List three types of consulting services that audit firms are now prohibited from providing to clients that are public companies. For each item, indicate the specific threats, if any, that the provision of the given service could pose for an audit firm’s independence.
Answer to relevant QuestionsFor purposes of this question, assume that the excerpts from the Powers Report shown in Exhibit 3 provide accurate descriptions of Andersen’s involvement in Enron’s accounting and financial reporting decisions. Given ...When Lehman was developing its Repo 105 accounting policy, did E&Y have a responsibility to be involved in that process? In general, what role should an audit firm have when a client develops an important new accounting ...E&Y is a defendant in Lehman-related lawsuits filed in both state and federal courts. Identify the factors that influence E&Y’s legal exposure between lawsuits filed in state courts versus those filed in federal courts.Under what circumstances is an inventory rollback or roll-forward typically performed? How valid is the evidence yielded by this audit procedure? Explain.Explain why the SEC ruled that BDO Seidman’s independence was jeopardized by the lawsuits that named the accounting firm, Leslie Fay, and top executives of Leslie Fay as codefendants.
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