years NIC changed and one of the most dramatic changes was the relationship with its longtime auditor Deloitte. (Knapp, 2015) In 2005, NIC was dissatisfied with a decision the independent audit firm made to replace an engagement Partner. Although, nearly complete with the Audit, the new Partner was not willing to rely on the finding of the previous Partner, which prolonged the audit (Weirich). Deloitte had been NIC auditor since 1908 and the business community was shocked to learn of the termination
develop a better understanding of a couple of the elements presented. I added those elements to my critique of this case. Questions and Answers 1. What factors likely contributed to the oversights made by Ernst & Young auditors during the 2004 AA Capital engagement? Identify measures that audit firms can implement to minimize the likelihood of such oversights on audit engagements. The fact that Oprins and McNeely were unfamiliar with the company likely contributed to the oversights that were made by
Corporation after merging other automobile manufactures. General Motors was known as the largest automobile maker throughout the world. However, by the 21st century the automotive industry was facing some tough competition from several competitors (Knapp, 2015). After 77 years, proud and dominant General Motors was no longer known as the number one automotive manufacture worldwide. One significant contributor to GM decline was the company’s pension and postretirement benefit expenses that drove up
compounded with additional misstatements. North Face was the perpetrator of the intentional misstatements but they were concealed by the Deloitte audit advisor, Richard Fiedelman. Fiedelman allowed additional non-recognizable revenue to be posted and altered/replaced the original working papers that reported the original material misstatement. (Knapp, Rittenberg, Johnstone, &
Case Summary Lehman Brother Holdings, Inc. was the largest corporate bankruptcy in U.S. history. The court appointed bankruptcy examiner released a 2,200-page report which found Lehman’s executives and their auditing firm Ernst & Young (E&Y) liable. The report revealed that Lehman was using multibillion-dollar “accounting-motivated” transactions to embellish their company’s financial data and reducing the net leverage ratio (dividing total assets by total stockholder’s equity), which interested
who was in violation or compliance with the AICPA’s Code of Professional Conduct and the reasons they were or were not complying. This paper will also analyze the actions taken by Cardillo’s outside auditors, evaluate the level of efficiency of the audit risk management, determine whether or not the five components of internal controls were being properly followed and argue for or against whether auditors have a responsibility to assess the judgment of the decisions made by Cardillo’s management.
Lehman Brothers Holdings, Inc. (Case 1.2) Case Summary When Lehman Brothers filed for bankruptcy in September 2008 it was the largest corporate filing in our country’s history. Lehman Brothers Holdings Inc. declared $639 billion in assets and $613 billion in debt (Florescu, 2017). The filing of Lehman Brothers bankruptcy created a mass panic in the financial markets which caused an economic shockwave in both the U.S and foreign markets. Lehman’s collapse aggravated global financial markets for
AcF 100 Introduction to Accounting and Finance Lent Term: Individual Coursework Essay Topic: Why is it important for external auditors to be independent? Relate your answer to the primary role of external auditors. Give examples of specific ways the lack of auditor independence may impact adversely on an audit. In 2001, there was an event that had shaken the whole business world. The crash of Enron in US, followed by worldwide collapse of its auditor,
words AcF 100 Introduction to Accounting and Finance Lent Term: Individual Coursework Essay Topic: Why is it important for external auditors to be independent? Relate your answer to the primary role of external auditors. Give examples of specific ways the lack of auditor independence may impact adversely on an audit. In 2001, there was an event that had shaken the whole business world. The crash of Enron in US, followed by worldwide collapse of its auditor, Arthur Andersen.
appeared to be on budget. Questions 1. Place yourself in Hamilton Wong’s position. Would you report all of your time worked on the Willie & Lomax audit? Why or why not? Do you believe that Lauren Hutchinson behaved unethically by underreporting the time she worked on that engagement? Defend your answer. Ans. It is unfortunate that independent audit teams have to perform in a broken system where underreported hours are rewarded. Being labeled as “fast-track superstars” for underreporting hours was