The chapter describes a fraud at Adelphia Communications and the failure of Deloitte & Touche to detect
Question:
a. What does it mean to identify a client as being “high risk”? How did the auditor make this determination? How does the audit of a high-risk client differ from that for a low-risk client?
b. When the SEC holds the auditor responsible for detecting the fraud, what is it implying about the standards of “sufficient appropriate evidence” and “professional skepticism” for the audit? Was the auditor’s performance consistent with these standards?
c. Describe how the assessment of Adelphia as a “high-risk” client should affect the nature, timing, and extent of audit procedures? Do you believe that Deloitte & Touche met these standards?
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Related Book For
Auditing and Assurance Services An Applied Approach
ISBN: 978-0073404004
1st edition
Authors: Iris Stuart
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