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    Case Study: Roles of Management in Regulatory Compliance

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    Case Study: Roles of Management in Regulatory Compliance

    You are preparing for the final exit meeting with Anthony's Orchard. You have probably met with management at various stages throughout the audit. Now it is time to meet with the senior management and the board to review and provide the audit findings and conclusions. You will also need to outline any concerns so management can develop action steps to eliminate those concerns.

    • Given the limited information from previous weeks, what kind of opinion would you give to Anthony's Orchard?

    • Depending on the type and complexity of the company, regulatory compliance may also involve one or more auditors. These may include an outside or independent accounting firm and/or local, state, and federal agencies. Evaluate the impact of involving additional auditors, outside auditors, or government agencies in regulatory compliance.

    • As you prepare, think about the entities that could be involved in the auditing process. What are their roles in auditing Anthony's Orchard?

    • How would Anthony's Orchard build transparency into their governance and compliance systems?

    • What are the roles of management and the board? What controls have been put in place to comply with the Foreign Corrupt Practices Act (FCPA) to prevent bribery and corruption?

    • Which regulatory agencies and which rules and regulations would be part of the overall management of compliance for Anthony's Orchard?
    Be sure to include in your paper, information from, but not limited to, the Foreign Corrupt Practices Act, the Sarbanes-Oxley Act, SEC, PCAOB, and any other regulatory agencies that may have an effect on Anthony's Orchard.

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    Solution Preview

    Step 1
    Given the limited information from previous weeks, the auditor's report that will be submitted will be a disclaimer of opinion. There is limitation of scope which is imposed by client; as a result the auditor is unable to obtain sufficient appropriate audit evidence. According to the law, if there are significant scope limitations, whether intentional or not which hinder the auditor's work in obtaining evidence and performing procedures. The problems created by the employees and partial support provided by the management is the cause of scope limitations.

    Step 2
    Since Anthony's Orchard is a public company, it must appoint an external auditor who performs an audit in accordance with specific laws or rules on the financial statements of a company. The stakeholders of Anthony's Orchard such as the investors, government agencies, and the public rely on the external auditor to present an unbiased and independent audit report. The external auditors must be certified public accountant who may perform audits and attestations on an entity's financial statements and provide reports on such audits for public review. An external auditor is required to comply with stringent requirements set by Sarbanes -Oxley Act. He is required to evaluate internal controls and financial reporting. The auditor must be independent.

    Step 3
    There are several entities that are involved in the auditing process. First Anthony's Orchard is ...

    Solution Summary

    This solution explains role of management in regulatory compliance. The sources used are also included in the solution.