Questionable payments, Auditing

Questionable Payments

In some countries, business is often gained by bribing ministers or public officials or officers of companies or firms with whom one wishes to do business. In reality bribery and corruption are a way of life in several business communities.  This is the general area of questionable payments, which may include "commissions, generally based on the amount of business placed". Whenever an auditor determines such payments, he has to believe what course of action to take. In common, the following conduct by the auditor is suitable.

(1) He should satisfy himself that the payment is as stated and that he has been told the whole story;

(2) He should satisfy himself that the payments were genuinely made in furtherance of the client's business;

(3) He has to satisfy himself that all directors of the company were aware of the payment and its purposes;

(4) He has to obtain a letter of representation, signed by all the directors to confirm (c);

(5) If the client is a subsidiary, then he has to ensure that the holding company and the primary auditors are aware of the payment and;

(6) He has to consider whether disclosure is required. Generally disclosure is not essential since such payments are seldom material in the context of the company' accounts as an entire and usually a true and fair view is given without disclosure.

Posted Date: 12/3/2012 5:10:18 AM | Location : United States







Related Discussions:- Questionable payments, Assignment Help, Ask Question on Questionable payments, Get Answer, Expert's Help, Questionable payments Discussions

Write discussion on Questionable payments
Your posts are moderated
Related Questions
Procedures in computing the work of the expert The auditor must obtain reasonable assurance that the expert's work constitutes appropriate audit evidence in support of the fina

Auditors Procedures Before Stock Taking 1) Study of the clients stock taking recommendations and instructions for improvements or changes whether the auditor considers them in

Sufficiency - Sources of evidence The audit evidence should in total enable the auditor to form an opinion on the financial statements.  Sufficiency is a measure of evidence o

Ask question #Mini mum 100 words acMr. Howe, a Junior Partner of the CPA firm Dewey, Cheatem, & Howe (DCH), after noting that there is a proposal to limit Auditor liability is ver

factors that influence auditors judgement on sufficiency of audit evidence

IAS 40 Investment Properties - Audit Evidence Typical audit evidence might include: Physical verification of the situation and location of the investment property and c

The Concept of Audit Evidence Auditing is an evidence gathering exercise. It is an exercise carried out to confirm the assertions made by the management in carrying out the man

A. Board of Directors Best Buy's Board is elected by the shareholders to oversee the business and affairs of the company.  The board counsels, advises and oversees management wi


Assessment Criteria Sheets Risk analysis report Subject Learning Outcome: To examine techniques used by auditors, including risk analysis, evidence collection and evaluation Below