<p class="MsoNormal" style="text-align: justify; margin: 0in 34.2pt 0pt 0.5in;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">The audit function creates several important relationships among the various parties.<span style="mso-spacerun: yes;">&nbsp; </span>One of the significant and potentially problematic relationships is between the audit firm and the audit client.<span style="mso-spacerun: yes;">&nbsp; </span>The decision by the audit firm to accept or retain a client is crucial because of the potential risk of being associated with certain clients. The potential damage can range from financial loss and/or loss of prestige to the ultimate demise of the audit firm.<span style="mso-spacerun: yes;">&nbsp; </span>Engagement risk is considered to be composed of three components: entity&rsquo;s business risk, audit risk, and auditor&rsquo;s business risk. This research questioned whether audit firms have significantly changed their views regarding engagement risk and how they evaluate and manage this risk.<span style="mso-spacerun: yes;">&nbsp; </span>An analysis of the surveys revealed that 83% of the respondents believed their views regarding the importance of engagement risk have changed, but only to a moderate degree.<span style="mso-spacerun: yes;">&nbsp; </span>In evaluating engagement risk, audit partners considered management integrity in general, management integrity toward fraud, and the presence of the elements of the fraud triangle to be the most important factors. Assignment of more experienced audit staff and increased substantive tests of account balances were the most frequently used mitigating strategies.<span style="mso-spacerun: yes;">&nbsp; </span>Based upon these results, which were consistent with our previous study, it appears there have not been significant changes in audit partners&rsquo; views regarding the importance of the client acceptance/retention decision.<span style="mso-spacerun: yes;">&nbsp; </span><span style="mso-spacerun: yes;">&nbsp;</span></span></span></p>

The Keystone Pipeline and everything it entails has taken over the news and the majority of North America. Most people around the United States did not know the Keystone Pipeline already existed before all of the uproar and protesting began back at the end of 2011. The part of the pipeline that does not exist is the additional expansion, the Keystone XL Pipeline, which was proposed in 2008. Since the approval of the project in March 2010, the Keystone XL Pipeline has been a problematic proposition ever since the idea was introduced by the TransCanada Energy Company. While the project was originally developed as a partnership between TransCanada and ConocoPhillips, TransCanada is now the sole owner of the Keystone Pipeline System, as TransCanada received regulatory approval on August 12, 2009 to purchase ConocoPhillips' interest. TransCanada attempted to get a permit for the new pipeline for more than three years. Since the pipeline crosses international borders, TransCanada had to obtain a Presidential Permit through the State Department for construction of the portion of the pipeline that goes from Canada to the U.S. To this day, even though a substantial amount of the project is complete, protesters are still against the idea of transporting tar sands throughout Canada and the United States to refineries in Houston, Texas so that we will have additional sources of oil and fuel to supply our needs. The paper discusses the controversy, the accounting implications, the legal implications, and local press. Pictures Included.

In 2009, four of the top ten Fortune 500 companies were classified within the oil and gas industry. Organizations of this size typically have an advanced Enterprise Risk Management system in place to mitigate risk and to achieve their corporations objectives. The companies and the article utilize the Enterprise Risk Management Integrated Framework developed by the Committee of Sponsoring Organizations (COSO) as a guide to organize their risk management and reporting. The authors used the framework to analyze reporting years 2009 and 2010 for Fortune 500 oil and gas companies. After gathering and examining information from 2009 and 2010 annual reports, 10-K filings, and proxy statements, the article examines how the selected companies are implementing requirements identified in the previously mentioned publications.Each section examines the companies Enterprise Risk Management system, risk appetite, and any other notable information regarding risk management. One observation was the existence or non-existence of a Chief Risk Officer or other Senior Level Manager in charge of risk management. Other observations included identified risks, such as changes in economic, regulatory, and political environments in the different countries where the corporations do business. Still others identify risks, such as increases in certain costs that exceed natural inflation, volatility and instability of market conditions. Fortune 500 oil and gas companies included in this analysis are ExxonMobil, Chevron, ConocoPhillips, Baker Hughes, Valero Energy, and Frontier Oil Corporation.An analysis revealed a sophisticated understanding and reporting of many types of risks, including those associated with increasing production capacity. Specific risks identified by companies included start-up timing, operational outages, weather events, regulatory changes, geo-political and cyber security risks, among others. Mitigation efforts included portfolio management and financial strength. There is evidence that companies in later reports (2013) are more comprehensive in their risk management and reports as evidenced by their 10-K and Proxy Statements (Marathon Oil Corporation, 2013).

No abstract

The fishing tournament industry is confronted with many of the same risks as other industries (such as financial statement misstatements), share some risks specific with others (such as cheating in casinos), and face some unique risks (such as the risk of competitors adding weight to fish).This teaching case explores some of the risks inherent in the fishing tournament industry. Students are given background information about a how a tournament operates and then asked to perform an overall risk assessment using the COSO enterprise risk management framework. Elements of the assignment include assessing the internal environment, setting of objectives, and then identifying, prioritizing, and responding to risks. Students are also asked to make recommendations for improving the information and communications process and for improving monitoring activities.The case contains the following elements:Case Narrative Instructors ManualCase ObjectivesBasic Pedagogy (course, level, position in the course, prerequisite knowledge)Teaching MethodsCase SummaryKey IssuesDiscussion questions and suggested responsesTeaching TipsInstructor TablesHandoutsEpilogueThe case is suited for use in several business courses at the undergraduate or graduate level. It can be used in part or in its entirety, and can be adjusted for difficulty levels. It is also adaptable to any of the major risk management models.