Maria Messina testified that when she learned of the accounting irregularities at Livent shortly after becoming the company’s CFO she felt “guilty by association,” which prevented her from revealing the fraud to regulatory or law enforcement authorities. Explain what you believe she meant by that statement. Place yourself in Messina’s position. What would you have done after discovering the fraudulent schemes affecting Livent’s accounting records?
Answer to relevant QuestionsWhat professional standards apply to “due diligence” investigations performed by accounting firms?Identify audit procedures, other than a walk- through test that might have resulted in Grant Thornton discovering that Fred Greenberg was tampering with JGI’s delivery receipts.Analyze Take- Two’s 1998-2000 financial data included in Exhibit 1. Compute the following financial ratios for each of those years: age of accounts receivable, age of inventory, gross profit percentage, profit margin ...Under what general circumstances should auditors retain outside experts to assist them in completing an audit? How could an expert be useful in auditing a client’s pension-related financial statement items?In early 1994, E&Y officials discovered that the CBI auditors had failed to determine the true nature of the “advances” they had uncovered during the 1992 and 1993 audits. In your view, did E&Y have an obligation to ...
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