Essay on Stanford Auditing Case

Two of the three partners of the firm that performed the audit for the district had 55% ownership in the company that sold the district its financial management software “finance manager”. The partners’ role as vendors violated the general standard of independence under generally accepted government auditing standards. Also the auditors received a commission from the sale of another software called “student manager” and receiving commissions is prohibited by the AICPA. Also there were fundamental problems with their audit planning and efforts to test financial records. The CPA firm work that was so flawed and so far below professional standards that it failed to identify the millions that were stolen.

in order to obtain stronger or more persuasive evidence, the “bank balance” reported by the

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Ann Inc. has a seven member Board that serves the interest of Ann Inc. and its investors. Four of the seven members of the Board of Directors would be considered to be Independent Members by the SEC rules. Five of the presiding members are listed:

Quality Objectives - The quality objectives define measurable goals relative to the company's quality management system. Requirements on the quality objectives are in ISO 9001:2008 section 5.4.1.

Title I of the SOX comprises the creation of the Public Accounting Oversight Board (PCAOB) (Sarbanes-Oxley Act, 2002). The PCAOB is a private-sector, nonprofit corporation which oversees the auditors of public companies. It is to protect the interests of the investors and to further the public interest when preparing informative, fair, and independent audit reports. The title consists of 9 subsections. Section 101 describes the establishment of PCAOB, which consists of 5 full time members, 2 of which are CPAs, all selected by the SEC (Philipp, CPA, & CGMA, 2014). Section 102 states that public accounting firms are required to register with the PCAOB in order to issue or prepare in the issuance of an audit report to an issuer (Philipp, CPA,

AICPA Code of Professional Conduct principles prevents vises such as fraud that are experienced in accountancy field. Audit is the best measure of the effect of the fraud that are imposed to investors by accountants. The relationship of the investors and account holders are supposed to be affirmed through auditing to ensure accounting principles are upheld(Weirich, Pearson, & Churyk, 2010). Improper loss of the funds through propagation of the accountant officer should be treated as fraud and criminal activity that should lead to prosecution. Therefore, the paper seeks to relate two fraud cases that have been audited and presenting AICPA Code of

In the present day forensic accounting plays a huge role in many of the court cases publicized by the media. With the spotlight on the profession, this is a good opportunity to discuss the following topics:

Martha Stewart Living Omnimedia is primarily comprised of a magazine publication and a television show created by home décor aficionado, Martha Stewart. Both sources of media primarily feature home renovating and decorating products. Also, having an emphasis on do it yourself (DIY) projects for a more stylish and satisfying home. Stewart herself, described Martha Stewart Living as, “the most trusted guide to stylish living.” While MSLO brings in revenues from those looking to decorate their homes and a significant portion of revenues comes from air time and in-show brand/product mentions, the majority of revenues for Martha Stewart Living Omnimedia comes from their publishing branch.

Additional concerns have been made in regards to the red flags missed by auditors. First of all, auditors should have been alarmed by the size of the cash account held in the Cayman Islands. Auditors should have remained skeptical about the existence of this account. They should’ve addressed this red flag with

Merry-Go-Round (MGR) is a clothing retailer that was founded in 1968. The company’s locations were in malls that targeted the youth and teen market. In the late 1980s, the company was listed by Forbes magazine as one of the top 25 companies. By the early 1990s, sales fell due to stiff competition from other retailers. Facing bankruptcy, the company hired turnaround specialists from Ernst and Young (E&Y) to help overcome the financial crisis. However, the company filed for Chapter 11 reorganization and due to that a group of 9,000 creditors filed a lawsuit against E&Y saying they were the main reason for MGR’s decline.

The illegal construction of the Bernie Madoff securities pyramid scheme grew to preposterous proportions from legal, auditing, and regulatory weaknesses of the Securities Exchange Commission, the designated regulatory body of the U.S. financial markets. The required expertise, authority, and relevant penalties needed to deter management from committing ethical breaches lacked substance in the case study of BMIS (Crews 11). Even after the wake of the Enron and WorldCom scandals that occurred in the early 2000s, the SEC unexplainably revoked provisions created to help avoid fraud. The provision the SEC revoked specifically mandated firms structured like Madoff’s to be audited by accounting firms registered and audited by the Board. By revoking the provision, BMIS was allowed to continue its Ponzi scheme for another half a decade with the aid of utilizing an unregistered, small accounting firm called Freihling & Horowitz (“Madoff’s Jenga”

* On the job training is the primary method for employees to learn policies and procedures.

Xerox Corporation is an American multinational archive administration company. It delivers and offers a scope of shading and highly contrasting printers, multifunction frameworks, scanners, advanced generation printing presses, and related counseling administrations and supplies.

The Stanford Financial Group Company was a privately owned international group that specialized in financial services under the control of Allen Stanford. Allen Stanford controlled the financial company until United States authorities seized in at the end of 2009 due to what came to be known as "Ponzi scheme or scandal." Among its many groups was the Stanford International Bank, with more than 50 offices in 136 countries around the globe. The company offered diversified financial services such as brokerage and investment advisory, private and commercial banking, advising clients on