week 3 discussion question and assignment 1
Answer the questions on the discussion question and the assignment. Please be advised that the work will be checked by turnitin.com for plagrism.Questioins is taken from Rittenberg, L. E., Johnstone, K., Gramling, A., & Knapp, M. C. (2012). Auditing: A Business Risk Approach with Cases (8th ed.).
1a.From the case study, use the ethical framework to propose a course of action that you would take concerning the audit. Provide a rationale for your response.
1b.Imagine that you work for an audit firm and the firm selected you to assess its auditor independence and the potential threats to the firm. Determine at least two (2) potential threats to auditor independence and recommend one (1) strategy for the firm to eliminate or mitigate those threats you determined.
Assignment 1: Madoff Securities
Review the Madoff Securities case, located in Chapter 6 of your textbook.
Write a four page paper in which you
- Determine the regulatory oversight that was in place while the Ponzi scheme was operating, and speculate on the main reasons why they did not discover the scheme.
- Assume you are an auditor for a firm that had $10 million dollars invested in Madoff Securities.
- Determine the fundamental audit procedures that you should have applied to this investment.
- Predict the way in which a peer review of Friehling and Horowitz would have uncovered the scheme related to Madoff Securities.
- Pretend you are Harry Markopolos and suggest one (1) strategy, different from that of the case study, to expose the potential fraud. Provide a rationale to support the suggestion.
- Analyze the role of the audit committee for Madoff Securities in regard to the discovery of Ponzi scheme, and suggest one (1) action the audit committee could have taken in order to prevent or detect the fraud. Provide a rationale to support the suggestion.
- Use at least two (2) quality academic resources in this assignment. Note: Wikipedia and similar type Websites do not qualify as academic resources.
Your assignment must follow these formatting requirements:
- Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
- Include a cover page containing the title of the assignment, the student’s name, the professorâ€™s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:
- Analyze the requirement for the profession of auditing and the integral role that independence assurance plays within the economy.
- Examine the corporate governance of audits including the professional, regulatory, and corporate managerial requirements.
- Use technology and information resources to research issues in auditing.
- Write clearly and concisely about auditing using proper writing mechanics.