PRIVATE ACCOUNTING STANDARDS

1. What qualities of IAF components i.e. competence and objectivity are found to deter management misconduct?

            Private accounting regular setters believe that elevated excellent internal audit role act as a key source that is used to audit board for verifying leading supervision in the administration.  However, IAF qualities are not enforced by the regulators but rather a complex assess of IAF value is unconstructively linked by the possibility of managing misconduct yet after scheming for board, audit working group and exterior auditor eminence. Integrity, due respect and competence are important components in any professional accounting organization. Integrity deals with the act of an employee to maintain high standards of achievement and conduct. However with the current changes in our organizations the conduct is largely affected by bribery misconduct which hinders one from upholding integrity. Competence deals with the ability of an employee to have the required level of education qualification, skills and intelligence to allow him to add worthiness to his work. Objectivity in the other hand makes certain that biased assessments, decisions and judgments are not made in the course of work. Due care deals with the ability of an employee to give attention to the nature of his/her work and the manner in which he/she provides the services. All these are IAF qualities that are so important and are largely affected by misconducts such as misleading disclosure put into practice, fraud in financial reports, carelessness and bribery (Ege 2015).

 

2. Explain in your opinion one component deters management misconduct but the other doesn’t.

            It is practical to say that one component of IAF can deter management misconduct independently but not affecting the other components. For instance one may have the competence that is needed in the profession be it education skills or even intelligence. But then again he might have inadequate ability to make the right judgments and he might be biased in making decisions since he/she has been corrupted. Thus he/she ends up making decisions that would favor the corruptor and thus failing to uphold objectivity and integrity.

3. Can one predict management misconduct based on the quality of its IAF

            It is quite easy to identify management misconduct based on the quality of the quality of its IAF. This is because one can be abler to evaluate each component of the IAF at a time thus being able to identify management misconduct. For instance as financial reports on auditing are taken, fraud instances can be easily noticed and the achievement status can be measured by the level of competence in management (Ege 2015).

4. Give and explain at least three reasons, discussed in the paper, as to why there are regulatory requirement to disclosure the quality of IAF.

            The core reason as to why there should be regulatory requirements is to ensure that the right employees with adequate and high competence are employed and the already employed ones are still competent in the business.

 

Another reason is to ensure that integrity amongst auditors and external auditors and the entire management is accountable for their tasks. Another reason for regulation is to ensure that the objectivity of the company that is achievement and success are attained (Ege 2015).

5. What are the major steps involved in the closing process?

            The process starts with the closing of the revenue account to a special account (income summary), then one closes the expense account into income summary, later one closes the returns summary report into retained income and finally one closes the dividends report to retained income.

6. As a management accountant, how and when will you use flash reports?

            Since flash reports represents a quick and fast picture of critical business operating and financial statistics that are used to enhance the continuing operations of the business, I would be carrying out the flash reports on a daily basis or rather weekly if the workload is large. I would ensure that I capture all types of data on client traffic stage, labor operation rates from the same source of the information coming from similar transaction base (Kuppapally 2010).

 

 

 

 

 

 

 

 

Reference

Ege, M. S. (2015). Does Internal Audit Function Quality Deter Management          Misconduct?. Accounting Review, 90(2), 495-527. doi:10.2308/accr-50871

Kuppapally, J. J. (2010). Accounting for managers. India: PHI Learning

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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