Q1. Go to www.cfo.com or another financial website and find financial strategies that may be useful for your company and the company that you are acquiring. Go to www.irs.gov or another tax resource website. What tax strategies are available to your company and the company that you are acquiring? Let's divide our postings so that we've made some postings on the financial strategies and some on tax strategies.
Q2. Chapter 17 of the text discusses sources of financing including spontaneous and discretionary sources. Let's discuss these sources of financing and provide examples of each.
Q3. SOX granted the PCAOB investigative and disciplinary power over auditors of public companies. During the course of conducting inspections of auditing firms, the PCAOB may become aware of certain behaviors or other matters that may lead to an investigation. Such was the case when the PCAOB contacted Goldstein and Morris to inform the firm that it would begin an inspection in November 2004. Shortly after being notified of the impending inspection, the firm's managing partner, along with two other partners, determined to conceal certain information from the PCAOB.
Visit the PCAOB's website to learn about the disciplinary proceedings against the firm and the partners involved in this case, and then answer the following questions. You should read two sets of proceedings, one related to the firm of Goldstein and Morris CPAs, P.C., and the other related to Goldberger and Postelnik.
What specific client-related matters prompted Goldstein and Morris's decision to conceal certain information from the PCAOB?
What sanctions were imposed on the firm, the managing partner, and the two other partners involved in the investigation? Were these sanctions fair?
Q4. The AICPA and State Boards of Accountancy are working together to enforce the rules cited in the AICPA Code of Conduct.
Describe some of the methods used by the AICPA and State Boards of Accountancy to enforce the rules of conduct.
Q5. SAS No. 99 requires auditors to conduct a brainstorming session to discuss the potential for fraud and how the auditor might respond to the risk of fraud. The standard does not provide a great deal of guidance on how this brainstorming session should take place. Read "A Primer for Brainstorming Fraud Risks" http://www.journalofaccountancy.com/Issues/2003/Dec/APrimerForBrainstormingFraudRisks by Mark Beasley and Greg Jenkins, published in the December 2003 issue of Journal of Accountancy.
After you read the article, answer the following questions.
What are three common pitfalls that should be avoided during brainstorming sessions? How can these problems be avoided?
What are three important techniques to improve the effectiveness of a brainstorming session?
Q6. Can anyone tell us how many fraud brainstorming sessions the auditors should have, or what are the factors determine the number of sessions. Response should be 100 words minimum.