ipl-logo

Chesapeake Energy Auditing Case Study

479 Words2 Pages

The auditing team will need to have a diverse set of skills and experience in order to properly audit Chesapeake Energy. First, the audit team must have experience within the gas and oil industry in addition to understanding the various complications of oil and gas production. Relevant skills and experience include knowledge about the industry, and include work experience related to oil and gas companies. This is critical because many oil and gas companies operate internally and follow IFRS. Some only follow GAAP such as Chesapeake Energy. Also, accounting methods will differ in various ways for oil and gas companies and auditors should know how the difference can affect financial statements. For example, oil and gas companies have the option of capitalizing all costs related to drilling as mentioned earlier. Understanding the different outcomes in the financial statement that each method can bring is crucial since it has the ability to overstate or understate assets. …show more content…

This valuation expert or team of experts should have an extensive experience in valuing assets related to gas and oil reserves. With this experience, as part of the audit team, this individual must be independent of Chesapeake Energy. While Chesapeake Energy may have assets valued prior, there should be questions raised in regards to who performed the valuation. If the valuation was done internally, there would be motivation and opportunity to alter such valuation. The valuation expert should test work done prior to the audit. If Chesapeake Energy had valuations taken earlier prior to the audit by independent experts, more reliance could be placed on such figures, and less substantive testing would be done. The valuation experts or reserve estimators should be able to test impairments, and other tangible/intangibles relating to the nature of gas and oil

Show More
Related
1873 Words | 8 Pages

The first step of this would be to understand Smackey’s business and its industry. The auditors would need to know what type of risk would be involved in this particular industry. The next step would be for the auditor’s to gain a list of the client’s internal control procedures. This would help the auditors determine what type of documentation would be needed. Keller CPA would then need to be able to assess the control risk for each transaction related audit objective (Aren, et al., 2016).

Read More
1532 Words | 7 Pages

An example of fraud for Rivian, “A federal judge said Rivian Automotive must face a lawsuit claiming it defrauded shareholders during and after its blockbuster 2021 initial public offering by concealing that it had underpriced its electric vehicles, leading to unpopular price hikes.” (Stempel). In an instance of fraud occurring at Rivian that displays weaknesses in internal controls, the company should have detected these mistakes. Although the company has spoken about the issue and stated that they are actively trying to improve their internal control system, the legal implications constitute great damage to our auditors. Given Rivian's history of losses, the company and its top management may be under significant pressure from investors or current stockholders.

Read More
789 Words | 4 Pages

A financial audit is an independent, objective evaluation of an organization 's financial reports and financial reporting processes. The primary purpose for financial audits is to give stakeholders reasonable assurance that financial statements are accurate and complete. Most internal audits are not adding value. One reason is that “ongoing compliance burdens and pressure to do more with less” is contributing to the decline in perceived internal audit value.

Read More
877 Words | 4 Pages

Competitor Analysis Husky Energy Husky is a Canadian integrated oil and gas producer, with operations in Canada and Asia. In recent years, they have improved completion of development plans. They suffer from poor netbacks in upstream operations and relatively low margins in their refining operations. One example of poor execution in oil sands growth is the Tucker oil sands project.

Read More
79 Words | 1 Pages

Analyzed Husky Energy financial position and performance using its financial statements for a 10 period and benchmarked Husky Energy to the top 5 oil production companies in Canada, while comparing them to the entire Industry averages. We also researched Husky Energy new ventures and whether the current drop in oil price has increased or decreased oil production. And we concluded by evaluating how the innovative technology of the automobile industry may cause future decline in fuel and diesel consumption.

Read More
467 Words | 2 Pages

10. Keith Yarborough: Valuation Analysis Keith Yarborough knows that while beauty is in the eye of the beholder, the worth of a company or investment is only recognized through a competent valuations analyst. He has spent years understanding and learning the many objective and subjective means by which an asset or company is deemed valuable. Careful consideration and the ability to look at the big picture have made Keith Yarborough a blue-chip valuations analyst. 11.

Read More
1389 Words | 6 Pages

Even though Just for Feet management and vendors colluded to deceive the auditors, the SEC charged that the auditors should have discovered that Just for Feet’s 1998 financial statements were not prepared in accordance with GAAP. The auditors, during the 1998 audit, did not execute their 1998 audit properly based on the 1997 audit identification of Just for Feet as a “greater than normal” audit risk. Prior risk assessment working papers described Just for Feet fraud risk factors

Read More
470 Words | 2 Pages

A. Introduction Chesapeake IT Consulting (CIC) company that offers IT consulting services. The consulting services offered by the company include business processes such as process improvement and business redesign. Other services offered by CIC are IT consulting strategies such as planning, systems development, business analysis, implementation and network support. In addition to these services CIC also offers IT outsourcing consulting services ranging from vendor evaluation, selection and performance management, as well as service level agreements. These and other services are provided by CIC's 400 employees, who are highly trained and experienced in satisfying their clients.

Read More
595 Words | 3 Pages

Management accounting reports have a profound impact on the business, although like financial reporting it doesn't focus on the overall evaluation of the business, instead, it focuses on segments of the business. By segmenting manager or owner of the business can get into the details and analyse the performance of particular area of the business and make the business decisions. Management accounting reports may prepared quarterly, monthly, weekly or daily. Different methods of management accounting reporting: There are different types of method for management accounting reporting.

Read More
552 Words | 3 Pages

In 2002, the SEC adopted new rules and amendments to address public companies’ disclosure or release of certain financial information that is calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles. The accrual accounting is more popular and be widely used in business world because it produces more accurate and faithful financial statements that constitute better representation of actual circumstances than its main competitors. The major weakness of accrual accounting is that there is some time issue such like the time of occurred and time of recorded would probably be different and it increases the risk of financial information and the risk of correctness. Also, the accrual accounting generally cost more to operate compared with cash accounting

Read More
146 Words | 1 Pages

Executions in Medieval Ages consisted of varying types of appalling methods of putting down a criminal, ended the lives of many legends, and had a peculiar system of determining whether one was guilty or not. The renowned guillotine and public hangings weren’t the only techniques used for capital punishment, there were tons of creative, yet horrifying ideas for execution. Some executions, such as the beheading, were reserved for nobles, kings, and knights since they were a honorable and quick death. There were even executions specialized for purging witches by burning them on a stake. Public executions like impalement and crucifixion were used to scare the public, portraying the consequences of breaking the law.

Read More
1656 Words | 7 Pages

Also many companies reporting related to the state of the value added or environmental information, these are concentrated in industrial sectors. The financial statements reflect the financial position of company, financial performance and cash flows of the company, it is significant to note that the correct depiction of the impacts of transactions and other events and circumstances according to the explanations and criteria identification of assets, liabilities, income and expenses go in the same outline (Brealey,

Read More
1079 Words | 5 Pages

It also requires that all members of audit, compensation and nominating or governance committees should be independent and also that at least one member of the audit committee must have accounting expertise. These regulations also impose stricter supervision over outside auditors for proper auditing

Read More
2512 Words | 11 Pages

5 Businesses or organizations throughout the world exhibit their own audit controls as well as observe specific procedures. When addressing IT audit issues, a business such as Asplundh Tree Expert, Inc. are known for their efficient audit procedures and internal practices. IT audit process effectiveness happens when an organization or business is adhereing or responding to set procedures. An organization may conduct several diverse audits, but consequently regardless of the audit type used, an audit is done to ensure a business or organization are using all resources available to them and for their benefit. Diverse IT audit selection ensures that the company set and meet goals and objectives that have been laid down by the international standards

Read More
1847 Words | 8 Pages

Professional skepticism depends on the personal behavioral actions. The need for professional skepticism in an audit cannot be overemphasized. Professional skepticism is an essential part of the auditor 's skill and is very closely interrelated to the concept of auditor independences and professional judgement and contributes to audit quality. In addition to professional skepticism is important and required throughout the audit in engagement acceptances, identifying and assessing risks of material misstatement, designing the nature, timing and extent of further audit procedures that are responsive to assessed risks of material misstatement, and evaluating audit evidence, and forming an opinion on whether the financial statements are prepared, in all material respects, in accordance with the application financial reporting framework.

Read More

More about Chesapeake Energy Auditing Case Study

Related Topics

Open Document