Feb 10 Hamilton Case

In this case, there are several conspirators who is involved in the fraud receiving punishment from either SEC or federal government. Robert Levin, the AMRE executive and major stockholder, and Dennie D.Brown, the company’s chief accounting officer, were subject to the punishment in the form of a huge amount of fine by the SEC and the federal government. This punishment came from reasons. After AMRE going public, the company have the obligation to publish its financial reports but its performance did not meet expectation. The investigation by SEC shows that Robert took the first step of this scam, fearing the sharp drop of AMRE’s stock price because of the poor performance of company. He abetted Brown, to practice three main schemes to present a false appearance of profitable and pleasant financial reports. Firstly, they instructed Walter W.Richardson, the company’s vice president of data processing, to enter fictitious unset leads in the lead bank and they originally deferred the advertising cost mutiplying “cost per lead” and “unset leads” amount, so that they deferred a portion of its advertising costs in an asset account. The capitalizing of advertising expenses allowed them to inflate the net income for the first quarter of fiscal 1988. Secondly, at the end of the third and fourth quarters of fiscal 1988, they added fictitious inventory to AMRE’s ending inventory records, and prepared bogus inventory count sheets for the auditors. Thirdly, they overstated the percentage

The media article indicated that Coles was facing more than $4 million fines, as ACCC argued its behaviour of lying about bread freshness could constitute breach of consumer law (SMH 2015). As the total amount of fines could be considerable, along with a negative impact on reputation, Coles could have entered into financial distress. The reason I chose this article was that most Australian people shop in Coles every week, thus the case is closely related to our life which is worth talking about. Besides, the article covered issue of sales and non-compliance of law which often attract auditors’ attention. The event mentioned in the article posed a risk to auditors in terms of inherent risk. Inherent risk means an auditor fails to identify or correctly understand the business risks that could result in material misstatement (Clubb 2015b). It is apparent that Coles’ behaviour is a non-compliance of law, which is included in business risk (Clubb 2015b). Therefore, auditors need to better understand the event highlighted in the article to increase the possibility of uncovering material misstatement. Auditors are held accountable for the problem because the problem may relate to potential misstatement in financial statements. If an auditor fails to uncover the misstatement, it is likely that he or she will issue a false opinion. However, auditor should express a true and fair view to increase the confidence of the external

Our project team analyzed the Fraud and Illegal Acts Case (True blood Case Studies- Case 08-9), which involves a questionable sales transaction made between Jersey Johnnie’s Surfboard, an SEC registrant, and Mr. Sinaloa, an independent sales representative of the company. As a simplified overview of the case, an external audit firm was hired on to perform a year-end audit of Jersey Johnnie’s Surfboards, Inc. Towards the end of the audit, the engagement partner notified the auditors that there could be a possibility of fraud and illegal acts made by the company.

Grant Thornton should be held liable for its reckless negligence because it ultimately prolonged Keystone bank’s ability to continue to partake in fraudulent activities. If the accounting firm would have held itself to GAAS, generally accepted as the minimum standard of professional conduct in performing an audit, Thornton would have known to exercise “heightened skepticism” during this high risk of fraud. Secondly, GAAS required written confirmations from third parties servicing assets in regards to a bank’s balance sheet. Not only did Thornton fail to obtain this written requirement, it also recklessly relied on an oral statement. GAAS also required in a high risk audit that monthly remittances of interest income on assets being serviced by

Professional auditing standards discuss the three key “conditions” that are typically present when a financial fraud occurs and identify a lengthy list of “fraud risk factors.”

2 Managing fraud risk: The audit committee perspective Fraud in a fi nancial statement audit

Armed with the knowledge mentioned above, BDO Seidman should have planned the Leslie Fay audit so that many risk factors were identified prior to the start of the audit. The company had incentives to commit fraud due to other competitors, including highly successful Liz Clairborne. The customer interest in Leslie Fay’s product was declining, which would have created another incentive for management to commit fraud. Despite the factors mentioned above, Leslie Fay continued to show unusual profitability when compared to other companies in the industry at that time. Further, Pomerantz had a reputation for

On May 19, 1870 the child that would come to be one of the most disturbing serial killers in history was born. Hamilton Fish grew up in Washington D.C. in a working-class family. He seemed to have a normal life up until his father died when young Hamilton was five-years-old. In the aftermath of the death of the Fish family patriarch, the cost of raising Hamilton and his siblings became more than their mother could afford and the children were sent to orphanages. It was at the orphanage that young Hamilton discovered his proclivity for pain. Punishment within the walls of his new home was often doled out with whips and beatings. Eventually, Hamilton found he enjoyed not only being hurt but also seeing the other children abused, admitting that he loved to hear their screams. Nevertheless, Hamilton ran away every weekend in hopes of escaping the relentless abuse from his peers, who taunted him and made fun of his name by calling him Ham-and-Eggs. Fortunately, after three years his mother found employment with the government which paid enough for her to once again support her children. Upon his return home, young Hamilton begged his mother to change his name, citing the taunting he had received. She obliged by bestowing upon him the name of his deceased brother, Albert.

My week three discussion was on a gifted young man from L.A., by the name of Isaac Hamilton. In 2012 the five star recruit signed a letter of intent to attend UTEP and play basketball for a year, however, the L.A.- native had a sudden change of heart. Since UTEP was eleven hours from Las Angeles, Mr. Hamilton felt that he would probably become homesick, plus his grandmother’s health was declining. Therefore, Isaac asked for a release from his letter on July 2013 and was denied by the school; nevertheless, Isaac broke his agreement and went to UCLA. Isaac Hamilton then filed an appeal; the NCAA denied his appeal and enforced him to sit out a year at UCLA. Consequently, he was able to practice, but could not play in any games according to Todd,

Case 10-10 An Offer You Can’t Refuse Fast Eddie, a publicly held company, manufactures and installs refrigeration systems for governmental and commercial applications. Fast Eddie is being investigated by a governmental agency for overpricing on government sales during the period from 2007 through 2009 as well as allegations of misrepresentations by one of Fast Eddie’s former officers, Sweet Lou. The criminal and civil investigations began in late 2009. In the prior fiscal year, the company’s auditors, CPAs-R-Us, obtained management’s representation and a letter from Fast Eddie’s independent legal counsel that indicated that the ultimate outcome of the investigation could not be determined and that any potential payment for the alleged

Potential for misstatement & fraud: Compliance with the established procedures and controls were found to be ineffective. The fraud reporting process, technically put in place does not serve its intended purpose. The ineffective control environment has created an attitude and tone across the company where errors and inappropriate behavior may be seen as acceptable, thus creating opportunity for concealing fraud and potential misstatements.

Campbell offered sizable trade discounts near the end of accounting period to entice customers to make product purchases that they would otherwise defer. By this way, a company can use price concessions to prop up its reported revenues and profits. Plaintiffs pointed out that PwC auditors were aware of the excessive trade loading by their client and this should have been a “red flag” for PwC to investigate the possibility that their client was fraudulently misrepresenting its operating results. The judge agree with the plaintiffs that PwC’s workpapers revealed the firm was aware of Campbell’s disproportionately sales near the end of quarterly reporting periods. However, the he disagreed with the assertion that PwC should have considered those heavy sales a red flag. Instead, he pointed out that PwC’s workpapers referred to the large, period-ending sales as a “traditional” trend in Campbell’s operating results.

There are various procedures that could be taken in to account that would, if properly implemented, would have detected the frauds that occurred within the companies. There are many control risks that should have been taking regarding inventory along with preliminary audit strategies for the inventory and substantive test to be done that would have raised many flags during the typical audits as well as in depth ones.

This essay explores the corporate collapse of Harris-Scarfe on April 3 2001, which before their collapse was Australia’s third largest retail group (Buchanan 2004, p. 55). It will explore the collapse in the context of the auditing framework. In particular, how the financial indiscretions were not discovered by the auditors, which were going on as early as six years prior to the collapse (Buchanan 2004, p. 62). To start with, we define what the auditing objective is in order to work out where it failed in this case. ASA 200.11/ISA 200.11 defines the auditing objective as one that needs to ascertain reasonable assurance that the financial report as a whole is free from misstatement, whether due to error or fraud. In doing so the auditor can give an opinion of whether the financial report was prepared in accordance with the financial reporting framework (Gay & Simnett 2012, p. 12).

The WMI accounting fraud case described a financial fraud committed by senior management of WMI, with the help of Arthur Andersen the external auditors. The case depicts the effort of several years to inflate profits at WMI, employing aggressive accounting practices which enabled the WMI to conceal $1.7 billion in form of expenses (Riley and Rezaee, 12). By eliminating or deferring expenses, WMI managed to meet earnings targets and improve