AFM 201 – Part 1 Auditing Fall 2007 Group Assignment 2 Publicized Cases of Alleged Audit Failures Involving Large Public Companies 1) Ten Publicized Audit Failures i. Parmalat (2003) - Deloitte & Touche Tohmatsu /Grant Thornton Misleading investors with “Brazen Fraud” was what the United States (US) Securities and Exchange Commission (SEC) had sued Parmalat for in 2003. It all began when Parmalat defaulted on a bond payment worth $185 million. This raised a flag for auditors and banks
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Arthur Andersen was one of the ’Big 5 ’ accounting firms‚ the others being PricewaterhouseCoopers (PWC)‚ Deloitte Touche‚ Ernst and Young‚ and KPMG. Throughout the 1980 ’s and 1990 ’s‚ these five companies provided auditing and tax services to most of the west ’s major companies. However‚ in 2002 Arthur Andersen ’s licences to practice as Certified Public Accountants (CPA ’s) in the US were voluntarily surrendered by the company in the wake of criminal charges relating to the Enron scandal. Although
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THE ROLE OF AUDITORS IN THE CONTEXT OF CORPORATE GOVERNANCE Asst. Prof. Loganathan Krishnan Abstract Auditors examine company’s accounts and report to the company on the accounts. Fundamentally‚ the concern is how auditors carry out these duties effectively. Legislations namely Companies Act 1965‚ Securities Industry Act 1983 which has been consolidated as Capital Market and Services Act 2007 have made major inroads to ensure that auditors carry out their duties and obligations effectively. Additionally
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Lesson Learn From Enron and Arthur Anderson The story of Enron and Arthur Anderson is a tale of great dishonest within the American Global financial system. Arthur Anderson L.L. P once one the highest paid accounting firms in the U.S now in shamble after a U.S. lawsuit. Enron once named “America’s Most Innovative Company” by Fortunes magazine. Two or the countries best companies‚ now the country most well know financial debacle The lesson that was learned in Arthur Anderson and Enron financial
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com/sites/francinemckenna/2012/12/21/pwc-and-thomson-reuters-in-china-u-k-business-alliance-violating-auditor-independence/ [Accessed 05 February 2013] Kim‚ K. et al (2009) Corporate Governance‚ Third Edition‚ Prentice Hall‚ USA SEC (2013) ‘SEC Charges Deloitte & Touche for Adelphia Audit. 2013. SEC Charges Deloitte & Touche for Adelphia Audit’ [Online] Available at: http://www.sec.gov/news/press/2005-65.htm [Accessed 05 February 2013 Sherer‚ M. & Turley‚ S. (2007) Current Issues in Auditing‚ Third Edition‚ SAGE Publications‚ London Van
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Sunbeam’s stock. Bill and hold isn’t illegal‚ but Sunbeam’s shareholders felt deceived and filed lawsuits. Sunbeam’s accounting firm‚ Arthur Andersen (later ruined by its involvement with Enron)‚ performed an audit and reported that Sunbeam’s books were accurate and in accordance with federal guidelines. However‚ the board was unsatisfied and hired Deloitte & Touche to review Arthur Andersen’s audit. This follow-up uncovered proof that the numbers had
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Case # 1 Andersen: An Obstruction of Justice? P. C1 DISCUSSION QUESTIONS 1. Look up the term corrupt in the dictionary. What is its definition? Was corrupt appropriately applied to the actions of Arthur Andersen? 2. The issues that overturned the Andersen verdict were based on faulty jury instructions‚ not on whether Andersen was in fact guilty or innocent. Based on the information in this case and other information you know‚ do you believe Andersen violated the law? 3. Do you believe that the
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the overall of case study‚ Arthur Andersen: Questionable Accounting Practice‚ we have identified a few facts. The following subsection will present the facts. 1.1 ARTHUR ANDERSEN Arthur Andersen LLP was founded in Chicago in 1913 by Arthur Andersen and partner Clerence DeLeny. Over a span or nearly 90 years‚ the Chicago accounting would became known as one of the “Big Five” largest accounting firms in the United States together with Deloitte & Touche‚ PricewaterhouseCoopers‚ Ernst &
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Anti Fraud Programs and Controls (Deloitte) What is Fraud? The Public Company Accounting Oversight Board (PCAOB) defines fraud as “an intentional act that results in a material misstatement in financial statements that are the subject of an audit. Two types of misstatements relevant to the auditor’s consideration of fraud include: misstatements arising from fraudulent financial reporting and misstatements arising from misappropriation of assets.” There are additional types of fraud that should also
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started working with Huron in May 2002 as president of one of Huron Consulting group’s subsidiaries. Holdren holds a bachelors degree from Miami University‚ and a CPA license. He was a partner and midwest director of global client services at Arthur Andersen LLP from 1991 through 1998. Holdren has
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