1. In the case, Judge Kaplan dismissed Parmalat’s lawsuit against Deloitte stating that Parmalat “did not show that poor auditing of Parmalat USA was equivalent to fraud.” Comment on the judge’s decision from the perspective of the auditor’s obligation to identify fraud in the financial statements.
2. Based on the information in the case, classify the improper transactions engaged in by Parmalat into one of the seven “financial shenanigans” identified by Schilit in Chapter 7. Explain why each transaction violated professional standards.
3. Who is to blame for the fraud at Parmalat: the company? ; top management?; the auditors?; the Bank of America? How did each party violate its ethical obligations?