The Securities and Exchange Commission (SEC) regulates public companies. The SEC has found that some of these companies have violated GAAP by using creative accounting practices to mislead investors and creditors regarding the health of their company.
Use the Internet or to research a recent accounting scandal within the last five years where the SEC accused public companies of accounting irregularities.
Instructions
Write a 34 page paper in which you:
- Analyze the audit report that the CPA firm issued. Ascertain the legal liability to third parties who relied on financial statements under both common and federal securities laws. Justify your response.
- Speculate on which statement of generally accepted auditing standards (GAAS) that the company violated in performing the audit.
- Compare the responsibility of both management and the auditor for financial reporting, and give your opinion as to which party should have the greater burden. Defend your position.
- Analyze the sanctions available under SOX, and recommend the key action or actions that the PCAOB should take in order to hold management or the audit firm accountable for the accounting irregularities. Provide a rationale for your response.
- Use the to locate at least two quality academic resources in this assignment. Note: Wikipedia and other similar websites do not qualify as academic resources.
This course requires the use of Strayer Writing Standards. For assistance and information, please refer to the Strayer Writing Standards link in the left-hand menu of your course. Check with your professor for any additional instructions.
The specific course learning outcome associated with this assignment is:
- Recommend sanctions for accounting irregularities based on an audit report, auditing standards, and financial reporting responsibilities.
First and foremost, youll need to select a recent case of accounting violations (i.e. fraud, restatements due to the incorrect application of GAAP, etc.), one reported in 2014 or after (trust me, there are tons of them).
Next, youre going to use that case as the basis for your paper in which you address four key sections. To ensure that youre giving each section adequate attention, I recommend labeling the sections in your paper (i.e. Section 1, Section 2, etc.). In summary, the four sections are:
- Analyze the audit report that the CPA firm issued. Ascertain the legal liability to third parties who relied on financial statements under both common and federal securities laws.
- Speculate on which standard of generally acceptable auditing standards (GAAS) that the company violated in performing the audit. [Remember that we have studied these standards extensively.]
- Compare the responsibility of both management and the auditor for financial reporting and give your opinion as to which party should have the greater burden.
- Analyze the sanctions available under SOX and recommend the key action(s) that the PCAOB should take in order to hold management or the audit firm accountable for the accounting irregularities.
I have a couple of other recommendations to help to ensure that you earn maximum credit on the assignment:
- Provide a short but inviting introduction paragraph that introduces your reader to the topics that youll be discussing.
- Address each of the four sections completely and thoroughly using your own words and analysis as much as possible (limit the use of direct quotations).
- Prepare a clear and concise summary paragraph that highlights your conclusions based on the analysis of each section.
