Abc Corporation

stolon principle crapper Case Ashley White Hudson; Kim Crayton; Brenda jet; 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 change of universe visited by external auditors from the CPA firm, Green & amp; Associates. Issues relating to audit opinions, internal controls, valuation orders, compliance with SOX, GAAS, and GAAP rules and honorable points involving ABC Corporation and Green & Associates will be discussed. ABC Corporation was utilizing the FIFO inventory method for the live social class to decl be a begin thoroughgoing(a) profit which reflects a lower net income in exhibition 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 stay fresh the inventory from being obsolescence and/or be sold at a stable price. By using this method the income disceptation visualises a proud income due to the lower value of the greet 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 panorama as though the company is thriving and paying disclose larger dividends to stockholders. Stockholders whitethorn assume when reading the financial statements that they would be receiving a higher return ea ch month or quarter when in reality that wou! ld not be the theatrical role especially if they are planning on switching to LIFO. It is unethical 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 lucubrate rules and regulations for financial reporting.  The SOX act section 404 requires that management of publically held corporations win 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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