Respond 8

Question 1

Sampling is the application of an audit procedure to less than 100% of the items within an account balance or class of transactions for the purpose of evaluating some characteristic of all the items within the balance or class of transactions. Sampling is performed because it is more efficient than testing 100% of a population. Statement on Auditing Standards No. 39 on Audit Sampling provides guidance on the use of sampling in an audit of financial statements. Auditing standards indicate that not all instances of account balance or population being reviewed for trends and accuracy are appropriate for sampling.

Discuss situations when sampling would not be the best method to validate account balances or classes of transactions. Explain.

Respond to this… “An Auditor would not be able to detect understatements of an account due to omitted items by sampling the recorded items. An appropriate sampling plan for detecting such understatements would involve selecting from a source in which the omitted items are included. For example, subsequent cash disbursements might be sampled to test recorded accounts payable for understatement because of omitted purchases, or shipping documents might be sampled for understatement of sales due to shipments made but not recorded as sales.” ( www.AICPA.com.section.17 )

 

References

http://www.aicpa.org/Research/Standards/AuditAttest/DownloadableDocuments/AU-00350.pdf

Question 2

Post a response to the following:

· Should the antitrust authorities stop more corporate mergers than they currently do?

· What are some of the pros and cons?

Respond to this… To say the antitrust authorities should stop more mergers than they currently do is being short sighted in my mind. Each merger has its own reasoning, some good some bad. Corporate mergers happen for many reasons, market gained in a specific market place, more control over resources for their main product, or expansion into other industrial markets. These all need be looked at by a case by case basis.  

Some mergers are good for both parties involved. One example of this is Pepsico's purchase of Gatorade. Pepsico needed a sports drink and found an established brand in Gatorade. Pepsico was able to use its current market size and big pocket books to advertise and market their newest brand. Gatorade was able to take advantage of the technology of Pepsico to become a giant in the sports drink market for over 30 years now. 

Corporations sometimes have more evil intents for their aquisition of other companies. One such example is that of Microsoft. Microsoft purchased Internet Employer for their integrated web browser. Essentially they were able to lock out every other browser software by forcing PC makers to build their PCs with Windows software. They were able to use their market control to manipulate pricing as well as software usage. 

Pros and cons of corporate mergers are all about the intentions the purchasing company has for the takeover.I have seen witnessed first hand a company purchase a brand to only scrap the U.S. manufacturing portion and out source the work to china to save money. It is sad when this happens but you can not blame companies for trying to save a dollar. It is how big business works and I do not see anything changing anytime soon.

Question 3

Describe a religion that is not your own.

Choose from one of the following religions: Ancient Egyptian belief, Hinduism, Greek or Roman Polytheism, Native American Religion, Buddhism, Taoism, Judaism, Christianity, or Islam. You must choose a religion that is not your own.

· Describe three features or tenets of the chosen religion.

· Mention any written works and prophets.

· Share how this religion compares to your religion or beliefs, even if you do not have a chosen "religion."

Respond to this… I have chosen to do Native American Religion. The first and main tenent is the Ghost Dance, most Native Americans still do this dance today and it is to predict their resurrection along with honor the dead. Another is the Indian Shaker Religion, it is to be believed that if you shake and twitch with this stick it is supposed to wipe your sins away. The third is the Earth Lodge Religion, they sit in a hot room and do a dance much like the Ghost Dance and they feel they can predict things like the world ending. It does not compare in any way. Most of this, atleast with the Native Americans that I know do not practice any of this anymore. The closest they get is a pow-wow once a year and they say it is a huge sin to act like the "white man" and drinking alcohol is a huge sin but the ones at the casino I work at drink everyday.