American Fuel Supply Company - Free Essay Example

Sample details Pages: 7 Words: 2225 Downloads: 4 Date added: 2017/09/11 Category Advertising Essay Did you like this example? American Fuel Supply Company Inc. 1. A major focus of the lawsuit Chevron Chemical filed against Touche Ross was the auditing profession’s rules regarding the â€Å"subsequent discovery of facts existing at the date of the auditor’s report†. Those rules distinguish between situations in which a client cooperates with the auditor in making all necessary disclosures and situations involving uncooperative clients. Briefly summarize the differing responsibilities that auditors have in those two sets of circumstances. Answer: International Standard of Auditing (ISA) Section 560 Subsequent Events paragraph 15 defined that â€Å"Subsequent discovery of facts existing at the date of the auditor’s report† is where the condition when after the financial statements have been issued, the auditor becomes aware of a fact which existed at the date of the auditor’s report and which if known at that date, may have caused the auditor to modify the auditor’s report, the auditor should consider whether the financial statements need revision, should discuss the matter with management, and should take the action appropriate in the circumstances. Don’t waste time! Our writers will create an original "American Fuel Supply Company" essay for you Create order The subsequent discovery of facts requiring the recall or re-issuance of financial statements does not arise from business events occurring after the date of auditor’s report. While a number of situations may apply, the most common situation is where the previously financial statements contain material misstatements due to either unintentional or intentional actions by management. When facts are encountered that may affect the auditor’s previously issued report, the auditor should consult with his/her attorney because legal implications may be involved and actions taken by the auditor may involve confidential client-auditor communications. The auditor should determine whether the facts are reliable and whether they existed at the date of the audit report. The auditor should discuss the matter with an appropriate level of management and request cooperation in investigating the potential misstatement. Messier, Jr. , W. , Glover, S. M. Prawitt, D. F. 2008) If the auditor determines that the previously issued financial statements are in error and the audit report is affected, he/she should request that the client issue an immediate revision to the financial statements and auditor’s report. The reasons for the revisions should be described in the footnotes to the revised financial statement. (Messier, Jr. , W. , Glover, S. M. Prawitt, D. F. 2008). ISA Section 560 paragraph 16 further explained the responsibilities of the auditors in the situation when a client cooperates with the auditor in making all necessary disclosures. It stated that when management revises the financial statements, the auditor would carry out the audit procedures necessary in the circumstances, would review the steps taken by management to ensure that anyone in receipt of the previously issued financial statements together with the auditor’s report thereon is informed of the situation and would issue a new report on the revised financial statements. ISA Section 560 paragraph 17 highlighted that the new auditor’s report should include an emphasis of a matter paragraph referring to a note to the financial statements that more extensively discusses the reason for the revision of the previously issued financial statements and to the earlier report issued by the auditor. The new auditor’s report would be dated not earlier than the date of approval of the revised financial statements. If the client refuses to cooperate and make the necessary disclosures, the auditor should notify the board of directors and take the following steps, if possible: * Notify the client that the auditor’s report must no longer be associated with the financial statements * Notify any regulatory agencies having jurisdiction over the client that the auditor’s report can no longer be relied upon. * Notify each person known to the auditor to be relying on the financial statements. Notifying a regulatory agency such as the SEC is often the only practical way of providing appropriate disclosure. (Messier, Jr. , W. Glover, S. M. Prawitt, D. F. 2008) The opinion of the above author also supported by ISA Section 560 paragraphs 18. It stated that when management does not take the necessary steps to ensure that anyone in receipt of the previously issued financial statements together with the auditor’s report thereon is informed of the situation and does not revise the financia l statements in circumstances where the auditor believes they need to be revised, the auditor would notify those charged with governance of the entity that action will be taken by the auditor to prevent future reliance on the auditor’s report. The action taken will depend on the auditor’s legal rights and obligations and recommendations of the auditor’s lawyers. 2. Given your previous answer, do you believe that Touche Ross complied with the applicable professional standards after learning of the error in AFS’s 1985 financial statements? Explain. Answer: Based on the previous answer, I believed that Touche Ross did not comply with the applicable professional standards which are International Standard of Auditing (ISA) 560. When the personnel of Touche Ross discovered that the AFS’s 1985 financial statements contained a material misstatement, they attempted to persuade AFS to recall the company’s 1985 financial statements. But, unfortunately AFS officials declined to recall those financial statements. At last, AFS and Touch Ross come out with a compromise. This compromise permitted Touch Ross to only notify AFS’s sole secured creditor that the firm’s audit opinion on AFS’s 1985 financial statements had been withdrawn but could not notify AFS’s unsecured creditors included Chevron Chemical. The compromise that made by the Touche Ross with AFS have violated the ISA Section 560 paragraph 18. They should not only notify some of the AFS creditors. On the contrary, they should comply with the standard that required them to notify those charged with governance of the company or each person known to the auditor to be relying on the financial statement that action will be taken by the auditors to prevent future reliance on the auditor’s report. On top of that, Chevron Chemical Company is the largest suppliers of AFS and it will rely on the erroneous financial statement in deciding to continue extending credit to the company. So, the Touche Ross has the responsibility to inform Chevron Chemical Company of the material misstatement in the financial statement 1985. As a result, Chevron Chemical Company sued the Touche Ross and the court ruled that Touche Ross was negligent as a matter of law in failing to notify Chevron Chemical Company of the withdrawal of their opinion. . Do you agree with the assertion of AFS’s legal counsel that Touche Ross would have violated the profession’s client confidentiality rule by withdrawing its 1985 audit opinion and notifying all relevant third parties of the decision? Why or why not? Answer: No, I don’t agree with the assertion of AFS’s legal counsel that Touche Ross would have violated the profession’s client confidentiality rule by withdrawing its 1985 aud it opinion and notifying all relevant third parties of the decision. First of all, we look at the definition of confidentiality. By-laws (On Professional Ethics, Conduct and Practice) of Malaysian Institute of Accountants Section 100 Fundamental Principles and Conceptual Framework stated that a professional accountant should respect the confidentiality of information acquired as a result of professional and business relationships and should not disclose any such information to third parties without proper and specific authority unless there is a legal or professional right or duty to disclose. Confidential information acquired as a result of professional and business relationships should not be used for the personal advantage of the professional accountant or third parties. MIA By-laws Section 140 Confidentiality paragraph 0. 7 further explained about the concept of legal or professional right or duty to disclose the confidential information. It highlighted that the disclosure of the confidential information may be appropriate if there is a professional duty or right to disclose when not prohibited by law: * To comply with the quality assurance or practice review program of the Institute * To respond to an inquiry or investigation by the Institute’s Investigation Committee or Disciplinary Committee or any other regulatory body * To protect the professional interests of a professional accountant in legal proceedings * To comply with technical standards and ethics requirements As stated in the case of Fischer vs. Kletz, the responsibility to correct an audit report that was incorrect at the time of issuance is a legal as well as a professional obligation. (Cashell, J. D. , Fuerman, R. D. ) In my opinion, Touche Ross has the professional duty or right to withdraw their audit opinion and notify third parties of that their opinion had been withdrawn to comply with the requirements of the professional ethics and conduct. Interests of all parties including the third parties like Chevron Chemical Company will be harmed if Touche Ross does not disclose the material misstatement of AFS to the public. It is because the third parties will continue to rely on the erroneous financial statement to make their financial decisions such as extending credits or approving the loans to AFS. On top of that, if Touche Ross resisted disclosing, then there will be a legal obligation towards the Touche Ross on negligence in failing to notify the third parties of the withdrawal of their opinion. I would like to support my opinion with a case. The case Fund of Funds Ltd vs. Arthur Andersen Co is an example of a case where the CPA was deemed to have had a duty to disclose. Arthur Andersen Co (AA) was the auditor for two clients, Fund of Funds Ltd (FF) and King Resources Corp. (KRC). KRC developed natural resource properties and agreed to be the sole vendor of such properties to FF at prices no higher than those charged KRS’s industrial clients. AA learned the agreement was not being met but failed to inform FF. The court ruled AA should have disclosed this fact to FF because 1) they had knowledge of the overcharges, 2) they knew of the terms of the agreement that was being violated and 3) the language of their engagement letter produced a contractual obligation to reveal such information. (Cashell, J. D. , Fuerman, R. D. ) This case proved that auditors got the obligation to disclose fraud or any misstatement to the outsiders. 4. Suppose that Touche Ross had resigned as AFS’s auditor following the completion of the 1985 audit but prior to the discovery of the error in the 1985 financial statements. What responsibility, if any, would Touche Ross have had when it learned of the error in AFS’s 1985 financial statements? Answer: According to the AU section 9561 Subsequent Discovery of Facts Existing at the Date of the Auditor’s Report: Auditing Interpretations of Section 561, it required that the auditor to undertake to determine whether the information is reliable and whether the facts existed at the date of his report. This undertaking must be performed even when the auditor has resigned or been discharged. Hence, when Touche Ross had learned of the error in AFS’s 1985 financial statements, it still has its own responsibility to investigate its reliability and whether it existed at the date of the report although it had resigned as AFS’s auditor following the completion of the 1985 audit. If the investigation finds the financial statements or report would have been affected by the error if known earlier and it is believed there are persons urrently relying or likely to rely on the financial statements who would attach importance to the information, the auditor who have resigned should also advise the client to make appropriate disclosure of the newly discovered facts. The responsibilities of the resigned auditors in the situations in which a client cooperates with the auditors in making all necessary disclosures and situations involving uncooperative clients are totally the same with the continuing auditor. As stated in the case Fischer vs. Kletz, Peat, Marwick, Mitchell Co. (PMM) had reported on financial statements it later discovered were incorrect at the time they were issued. PMM argued their duty ended once the audit report was issued. A key factor in the court’s denial of PMM’s motion to dismiss the claim was the representations were false at the time of issuance. (Cashell, J. D. , Fuerman, R. D. ) Back to the AFS case, if the Touche Ross had resigned as an auditor for AFS, it still had the responsibilities to correct previously issued information. It is because the error happened in AFS’s 1985 financial statement which Touche Ross was fully in charged in auditing the financial statement in that particular year. In addition, Touche Ross who had resigned as an auditor of AFS should inform the successor auditor of AFS of the material misstatement so that the successor will aware of the issue and might carry out extensive audit procedures by collecting more audit evidence in the current year audit to avoid the same issue happened in the current year. References Messier, Jr. , W. , Glover, S. M. Prawitt, D. F. (2008). Auditing Assurance Services: A Systematic Approach. New York: McGraw-Hill/Irwin Arens, A. A. , Elder, R. J. , Beasley, M. S. , Amran, N. A. , Fadzil, F. H. , Muhammad Yusof, N. Z. , et al. (2008). Auditing and Assurance Services in Malaysia: An Integrated Approach (Second Edition). Selangor: Prentice Hall Cashell, J. D. Fuerman, R. D. (n. d), Auditing: The CPA’s Responsibility for Client Information. The CPA Journal. Retrieved October 12, 2009 from https://www. nysscpa. org/cpajournal/1995/SEP95/aud0995. htm International Federation of Accountants (2008). Handbook of International Auditing,

How to Make Hydrogen Gas (4 Methods)

Its easy to generate hydrogen gas at home or in a lab using common household materials. Heres how to make hydrogen safely. Make Hydrogen Gas—Method 1 One of the easiest ways to obtain hydrogen is to get it from water, H2O. This method employs electrolysis, which breaks water into hydrogen and oxygen gas. Materials Needed water9-volt battery2 paperclipsanother container filled with water Steps Unbend the paperclips and connect one to each terminal of the battery.Place the other ends, not touching, into a container of water. Thats it!Youll get bubbles off both wires. The one with more bubbles is giving off pure hydrogen. The other bubbles are impure oxygen. You can test which gas is hydrogen by lighting a match or lighter over the container. The hydrogen bubbles will burn; the oxygen bubbles will not burn.Collect the hydrogen gas by inverting a water-filled tube or jar over the wire producing the hydrogen gas. The reason you want water in the container is so you can collect hydrogen without obtaining air. Air contains 20% oxygen, which you want to keep out of the container in order to keep it from becoming dangerously flammable. For the same reason, dont collect the gas coming off both wires into the same container, since the mixture could burn explosively upon ignition. If you wish, you can collect the oxygen in the same way as the hydrogen, but be aware this gas is not ve ry pure.Cap or seal the container before inverting it, to avoid exposure to air. Disconnect the battery. Make Hydrogen Gas—Method 2 There are two simple improvements you can make to improve the efficiency of hydrogen gas production. You can use graphite (carbon) in the form of pencil lead as electrodes and you can add a pinch of salt to the water to act as an electrolyte. The graphite makes good electrodes because it is electrically neutral and wont dissolve during the electrolysis reaction. The salt is helpful because it dissociates into ions which increase the current flow. Materials Needed 2 pencilssaltcardboardwaterbattery (could go as low as 1.5 V with the electrolyte)2 paperclips or (better yet) 2 pieces of electrical wireanother container filled with water Steps Prepare the pencils by removing the erase and metal caps and sharpening both ends of the pencil.Youre going to use the cardboard to support the pencils in the water. Lay the cardboard over your container of water. Insert the pencils through the cardboard so that the lead is submerged in the liquid, but not touching the bottom or side of the container.Set the cardboard with pencils aside for a moment and add a pinch of salt to the water. You could use table salt, Epsom salt, etc.Replace the cardboard/pencil. Attach a wire to each pencil and connect it to the terminals of the battery.Collect the gas as before, in a container that has been filled with water. Make Hydrogen Gas—Method 3 You can get hydrogen gas by reacting hydrochloric acid with zinc: Zinc Hydrochloric Acid → Zinc Chloride HydrogenZn (s) 2HCl (l) → ZnCl2 (l) H2 (g) Materials Needed hydrochloric acid (muriatic acid)zinc granules (or iron filings or strips of aluminum) Hydrogen gas bubbles will be released as soon as the acid and zinc are mixed. Be very careful to avoid contact with the acid. Also, heat will be given off by this reaction. Homemade Hydrogen Gas—Method 4 Aluminum Sodium Hydroxide → Hydrogen Sodium Aluminate2Al (s) 6NaOH (aq) → 3H2 (g) 2Na3AlO3 (aq) Materials Needed sodium hydroxide (found in certain drain clog removers)aluminum (included in the drain removal products or you can use foil) This is an extremely easy method of making homemade hydrogen gas. Simply add some water to the drain clog removal product! The reaction is exothermic, so use a glass bottle (not plastic) to collect the resulting gas. Hydrogen Gas Safety The main safety consideration is making certain hydrogen gas isnt allowed to mix with oxygen in the air. Nothing bad will happen if it does, but the resulting air-hydrogen mixture is much more flammable than hydrogen on its own because it now contains oxygen, which will act as an oxidizer.Store hydrogen gas away from an open flame or another ignition source.

Argument and Persuasion Free Essays

The controversy around homosexual marriage rages on in the United States and other nations, including everybody in the debate on the nature of marriage that threatens to redefine the concept of marriage as such. Argument and Persuasion Same-sex marriage was allowed nation-wide in Belgium (since 2003), Canada (since 2005), Netherlands (since 2001), and Spain (since 2005). In my opinion, homosexual persons should be given equal rights with heterosexuals in a democratic society that claims to uphold the moral value of every person irrespective of any issues pertaining to the person’s background such as race, ethnicity or sexual orientation. We will write a custom essay sample on Argument and Persuasion or any similar topic only for you Order Now In this debate, issue of core social value is what is really at stake, not just the social institutions like marriage or matters of children’s upbringing. The arguments against gay marriages are many, but most of them fail to offer solid reasons against this innovation. Permission to register same-sex marriages is consistent with the need recognized in all democratic societies to treat people as equals irrespective of qualities they cannot control, such as sexual orientation, origin, language, race and the like. Denying the right to marry to gays and lesbians, society perpetuates discrimination that does not allow minorities to have the rights enjoyed by ‘mainstream’ population. Most people would agree that homophobia is both harmful and humiliating for a community – it is a demonstration that the nation is not opposed to mediaeval witch hunts. Yet maintaining the ban on same-sex marriages to some degree justifies homophobia by showing that some human beings are still ‘more equal’ than others. Such a ban stresses the idea that homosexuals are not the same members of society as heterosexuals. Instead, they prove to be outcasts denied the basic human right to join their lives with their partner. The most frequent argument against same-sex marriage is that major religions including Christianity and Islam restrict the concept of marriage to the union between man and woman. On these grounds, believers campaign against same-sex marriages. However, one should note that in most modern nations religion is separate from the state, and thus the state does not have to embrace religious norms pertinent to any religion. Christian pastors can, for instance, persuade their parishes to have sexual lives that correspond to their beliefs, but they can hardly change the morals of the whole society. Thus, the fact that under a certain religion same-sex marriages are considered a sin cannot be a valid argument to institute this ban in a secular state that most often includes citizens belonging to different faiths. In a pluralistic society, believers of one faith have no right to impose their views on the rest of the nation, even if they outnumber other denominations. Besides, within a certain religion there may be differing views on the policies concerning same-sex marriages. Thus, within Christianity, there is a lesbian, gay, bisexual and transgender movement named Creating Change that draws on Christian norms to justify same-sex marriages. Dr. Yvette Flunder who founded City of Refuge United Church of Christ in San Francisco sums up the position of the movement in the following words: â€Å"God is on our side, and God has been on the side of those who struggle for right and righteousness from the very beginning† (Sturrock, 2005). The movement strives to shake off the homophobia of the Christian rights and to redirect the discussion towards the core values of basic humanity. Another argument against gay marriage is that it undermines the value of marriage as such. In debates on the bill closely defining the meaning of marriage, Canadian Senator Marisa Ferretti Barth described marriage as â€Å"the public joining together of a man and a woman who want to found a family, to have children and so ensure that the family will continue into future generations† (Hays 2002). The proponents of the amendment to the US Constitution that will officially restrict marriage only to heterosexual couples similarly underscore that marriage is only meaningful when it is meant to unite a man and a woman, in line with traditions that are millennia old. Tradition is fine, but time arrives when society has to redefine some or all of its core institutions, perhaps those that had carried it through to this day. Now it may be the time to reshape our common concept of marriage in the same way as people whose generations of ancestors lived under monarchy opted for democracy. In earlier centuries the idea that virtually the entire Europe will be governed by democratically elected leaders seemed absurd, and people could not imagine how they will live without a king. Yet now most of us are pleased that we do not have to reckon with weak-minded hereditary rulers. In the same way society must come to see marriage not simply as a way to stimulate procreation in its members, but as a vehicle for expressing love and care. Many people are willing to allow homosexual marriages but insist that allowing gays and lesbians to bring up kids is a bad idea. The most important reason is that children raised in such families are at greater risk of becoming homosexuals themselves later on. The validity of this concern depends on the agreement as to the reasons for the choice of sexual orientation by a certain person. If one believes that the choice of sexual orientation is conditioned largely by upbringing and external influences, then the above claim has value. However, many researchers suppose that orientation is determined by inborn factors. If this is true, it does not matter whether the child will be exposed to displays of homosexual partnership. Growing up in a same-sex family, the child is likely to develop some positive features instead. Here belongs the trend â€Å"to discriminate less on matters of race, gender or sexual orientation† (Robinson 2004). They are also more prone to experiment in sexual life before marriage. As to the proportion of gays or lesbians among adults with this kind of background, it tends to be much the same as in the rest of the population. Actually, the very idea that becoming a homosexual is a tragic development hinges on the perception of homosexuals as inferior beings. Once again, many people stand opposed to gay marriage since it does not promote procreation. Marriage, in their perception, should be about procreation, and since same-sex couples cannot perform this function, they have no right to marry. There is one problem with this argument – the fact that many people in ‘normal’ marriages cannot procreate either. In some couples, the partners are past child-bearing age. In others, husband and wife cannot conceive because of biological problems. The National Center for Health Statistics reports that â€Å"the number of infertile married couples of childbearing age in the U.S. was 2.1 million†, and many of those can only have children even through in-vitro fertilization (IVF) or artificial insemination (Robinson 2004). If this argument were true, society should have introduced a rule to perform medical analysis of every wedding couple to see if they are capable of reproduction and deny this right to those that prove incapable. Clearly, this suggestion is inhumane, but no more humane is the suggestion to deny the right to marry to homosexuals on the grounds of their infertility. This infertility is not absolute either. Lesbians can bear children through artificial insemination, and gay men can have them with the help of surrogate motherhood. Thus, the main objections against same-sex marriages fail to reach their point. They offer pretexts against legalisation of such marriages rather than valid arguments. Speaking of kids, they can be happy in same-sex environments no less than in regular opposite-sex families. Childhood happiness is really about being loved and does not depend so much on the gender composition of the environment. The same is true for adults, since most of us need love more than anything else in the world, whatever other important things may be our priorities. Giving homosexuals a way to legitimize their relationships, to secure their future in case of divorce or death of one of the partners means giving them equality with other members of society. The fact that they were often denied this opportunity in the past does not bind the future. If we as a society learn to make more democratic choices, this will improve social experience for all us, not just homosexual couples, because we will increase the value of the individual. References Hays, Dan. 2002. Debates of the Senate (Hansard). 1st Session, 37th Parliament, 139 (124), June 13. http://www.parl.gc.ca/37/1/parlbus/chambus/senate/deb-e/124db_2002-06-13-E.htm?Language=EParl=37Ses=1#73 (accessed November 16, 2005). Robinson, B.A. 2004. Is Same-Sex Marriage (SSM) A Bad Idea? Seven Reasons Why They Are Undesirable (With Rebuttals). Ontario Consultants for Religious Tolerance, 10 April. http://www.religioustolerance.org/hom_marint2.htm (accessed November 16, 2005). Sturrock, Carrie. 2005. Meeting for gays focuses on God: It’s time to reclaim moral values debate, speakers tell crowd. San Francisco Chronicle, November 14. http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2005/11/14/BAGFCFNKJE1.DTLhw=gaysn=001sc=1000 (accessed November 16, 2005).    How to cite Argument and Persuasion, Essays