ACCT_3444_Chapter_1_and_2 - Accounting 3444 Week 1 Lecture...

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Accounting 3444 Week 1 Lecture 1: Course Introduction, Chapter 1&2, ideas, concepts, opinions Opening comments regarding the following: course presentation (dates), term paper directions, course presentation, course policies, office hours etc., survey. Course focuses on auditing principles and internal control with an emphasis on audit reporting, standards, techniques and procedures. Big Picture perspective is essential! Need to consider impact of accounting transactions on audit risk and be able to recommend appropriate audit procedures to mitigate that risk. Ice Breaker- In Class Exercise Telus 2009 Financial Report Working in groups of four answer the following questions: A. Why does Telus produce annual financial statements? B. As a shareholder, what are the risks of a financial investment in the shares of Telus? C. Why would shareholders want Telus to pay additional costs, reducing company overall profitability, to have a third party review the financial statements? D. Identify a list of five internal and five external factors that would impact Telus’ operating performance. E. Review the company’s financial statements for 2009. What areas would you like to be able to get more information about? Specifically identify areas that are big dollar amounts, have big year over year changes or line items that seem weird or unusual. F. If given the opportunity, what are some questions you would like to ask Robert McFarlane, the VP and CFO?
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Chapter 1 – The Demand for An Auditing and Assurance Profession Professional Accountants – Roles and Responsibilities Professional accountants provide examinations of controls, audit financial statements and help businesses become more successful Auditors are valued because of their technical knowledge and independence in providing an opinion on a company’s financial statement for shareholders, as well as their competence and experience in assisting companies improve their operations. Why an Audit? …… User Demand for Reliable Information Accounting recording, classifying and summarizing economic events in a logical manner for the purpose of providing financial information for decision making Internal & external users perspective – impact of conflicting objectives Consider remoteness of info/ bias of provider…. Like buying a used car….. Auditing Obtaining an external expert’s opinion on the quality of the financial reporting of a company Auditors obtain evidence to determine whether the information in the financial statements is reliable. They then report on the reliability by expressing an opinion that the company’s presentation of the financial position and results of operations is in line with GAAP. Auditor must be qualified to understand the criteria used and be competent to understand the types and amount of information Therefore, there is verification of data by someone else other than the preparer, which lends credibility to the info.
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