accounting, and misleading investors. On June 28, 2005, a judge accepted plea bargains from 11 of those charged and sentenced them to prison ranging from 10 months to 2.5 years. In his January 2008 trial, Calisto Tanzi was found guilty of securities laws violations and was sentenced to 10 years in prison for his role in the fraud. More than two years later, in December 2010, Tanzi was also found guilty of fraudulent bankruptcy and criminal association and sentenced to an additional 18 years in jail. After he unsuccessfully appealed that verdict in 2011, the court added another nine years to his sentence. He should be about 105 years old when he is finally released. DISCUSSION QUESTIONS 1. What steps does an auditor ordinarily take when confirming cash balances held on deposits with financial institutions? 2. What additional steps should the auditors have taken when they received the smudged fax copy printed on Bank of America letterhead? 3. What red flags did the auditors miss in the Parmalat case? Please be specific. 4. What steps should Deloitte & Touche SpA have taken with respect to Grant Thornton's audit of the Cayman Island subsidiaries