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Zzzz Best

Decent Essays
Ernst & Whinney had an obligation to be independent, objective and with due care.Objectivity requires that an auditor should be skeptical and obtain independent evidence to verify information from the client. Ernst & Whinney failed to meet this obligation when they did not require corroboration of the insurance restoration contracts from independent third parties. When Ernst & Whinney resigned from the audit engagement,they had a professional obligation to disclose the reason for the withdrawal.
Due care requires that an auditor discharges professional responsibilities with competence and diligence. It imposes the obligation to perform professional services to the best of the auditor’s ability with concern for the best
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It imposes the obligation to perform professional services to the best of the auditor’s ability with concern for the best interest of the public.

1. I think that auditors should be held liable for failing to discover fraud. There are many ways the fraud could have been discovered over the years if the auditors performed an objective audit that followed rules and regulations. It is an auditor’s obligation to perform an audit with objectivity, skepticism, independence, and objectivity. Ernst & Whinney failed to meet these criteria. The auditors did not follow professional skepticism because when Minkow asked them to sign a confidentiality agreement to not follow up with any contractors, insurance companies, or building owners. This is not something to simply accept from Minkow. Ernst clearly did not perform a thorough audit and did not perform the necessary tests for reasonableness. 2. Ernst and Whinney should have seen a red flag from the start because there was an unreasonable growth in his company and he lived an extremely extravagant lifestyle. Minkow also had problems meeting his loan debt and there were many inconsistencies in ZZZZ invoices. I think that the relationship between Ernst and ZZZZ did influence the risk assessment and the work done in the audit. Because Ernst did not want to lose ZZZZ as its biggest client, the work was not done objectively. There was a bias because Ernst wanted to keep the “wiz” of wall
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