Asa 701 Case Study

Another area that Lehman Brothers erred was the misrepresentation of the disclosure of the repos transactions. What is surprising was Ernst and Young’s failure to detect the frequency of the timing of the transactions. Again, Ernst & Young should have realized that Lehman had breached the US Generally Accepted Accounting Principles (GAAP) requirement of ensuring that all significant events that are potential to a firm’s financial statements should be disclosed.
Reasons for Issuing ASA 701
The AUASB issues Auditing Standard ASA 701 Communicating Key Audit Matters in the Independent Auditor’s Report pursuant to the requirements of the legislative provisions and the Strategic Direction explained below. The AUASB is an independent statutory