audit functions. In this case, such an external audit firm is required to first acquire an approval from the audit committee of an issuer according to subsection (i), such a law is very prohibitive to some extent an audit company cannot engage in some fishy kind of business (Hoitash, Hoitash & Bedard, 2008). The extent to which an external auditor could effectively provide their services was limited by Section 203 subsection (j) which subjects a company to an Audit Partner Rotation which makes it illegal for a public firm to provide audit services to an issuer if the lead partner or the auditor in charge of reviewing the audit had performed audit services for that particular issuer in each of the previous 5 fiscal years for that particular issuer (Romano, 2004). This requirement, impacted companies negatively in that they could not entrust their audits on one particular company. This meant that they had to seek new auditors from time to time.

The auditors were also impacted negatively in that they could not have their own customers who relied on their particular services this means that an audit firm has to continuously seek new markets for its services (Hoitash, Hoitash & Bedard, 2008). This was geared at reducing the instances of fraud. Auditor independence under section 208 was severely contravened under this section; it was illegal for an audit form to issue an audit report with respect to an issuer if the firm engages in any activity that the issuer may have prohibited (Romano, 2004). Some of the prohibitions were rigorous under section 10A of the Securities Exchange act of 1934 thus the scope of work that these auditors could do was highly reduced. Through these provisions, the Sarbanes-Oxley Act (SOX) has been able to curb fraudulent activities in companies and thus all market players are more assured of financial security and are assured of safe business practises.

PWC audit of Satyam Computer Services Limited普华永道审计萨蒂扬电脑服务有限公司

The Satyam Computer Services fraud came to light in January 2009. This was the biggest ever fraud known in the history of India. The scam was brought to light by the company’s CEO Mr. Raju who admitted that he had fraudulently manipulated the company’s financial statements for several years to show inflated profits and non-existent assets that totalled to $1 billion (Leahy, 2009).  It is believed that Price Waterhouse Coopers (PWC) played a role in enabling the fraud to take place. To start with, Raju admitted that he had manipulated accounts thus is enough reason to show that auditor in the firm were not keen. The auditors in the firm instead of using an independent testing mechanism used Satyam’s investigative tools and thus they compromised on laid down rules on reporting standards (The Economist, 2009). The auditors had also observed deficiency in the Information Systems and the risk to fraud. However, they chose to keep quiet over the issue and did not report these concerns to shareholders. VSP Gupta the global head of internal audit during investigations admitted that the coverage and resources of internal audit was also not commensurate to the size of the business.

萨蒂扬电脑服务公司的欺诈案于2009年1月曝光。这是印度历史上最大的诈骗案。该骗局是由公司的首席执行官拉贾先生带来的,他承认他曾欺骗性地操纵公司的财务报表好几年,以显示夸大的利润和不存在的资产,总计达10亿美元(莱希,2009年)。据信,普华永道会计师事务所(PWC)在这起欺诈案的发生中发挥了作用。首先,Raju承认他篡改了账目,因此有足够的理由表明该公司的审计师并不热衷于此。该公司的审计师没有使用独立的测试机制,而是使用了萨蒂扬的调查工具,因此他们在报告标准的规定上做出了妥协(经济学家,2009年)。审计员还注意到信息系统存在缺陷和欺诈风险。然而,他们选择对此事保持沉默,没有向股东报告这些担忧。VSP Gupta内部审计全球主管在调查期间承认,内部审计的覆盖范围和资源也与业务规模不相称。

会计essay范例

Assessment of Price Waterhouse Coopers (PWC) performance普华永道(PWC)业绩评估

Price Waterhouse Coopers (PWC) were not keen on checking the invoices neither did they have keen interest on analysing the company’s debtors which the CEO had overstated by 23 percept according to the SFIO report on the fraud (The Economist, 2009). The auditors did not independently verify cash and bank balances. If the auditors were keen on their job, they would for example check the cash in hand so as to ensure it was actually existent and also whether money in the company’s bank account had been invested properly.

普华永道(PWC)并不热衷于检查发票,也没有对分析公司的债务人有浓厚的兴趣,根据SFIO关于欺诈的报告(经济学人,2009年),首席执行官夸大了23%。审计员没有独立核实现金和银行余额。例如,如果审计人员热衷于他们的工作,他们会检查手中的现金,以确保它确实存在,以及公司银行账户上的钱是否被正确投资。

In serious auditing, there is usually the need to physically verify the assets owned by the company rather than merely relying on books of accounts prepared by the company (The Economist, 2009). There is also enough evidence of sort to show that the auditors had prior knowledge of the fraud. This is because in the financial year 2007-2008, PWC received a fee of 4.3 core which is almost twice what they charged this is enough evidence to show that they were being lured to give the company a clean bill of health (The Economist, 2009). Thus the auditors were not independent and their decisions had already been influenced.

Price Waterhouse Coopers (PWC) audit and control structures普华永道(PWC)的审计和控制结构

PWC heavily relied on internal control structures to carry out the audit for example the auditors rather than use an independent testing mechanism used Satyam’s investigative tools (Leahy, 2009). This shows that the auditors were not keen in their work and thus they used an already established mechanism in the company rather than building their own computer aided testing tool that would have ensured that they had sealed all the loop holes that were created by the company and thus they would have used their independent tool to carry out the audit efficiently.

普华永道严重依赖内部控制结构进行审计,例如审计师使用Satyam的调查工具,而不是使用独立的测试机制(Leahy, 2009)。这表明审计师并不希望在他们的工作,因此他们使用一个公司已经建立了机制而不是建立自己的计算机辅助测试工具,确保他们有密封是由该公司的所有漏洞,因此他们会用他们的独立工具来执行审计效率。

In any case, any company whether they have an intention of committing a fraud or not, would not have an efficient audit tool since they would fear that it would work against them thus it would be in their best interests to seal such loop holes. The auditors also saw loop holes in the Information Systems but overlooked such issues since they believed that the company had reliable internal control which was not the case (Niazi & Ali, 2015). This is enough evidence that PWC relied heavily on the company’s internal control structures.

The audit committee of any company is to ensure transparency in the business operations. In this case, it means that financial statements and financial disclosures provide the correct and appropriate information and a credible picture. Also internal control systems need to be in place to ensure fraud cases do not go unnoticed. PWC did not check the internal control structures present in the company yet it heavily relied on it.

The audit firm was not keen on looking at the transactions of the company and thus only looked at the books of accounts of the company without themselves taking an initiative of looking at them and thus assumed what the book accounts read was the actual state of affairs in the company (Niazi & Ali, 2015). This is well evidenced by that the audit firm did not carry out a physical analysis for a large sum of money that added up to Rs. 5040 crore  thus the auditors played an active role in penetrating fraud by giving the company a clean bill of health yet the audit reports had been doctored and contained cooked values. Thus the auditors should have been responsible and taken their job seriously and would have physically examined the company’s accounts of assets and liabilities.

审计事务所并不热衷于看公司的事务,因此只看着书的公司账户没有自己采取主动的看着他们,因此假定账户读的书是什么公司的实际状况(Niazi &阿里,2015)。这也证明了这一点,审计公司没有进行物理分析的一大笔钱加起来Rs。5040卢比的因此,审计师发挥了积极作用渗透舞弊给公司清洁健康但审计报告被窜改和包含煮熟的值。因此,审计人员应该负责任,认真对待他们的工作,应该亲自检查公司的资产和负债账目。

The firm should have sort to know the actual money that the company had at hand and also checked with the company’s banker to ensure the amount of money in the company’s account was the actual value that had they had stated and also they would have analysed how the money that had been spent had been used (Leahy, 2009). If for example an asset had been acquired using the money such an asset would have to be seen and valuation done on it to ensure that prices had not been inflated. In this way I believe the auditors failed the shareholders who relied on these auditors’ reports.

Price Waterhouse Coopers (PWC) exercise of due care普华永道(PWC)行使应有的谨慎

PWC did not meet its responsibility of due care.  According to the Sarbanes Oxley Act (SOX), directors are prohibited from having any direct involvement in the company’s operations. However the auditor’s in this case were not keen and thus most of the directors ended up being participating in the operations of the company this was a case of carelessness on the part of the auditors since they would have noticed this red flag and would have advised the company and its stakeholders appropriately (Leahy, 2009).

普华永道没有履行其应有的注意责任。根据萨班斯奥克斯利法案(SOX),董事被禁止直接参与公司的运营。然而审计师的在这种情况下并不热心,因此大多数的董事最终参与公司的业务这是一个粗心大意的情况下的审计人员,因为他们会注意到这个红旗并适当地将建议公司及其利益相关者(莱希,2009)。

The auditors also betrayed the boards trust by authenticating financial reports without taking up the responsibility of ensuring that those reports were a true documentation of what the company’s accounts read. They highly relied on the book of accounts provided to them by the company and did not take an initiative of investigating whether these reports were truthful (Niazi & Ali, 2015). The auditors used the company’s audit tools rather than coming up with their own tool this was another let down since an audit firm should not depend on the internal controls of any company since they may have loopholes but such companies should come up with their own audit tools which are not subject to manipulation by outside forces (Niazi & Ali, 2015).

The improvements needed to external auditing firms and the accounting profession需要对外部审计公司和会计行业进行改进

External auditing firms need to adopt operation standards whereby they need to maintain high discipline and degrees of ethics. In this case, the audit firms should maintain independence when carrying out audits (Niazi & Ali, 2015). Such auditors should not allow internal influence to outline their operational road map rather they should shape the sequence of operations to ensure operations are based on openness and integrity. An External Auditor should also come up with an appropriate auditing tool based on the company on which it is carrying the audit. Such a tool should be tailor made for each company and should always be checked from time to time to ensure that there are no intrusions to the system (Niazi & Ali, 2015).

外部审计公司需要采用的操作标准,他们需要保持高纪律和道德程度。在这种情况下,审计事务所在进行审计时应保持独立性(Niazi & Ali, 2015)。这种审计员不应让内部影响来勾画其业务路线图,而应确定业务的顺序,以确保业务的基础是公开和完整。外部审计师还应根据其进行审计的公司提出适当的审计工具。这样的工具应该为每个公司量身定制,并且应该经常检查,以确保系统没有入侵(Niazi & Ali, 2015)。

They should also do away with the notion of believing what the internal auditors tell them and what the book of accounts contain rather it is upon them to do their own independent audit and their results compared to those the company has provided and discrepancies addressed thereafter (Leahy, 2009). Also provisions of SOX need to be given more power and bigger penalties for non-compliance introduced so that a provision like, that a single auditing firm cannot work in the same company year in and year out is obeyed so that discrepancies with an audit firm can be realised by another auditing firm that audits the company.

Conclusion结论

In summary, it is important to point out that audit firms have the mandate to ensure that they report details on their client’s financial status in a transparent and open manner. This way, most of the issues that are encountered later when the flaws are detected can be avoided. Price Waterhouse Coopers (PWC) did not pay the due diligence in their audit of Satyam. The firm heavily relied on information from individual auditors at the company rather than the available control structures. This was a major failure on their part. It is important that the provisions of the Sarbanes-Oxley Act (SOX) are fully put into force so as to ensure that proper reporting and disclosure of the audit reports is prevalent in all public owned companies.

总之,必须指出的是,审计公司有义务确保以透明和公开的方式报告客户的财务状况细节。通过这种方式,可以避免稍后发现缺陷时遇到的大多数问题。普华永道(PWC)在审计萨蒂扬时并未进行尽职调查。该公司严重依赖公司内部审计人员提供的信息,而不是现有的控制结构。这是他们的一个重大失败。重要的是,萨班斯-奥克斯利法案(萨班斯-奥克斯利法案)的规定充分实施,以确保适当的报告和披露的审计报告是普遍存在于所有上市公司。

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