Amre Inc Case (Ethics Case) - Principles of Auditing Essay - 1

Amre Inc Case (Ethics Case) - Principles of Auditing - Essay Example r her performance, based on credentials like average sales in dollars for every appointment the salesperson had with a customer and the number of schedules with clients. In the long run, this AMRE was involved in an accounting fraud and the top officials we also unethical in performing their duties. This is a critically analysed and summarised below. Following AMRE’s spectacular financial performance, especially in 1987, financial analysts tracking the companies were given, by the AMRE’s top officers, huge estimations of expected revenue and profit projections that would be achieved throughout the fiscal year. However, these projections, for the first quarter of the fiscal year, were not met and as a result, Robert Levin, an executive stakeholder instructed Dennie Brown, a chief accounting officer to inflate the net income for the first quarter of the fiscal year. Robert Levin in turn instructed the data processing vice president, Walter to alter the computerized records that stored records of sales. This was repeated for the second fiscal year and final culmination on the third and fourth year correspondingly (Hoffman, 2006). It can be clearly seen that firm violated the GAAP time period assumption accounting principle. According to this principal (Ken, 2006), the financial position of a given firm can be reported over a give short but defined interval period of time. It continues to advocate that, in case there is such an assessment, there should be a clear record of cash flow. This was not the case with AMRE’s auditing. In each of the quarter of the fiscal year, they would manipulated the financial records and no report of cash flow was seen (John, 2006). Secondly, they violated the full disclosure principle. The principle demands that any vital information that affects investor, stakeholders using financial statements, the information should be correctly relayed. The firm fulfilled a part of the principle of relaying the information however, it was not