Consult Paragraphs 58 of PCAOB Auditing Standard No. 8 and Paragraphs 710 of PCAOB Auditing Standard No.

Question:

Consult Paragraphs 5–8 of PCAOB Auditing Standard No. 8 and Paragraphs 7–10 of PCAOB Auditing Standard No. 12. Based on your understanding of inherent risk assessment and the case information, identify three specific factors about Madoff Securities’ business model that might cause you to elevate inherent risk if you were conducting an audit at Madoff Securities.