Case Analysis

Case Study
Unit 0
Travis Kresse
Strategic Financial Analysis
Professor: Bob Underwood
Date: August 9, 2006

Case Study 1-10 and 2-2
Case 1-101
  a) The Sarbanes-Oxley Act refers to “the Commissions” in several sections. To what Commission is the Sarbanes-Oxley Act referring?
  b) Describe the responsibility of the Commission in relations to the “Board”.
  c) Describe the Board.
  d) Describe the duties of the board.
  e) Who must register with the board?
  f) Describe the Board’s responsibility as to the inspection of those registered with the Board.
  g) Describe the responsibilities of the Board in relation to auditing standards.
  h) Contrast the applicability of the Sarbanes-Oxley Act to domestic public accounting firms versus foreign public accounting firms.
  i) Describe the recognition of accounting standards by the Commission as provided.
  j) Comment on the funding for the:
  1. Board.
  2. Financial Accounting Standards Board.
  k) Describe the prohibited activities of the independent auditor. Can the independent auditor perform tax services for an audit client?
  l) Describe management’s responsibility in relation to internal controls.
  m) Speculate on why Title IV, section 404, “Management Assessment of Internal Controls,” has received substantial criticism.

Case 2-2
  a) Time, laws, regulation, and professional standards have restricted accounting practices to those that are moral, ethical, fair, and precise. Comment.
  b) Most managers surveyed had a conservative, strict interpretation of what is moral or ethical in financial reporting. Comment.
  c) The managers surveyed exhibit a surprising agreement as to what constitutes an ethical or unethical practice. Comment.
  d) List the five generalizations form the findings in this study relating to managing earnings.
  e) Comment on management’s ability to...