Two parts assignment: Read accounting resources and case then answer some question.(SEC, KPMG)

Team Project 1

This project has two parts. Your team must complete both parts, submitting your work in one single Word document file to the link provided on Blackboard. Remember to bring a copy of your document to class, as we will discuss it in class. The assignment is due Monday July 11 at 12 PM, and will not be accepted late.

Your submitted Word file must include:

1. Your answer to item 1 below

2. Your answer to item 2 below

3. Minutes of your team’s meetings (or a printout of messages between team members) or some sort of documentation showing the relative contributions of each team member to the project.

If any team member, as an individual, do not agree with the contents of the minutes submitted.

Assignment Item 1: Overstated income (overstated revenues, understated expenses or a combination) is an area of concern to the SEC. Go to http://www.sec.gov/divisions/enforce/friactions.shtml and locate an enforcement release where there is a discussion of overstated income and issues with the audit or auditor. Prepare a memo to explain why the SEC had an issue with income overstatement and how the auditor could have done a better job.

Assignment Item 2: Your team is to consider the issues presented in the Hamilton Corporation case posted on Blackboard. You are provided related information from KPMG as well. Answer questions 1 and 2 at the end of the case, and also answer this question (we’ll refer to it as question 3):

3. As the auditor, how would you expect to address the fraud risks you have identified? How does the fraud risk impact on audit risk and how do you expect this risk to impact on your audit and its planning? You are not expected to research this issue or consider information in your text after Chapter 5. You may find your basic knowledge of accounting helpful, as well as the application of good business practices you have learned.