Question: 1. What are several red flags that E&Y either was or should have been aware of in the audit of Health South? 2. What procedures

1. What are several red flags that E&Y either was or should have been aware of in the audit of Health South?
2. What procedures can auditors perform to detect fraudulent entries made during the consolidation process?
3. How can auditors determine the true "tone at the top" of a company?
4. What is the appropriate response by auditors to information from "disgruntled" employees?
5. HealthSouth has sued Ernst & Young and Ernst & Young is also the target of a federal securities class action suit. What are Ernst & Young's likely defenses against HealthSouth? These are against the class action suit?
6. HealthSouth concealed the fraud by keeping the fraudulent transactions below $5,000. What recommendation would you have to Ernst&Young to improve its sampling practices?

Step by Step Solution

★★★★★

3.36 Rating (171 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

1 EY was aware that there was an undue emphasis on analysts reaction to quarterly profits They were also aware of the centralized power exerted by Scr... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1019-B-C-A-C-P-A(3435).docx

120 KBs Word File

Students Have Also Explored These Related Cost Accounting Questions!

1. What are several methods that crooks use to steal your identity? 2. How do you discover that someone has stolen your identity? 3. What steps can you take to thwart identity thieves? 4. What...

In June 2009, Deloitte agreed to pay almost $1 million to settle a class action lawsuit related to its audits of Beazer, a homebuilding company. The lawsuit claims that Deloitte should have noticed...

The 'Apply your knowledge' question in this chapter referred to Australian Securities and Investments Commission (ASIC) taking the directors of Centro to court over the misclassification of...

Please answer questions 1 and 2. Please try to quote from the Accounting Standards In 1996, key executives of HealthSouth, one of the nation's largest providers of health care services, began a...

1.Write about E&Y's inability to uncover fraud because of their threshold limitation. Answer the first question. 1,5 pages, citations req. See attachment Unhealthy Accounting at HealthSouth PROBLEM...

Unhealthy Accounting at HealthSouth PROBLEM In 1996, key executives of HealthSouth, one of the nation's largest providers of health care services, began a massive fraud that eventually amounted to...

Unhealthy Accounting at HealthSouth PROBLEM In 1996, key executives of HealthSouth, one of the nations largest providers of health care services, began a massive fraud that eventually amounted to...

1 . What are several red flags that E&Y either was or should have been aware of in the audit of HealthSouth? 2 . What procedures can auditors perform to detect fraudulent entries made during the...

Read the below scenario and answer the question that follows. BXW Ltd manufactures three different units (E. F, and G) using the same machinery and processes. You are provided with the following...

A construction worker was covering the bathroom wall with tiles. He covered three-fifths of the wall with 50 tiles. How many tiles will it take to cover the entire wall?

1 . Some people argue that liquidity management should be the task of central banks, not financial institutions themselves. Thus, financial institutions should focus on providing financing to the...

Exercise 5.9. Prove Theorem 5.8.

Disk A rotates in a horizontal plane about a vertical axis at the constant rate of 0 =15 rad/s. Slider B has a mass of 230 g and moves in a frictionless slot cut in the disk. The slider is attached...

A 1.5-kg collar is attached to a spring and slides without friction along a circular rod in a vertical plane. Knowing that the tension in the spring is70 N and the speed of the collar is 3.8 m/s as...

The two blocks are released from rest when r = 2.4 ft and d = 30?. Neglecting the mass of the pulley and the effect of friction in the pulley and between block A and the horizontal surface,...

Capital budgeting is best defined by which of the following questions? A ) How will we manage our day - to - day financial needs? B ) What business are we in ? C ) How will we fund our product and...

On July 1, Twin Pines Co., a water distiller, acquired new bottling equipment with a list price (fair market value) of $435,000. Twin Pines received a trade-in allowance (fair market value) of...

The Davidson Corporation's balance sheet and income statement are provided here. Davidson Corporation: Balance Sheet as of December 31, 2014 (Millions of Dollars) Assets Liabilities and Equity Cash...