DECEPTION OF AUDITORS AND FALSE RECORDS

• NCJ Number: 64700
• Journal: Journal of Accountancy Volume: 148 Issue: 1 Dated: (JULY 1979) Pages: 61,64,66,68,70 AND 72
• Author(s): R CHIRA
• Date Published: 1979
• Length: 6 pages
• Corporate Author: American Institute of Certified Public Accountants
• Publication Format: Article
• Language: English
• Country: United States of America

Annotation

RECENTLY ADOPTED RULES TO PROMOTE THE RELIABILITY OF FINANCIAL INFORMATION AND HELP PREVENT THE CONCEALMENT OF QUESTIONABLE OR ILLEGAL CORPORATE PAYMENTS ARE OF EXTREME SIGNIFICANCE TO THE ACCOUNTING PROFESSION.

Abstract

THE RULES, WHICH TOOK EFFECT ON MARCH 23, 1979, PROHIBIT THE FALSIFICATION OF CORPORATE BOOKS, RECORDS, OR ACCOUNTS AND PROHIBIT OFFICERS AND DIRECTORS OF AN ISSUER FROM MAKING FALSE, MISLEADING, OR INCOMPLETE STATEMENTS TO AN ACCOUNTANT. IN ADDITION, THE RULES SHOW FEW LIMITATIONS TO THEIR APPLICABILITY. THE FALSIFICATION RULE CONTAINS NO MATERIALITY STANDARD AND APPLIES TO NEARLY ALL CORPORATE RECORDS, AND BOTH WRITTEN AND ORAL STATEMENTS ARE INCLUDED IN THE RULE COVERING DECEPTION OF AN ACCOUNTANT. THE RULES WERE ADOPTED BY THE SECURITIES AND EXCHANGE COMMISSION IN THE WAKE OF THE WATERGATE SCANDAL AND DISCLOSURES OF QUESTIONABLE OR ILLEGAL CORPORATE PAYMENTS MADE BY HUNDREDS OF AMERICAN CORPORATIONS. THIS ARTICLE COVERS THE SUBJECTS OF AUTHORITY FOR THE ADOPTED RULES, SCOPE OF THE RULES; THEIR APPLICABILITY; THE SIGNIFICANCE OF THE DOCTRINES OF RESPONDEAT SUPERIOR, BY WHICH EMPLOYEES ARE HELD LIABLE FOR THE ACTS OF EMPLOYEES ACTING WITHIN THE SCOPE OF THEIR EMPLOYMENT; AND AUDITING CONSIDERATIONS SUCH AS THE REVIEW OF THE MANAGEMENT'S REPRESENTATION LETTER; AND THE DOCUMENTATION OF DISCUSSIONS WITH OFFICERS AND DIRECTORS.