Question

1. How would you characterize Dell’s accounting for the exclusivity payments with respect to the financial shenanigans discussed in this chapter?
2. Joseph E. Abbott, the vice president and controller of West Pharmaceuticals Service, Inc., in Lionville, Pennsylvania, once said: “Investors should remember that if we do see companies start hitting estimates and not beating them, that wouldn’t be such a bad thing. It could mean there is less earnings management going on.” How does this statement relate to the actions of Dell in this case?
3. Identify the red flags that should have alerted PwC that Dell may have been engaging in fraud. Given that Dell was issued clean opinions during the fraud years, do you think it is possible that the firm conducted its audit in accordance with GAAS? Why or why not?
4. Do you agree with the statement from Dell that the actions taken were only negligent and not fraudulent? Explain your reasoning by using the discussion of legal liability in Chapter 6 for support.



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  • CreatedDecember 30, 2014
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