Rich Pugh Unit 8 Project

Rich Pugh Unit 8 Project - Unit 8 Project 14-39 A...

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Unit 8 Project 14-39 A) Related-entity transactions are transactions that involve an entity and another entity that it owns or has some interest in. A related entity could include a parent company and its subsidiaries, an entity and its owners, an entity and organizations that it has partial ownership in, and an entity and special purpose entities that may be used to hide debt off the balance sheet. B) a. Obtain a list of all related entities and develop a list of all transactions with those entities during the year. A weakness of this approach on its own is that the entity may want related entities undiscovered due to a fraud cover up. Carefully hiding these transactions would make this approach alone unreliable. The strength of this approach is it is able to find all related entities of the company and determine their relationship with the entity being audited. Finding the company is being truthful with the entities it is involved in should lead to truthful reporting of the transactions recorded between them. b. Carefully examine all unusual transactions, especially those near the end of the quarter or end
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This note was uploaded on 08/22/2011 for the course AUDITING AC410 taught by Professor Prof during the Spring '11 term at Kaplan University.

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Rich Pugh Unit 8 Project - Unit 8 Project 14-39 A...

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