KPMG filed a civil lawsuit against Diligence, Inc., in 2005 after learning of the “sting operation” that firm had perpetuated on Guy Enright. What rationale or legal principles would have been the basis for that lawsuit? Do you believe that KPMG would have been successful if it had pursued that lawsuit rather than settling it out of court? Assuming that KPMG believed it would ultimately win a civil judgment against Diligence, why would the accounting firm choose to settle the lawsuit out of court? Explain.
Answer to relevant QuestionsDo you believe that Bill Grant was justified in refusing to provide the requested Work-papers to the grand jury? Explain.What factors may have motivated Jermell Marshall to go to such great lengths to help Rojas? Do you believe that Marshall acted “prudently” in dealing with Rojas?Vaughn obviously questioned Walker’s personal integrity. Is it possible that one can fulfill the responsibilities of a professional role while lacking personal integrity? Why or why not?What measures can accounting firms take to reduce the likelihood that personal rivalries among auditors of the same rank will become dysfunctional?What method would you have recommended that Avis or her colleagues use in deciding whether the cutoff errors she discovered had a material impact on Lowell’s year-end financial statements? Identify the factors or ...
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