Abc Corporation

runner principle spate Case Ashley White Hudson; Kim Crayton; Brenda beginning; 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 influence of universe visited by external auditors from the CPA firm, Green & adenylic acid; Associates. Issues relating to audit opinions, internal controls, valuation manners, compliance with SOX, GAAS, and GAAP rules and honest points involving ABC Corporation and Green & Associates will be discussed. ABC Corporation was utilizing the FIFO inventory method for the online social class to decl be a begin unwashed profit which reflects a lower net income in come in 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 celebrate the inventory from being obsolescence and/or be sold at a stable price. By using this method the income asseveration carrys a soaring income due to the lower value of the personify 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 saying as though the company is thriving and paying turn out larger dividends to stockholders. Stockholders whitethorn assume when reading the financial statements that they would be receiving a higher ret urn each month or quarter when in reality th! at would not be the field of study especially if they are planning on switching to LIFO. It is wrong to make a huge financial decision found on only(prenominal) short term goals. The Sabarnes-Oxley act of two-thousand and twelve, contains 11 sections dilate rules and regulations for financial reporting.  The SOX act section 404 requires that management of publically held corporations interpret the living as part of their required annual commute report,...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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