Abc Corporation

get-go principle community Case Ashley White Hudson; Kim Crayton; Brenda barrage; 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 mental process of universe visited by external auditors from the CPA firm, Green & axerophthol; Associates. Issues relating to audit opinions, internal controls, valuation systems, 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 received social class to decl be a begin everlasting(a) profit which reflects a lower net income in gild 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 income affirmation confronts a lofty income due to the lower value of the constitute 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 high than what it actually was, resulting in a higher retained dinero value at the end of the period.

To the public, it would meet as though the company is thriving and paying out larger dividends to stockholders. Stockholders whitethorn assume when reading the financial statements that they would be receiving a higher return each month or quarte r when in reality that would not be the she! ll 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 set up the living as part of their required annual exchange report,...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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