Auditing Reflection - 1208 Words

INTRODUCTION This report consists of 5 reflections related to auditing standards and each case was extracted from internet sources. The purpose of this report is to reflect and understand each case. REFLECTIONS First reflection is on China sky case for its non-compliances with SGX. Next is the case on corporate governance where new rules were proposed to improve risk management and risk control. Third will be the extracted information of executives’ compensation in Australian companies. Then, the forth reflection is talking about the famous McKesson Robbins scandal. Lastly, it was a reflection on China Shenghuo Pharmaceutical Holdings,Inc, a trade receivables fraud was detected by Cohen Milstein.†¦show more content†¦Hence, auditors will reduce reliance on substantive tests of transactions and account balances. 5 REFLECTION 4 a) The McKesson Robbins scandal was one of the famous financial frauds of the 20th century. In 1925, the company McKesson Robbins was taken over by Philip Musica in 1925 whose assumed name F. Donald Coster, to conceal his criminal record and true identity. He used his bootlegging profits from his another company Adelphi Pharmaceutical Manufacturing, to buy over McKesson Robbins and he was successful in expanding the company. With 2 brothers in-charge of McKesson Robbins shipping department and assistant treasurer, and the other brother placed outside the company, they have generated bogus sales documentation. Despite the success, the bogus sales were then discovered by its treasurer. The Securities and Exchange Commission opened an investigation and Musica committed suicide before he was arrested. b) The company had a fictitious asset of 19milion, which consists of inventories, accounts receivable, and cash. 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