Advanced Auditing Theory And Practice

1787 WordsNov 24, 20148 Pages
Advanced Auditing Theory and Practice To: Professor John Rose Jamaica Water Properties Paul Apoian Wei Hu Kent State University December 2, 2014 Executive Summary: This case focuses on David Sokol. He discovered a massive fraud within JWP and confronted the CEO, Andrew Dwyer, with the information he discovered and told him he was considering leaving. Dwyer attempted to bribe Sokol to stay and not reveal the information. Dwyer refused his offer and informed the board of the fraud he had discovered and left the next day. This fraud was allowed to continue even after discovery by the auditors. The leader of the fraud, Gendi, intimidated his way through the internal auditors and had a questionable relationship with the external auditors that allowed him to refuse to adjust JWP’s financial statements while still receiving unqualified audit opinions. Throughout the case the punishments for those directly involved with the fraud seemed lack luster, as they didn’t have to pay much more than they had gained from the fraud and served no jail time for their actions. The external auditors were not even criticized by the SEC for allowing the fraud to continue after discovery. Sokol mentioned towards the end of the case that the punishments for violating accounting rules needed to be much more severe to deter fraud. Case Overview Our case begins with a man named David Sokol. Sokol served as the president of Ogden Projects, Inc., an environmental services company.
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