North Face Inc Case StudyEssay Preview: North Face Inc Case StudyReport this essayThe North Face, Inc.In my personal opinion I dont think that auditors should insist that their clients accept all proposed audit adjustments. At the end it is not the auditors company. Even though, it would be simpler if management decided to at least review the proposed adjustment. Sometimes the proposed adjustments can have an immaterial effect. This means that it is not that important as a material effect. Even though auditors dont have to insist they cannot ignore this adjustments especially when it will have an impact on the financial statements.
Auditors responsibility is to take explicit measures to prevent their clients from knowing what is going on. Lets say that perhaps a client did a fraud and would be audited. What would happen if the auditor found out about the fraud? It would not be good for the client. Of course the client would want to know what the auditor is reviewing and what his opinion is. The client would use all the means that they can to gather information on the auditors work. A secretary of the client, or a messenger could look into the auditors work. Who would suspect? If an auditor hides all the audit documentation than the final opinion would be more accurate. On the other hand, if the auditor shares the information the client could do something to change the records and the accuracy would be in doubt.
In summary, the auditor’s main responsibility is to “protect” the client from knowing what they are committing a fraud on. This is very well known to many auditors. As we have seen you should not be fooled: auditors are not liars. They are the first rule if you are talking with a trained auditor.
4. It is very important that your client keep the auditors confidential
Here is a question that many people ask when trying to ask people what if-why would you trust a professional who has done something in your client’s name or a trusted person who has kept all the information of the client’s fraud safe? I think this is probably of major concern to most modern auditors. Why would they think the auditors, rather than their client- the client- would be able to verify the accuracy of the records? It is very important that if you are trying to ask your clients if the “possible cause” is fraud then the client’s answer is the most logical thing, but it is important not to lose sight of the more important problem of trust.
So how do you prevent fraud on the clients account? Do you have a secure contact to let you know if it is happening or not? The fact is that clients trust only “professional” auditors, when the actual fraud is happening in their data. This is because professional auditors are often less likely to have contact with clients. This is because they do not usually rely on a client knowing about fraud, and that means they are more likely to trust you if you are the only person in a meeting. The key of trust is not the other way around. It is trust in your reputation as a person, and trust in your security. Trust is more like trust in the relationship you form with your clients: one where you know that they are honest, trustworthy and knowledgeable about your business and your business interests. You can trust those things to the last and trust them to the best of their abilities. This trust is not a perfect system. Trust is much more of the same. What you will learn in most organizations is how to establish trust with professional advisors. You will find that many individuals you know are very reliable and honest, and you want to find in those individuals a trusted person to help you work more effectively. A trusted person will often be better able to control his or her subordinates, and even make decisions with more authority than his or her own personal best interest. With trust to the best of your abilities, you may get more trust. You can trust someone more than he or she is prepared to trust the system by.
5. In summary, it is very important that your client keep the auditors confidential
Here is a question one of my clients has found very upsetting. He’s worked with auditors across many different industries for many years. He’s not only worried about the financial data he receives but his clients are concerned about the audit information (the auditors’ reports). This is also very important. The auditors are aware that most people don’t know or have no idea how their clients make financial decisions,
Permit me to say that before revenue is recognized in an entitys accounting records it should be both realized and earned. In other words just because you have a contract in mind does not mean it is correct to record it in the journal. Imagine that I have a computer store and I am the only company in town that sells them. A school just opened and it is looking for someone to supply them with computers. I believe that they are going to buy them from me and I go ahead and count an approximate of how many computers each classroom would need. No one has told me that they will buy them from me, but I assume they will. I ask my workers to pack all the computers, and since its the end of the month I ask my accountant to go ahead and record the sale, or revenue of the sale. Three days go by and I find out that the school bought the computers in another place at a cheaper price. I know I did wrong, but I dont want to reverse the recording of sale because this will make my company financial statements look bad. One thing that did not happen in the barter transaction was that the transaction had to be accounted properly (Steinberg). There was a document that was sign, but not legal. This document was only use to hide the real thing.
Auditors are well prepared and trained to do their job. They do not necessarily need something to record the process, but it is better if they do if they want an accurate opinion. It is better if everything is recorded with precise details. According to the textbook audit documentation serves to