Madoff Ponzi Scheme

1249 Words5 Pages
Madoff Ponzi Scheme 1.Recent Developments * February 4, 2009 The whistle blower Harry Markopolos has told his nine years of warnings to SEC officials without making any action. * Oct. 2, 2009.Jeffrey Picower, one of the greatest beneficiaries of the scheme, was found dead at the bottom of his pool. According to the autopsy report, he suffered a massive heart attack while in the swimming pool resulting in accidental drowning * December 12, 2010.Mark Madoff, son of Bernard Madoff, committed suicide and was found dead in the living room of his apartment. According to his friends, he was hopeless of the burden he had to carry which made it difficult for him to rebuild his life. * June 29, 2012. Peter Madoff, brother of…show more content…
2. 10% of a total asset of a large investment firm is material and really great in amount. An independent auditor has a responsibility of exercising professional skepticism. The smooth flow of Madoff stock exchange should not imply integrity over the firm’s operations, so the auditor’s should maintain a questioning mind especially in dealing with that 10% investment. The independent auditors should thoroughly understand the operations of Madoff and check the competence of those who are currently auditing the company to obtain reasonable assurance that Madoff’s operation is free from anomalies. If possible, the independent auditors should investigate recorded complaints against Madoff operations and determine how it would affect the investment of the investment firm. 3. Peer review is the evaluation of work by one or more people of similar competence to the producers of the work. It constitutes a form of self-regulation by qualified members of a profession within the relevant field. Peer review methods are employed to maintain standards of quality, improve performance, and provide credibility. Peer reviews enables the members to produce a competent and credible work by evaluation of other members of the group. If Friehling and Horowitz conducted peer reviews, there is a possibility that they would have discovered Madoff’s fraud. The fact that Friehling and Horowitz didn’t perform audit,
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