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It is common for an entity to have transactions with related entities

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It is common for an entity to have transactions with related entities ? some of which are fully owned, some of which share common ownership, but are not otherwise related, and others where ownership is small but there is control.;A. Devine related-entity transactions and describe the appropriate accounting for related-entity transactions. In your answer consider the following;? Parent-subsidiary transactions;? Affiliated entity transactions ? owned by some owner (not a corporation);? Joint venture transactions;? Special purpose entity transactions;? Entity transactions with CEO (other than payroll);B. There are two basic approaches to auditing related-entity transactions. Describe;the approaches and evaluate the strengths and weaknesses of each approach.;C. Tyco is a conglomerate organization that had $36 billion in revenue. In a court trail, it was alleged that the CEO of the organization used corporate funds;? For a private birthday party (over $1 million);? To lavishly furnish an apartment in New York City;? To pay domestic help for taking care of the apartment;? To make loans to key executives that were subsequently forgiven by the CEO;1. What audit procedures would have identified these transactions?;2. It is reasonable o expect an audit to uncover these types of transactions in a $36 billion company?;3. Should the auditor look for these types of transactions in every audit? Is it reasonable for auditors to look or such transactions?;4. What controls should an organization like Tyco implement to ensure that such transactions do not take place in the future?;Attachment Preview;15-39 Related Entity Transactions.doc Download Attachment;It is common for an entity to have transactions with related entities some of which are;fully owned, some of which share common ownership, but are not otherwise related, and;others where ownership... Show more

 

Paper#25015 | Written in 18-Jul-2015

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