1) What is the responsibility of management and the auditor with respect to the internal controls of a client?
2) Groupon disclosed a "material weakness" in its internal controls saying that it had failed to set aside enough money to cover customer refunds. Do you believe the company engaged in fraud with respect to customer refunds? Why or why not?
3) Groupon blamed EY for the admission of the internal control failure to spot the material weakness. Do you agree that EY should have spotted the internal control weakness earlier and take appropriate action? Include in your response the role that risk assessment should have played in EY's actions.
Read the case study "Groupon" and answer the above questions.