ZZZZ Best‚ Inc. The start of ZZZZ Best: ZZZZ Best started as a carpet cleaning company. Barry Minkow founded ZZZZ Best in his parents’ garage in 1982 when he was only sixteen years old. Due to high competition in the industry‚ low enter barriers‚ and bad internal control‚ this young entrepreneur started to have cash flow problems‚ and a shortage of working capital. Pressure Leads to Fraud: Under financial pressure‚ Minkow started to commit fraud. He forged credit card applications‚ staged
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1. Ernst & Whinney never issued an audit opinion on financial statements of ZZZZ Best but did issue a review report on the company’s quarterly statements for the three months ended July 31‚ 1986. How does a review differ from an audit‚ particularly in terms of the level of assurance implied by the auditor’s report? A review engagement is needed to obtain basis for providing what is known as limited assurance. This gives the client’s financial statements to be prepared properly with GAAP (Generally
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Case 1.9 ZZZZ Best Company‚ Inc‚ 1. Ernst & Whinney audit firm suffered tremendously from the backlash of ZZZZ Best’s case. One of the issues stemming from ZZZZ Best’s case is the difference between a review and an audit as evidence by civil suit filed by a California bank against the firm. The bank claimed that its decision to grant ZZZZ Best’s loan was based on the opinion of Ernst & Whinney review of ZZZZ Best’s financial statements period ending July 31‚ 1986. The case was ruled in favor
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ZZZ Best Company Inc. ZZZ Best Company‚ Inc. is good example for being explored by accounting students regarding audit field. In this case‚ ZZZ Best Company‚ Inc.‚ which is established by Barry Minkow‚ became a tool for its owner i. E. Barry Minkow to get money by lying to thrid parties via fictitious insurance restoration project. Difficulties in developing carpet cleaning industry made Barry Minkow think to get money in wrong way. Collaborate with Tom Padgett and also extensive social
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ACG 4632 ZZZZ Best Case Questions (40 points) 1. Identify the primary audit objectives that auditors hope to accomplish by: * Confirming a client’s year-end accounts receivable‚ and (Balance related existence) * Performing year-end sales cutoff tests. (transaction-related objective timing) (5 points) 2. Ernst & Whinney never issued an audit opinion on financial statements of ZZZZ Best but did issue a review report on the company’s quarterly statements for the three
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------------------------------------------------- ------------------------------------------------- ZZZ Best Company‚ Inc. ------------------------------------------------- Case Study 2 ------------------------------------------------- Due Date: March 30‚2010 ZZZ Best‚ Case 1. Ernst & Whinney never issued an audit opinion on financial statements of ZZZZ Best but did issue a review report on the company’s quarterly statements for the three months ended July 31‚ 1986. How does a
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ZZZZ Best Company Inc. Introduction This paper explores the ZZZZ Best Company which was begun by a 16 year old individual who was able to pull the wool over the eyes of many customers‚ investors and auditors. This paper will define the difference between review and audit when it comes to financial reports‚ comments on the procedures provided with regard to the management assertion of occurrence‚ verification of payments for jobs and how they can lead auditors to improper conclusion‚ the purpose
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Case Study – ZZZ Best‚ Inc. 1. Ernst & Whinney never issued an audit opinion on financial statements of ZZZZ Best but did issue a review report on the company’s quarterly statements for three months ended July 31‚ 1986. How does a review differ from an audit particularly in terms of the level of assurance implied by auditor’s report? A quarterly review report is issued by a CPA and reviewed by an auditor to provide assurance that the financial statements are fair and follow the GAAP standards. Quarterly
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ZZZZ Best company is one of the biggest examples of Accounting Frauds. The founder of ZZZZ best was Barry Minkow. He was a very smart young entrepreneur when he started the company. He was involved in credit card forgeries prior to starting his own carpet cleaning business “ZZZZ Best Company”. Minkow began his business with small carpet cleaning jobs and he became a multimillionaire in a very short period of time. Minkow met a person named Tom Padgett at Los Angeles Health club. This was the beginning
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ZZZZ Best Case: 1. According to the Public Company Accounting Oversight Board (PCAOB) AS 2610 .09 and .03 successors have the responsibility to obtain information regarding a new audit client from the clients’ previous auditor however‚ auditors may submit a proposal to conduct an audit engagement before this condition is fulfilled. The purpose for this communication is to ensure that the new auditor can interpret the trustworthiness and integrity of the proposed client. Information that might affect
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