Question: 1 Auditors are required to assess fraud risks as part

1. Auditors are required to assess fraud risks as part of their ethical and professional responsibilities. What characteristics of Nortel might have caused it to be identified as a high-risk audit? Use the fraud triangle in answering this question.
2. In the Ontario Superior Court ruling, Justice Marrocco “found that the accounting manipulations that caused the company to restate its earnings for 2002 and 2003 did not cross the line into criminal behavior.” Marrocco added he was “not satisfied beyond a reasonable doubt” that the trio [i.e., Dunn, Beatty, and Gollogly} had ‘deliberately misrepresented’ financial results.
Review the accounting manipulations in the case and answer the following questions:
a. What types of “financial shenanigans” were used by the trio to manipulate earnings?
b. Do you agree with the decision of Judge Marrocco in not holding the trio legally liable? Why or why not?
3. Trust is an essential element in the relationship between the external auditor and top management. Evaluate the actions taken by the defendants with respect to its relationship and responsibilities to the Deloitte & Touche auditors, their fiduciary responsibilities as the head of Nortel and corporate governance in general.

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