case study1.Briefly summarize issue2. What accounting issue led to the problem?3.Recommendations &...

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case study1.Briefly summarize issue2. What accounting issue led to the problem?3.Recommendations & Reasoning4. answer the questions

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CASE STUDY:
 
CASE STUDY: 
LIGAND PHARMACEUTICALS CASE 
 

BRIEF SUMMARY  
The Sarbanes Oxley act had prompted the foundation of the Public Company Accounting 
Oversight Board (PCABO) in 2004. In December 2007, bookkeeping firm Deloitte and Touche 
were forced a fine of $1 million for its defective work for the Ligand Pharmaceuticals in the 
primary major disciplinary case recorded by the PCABO since its beginning. James L. Fazio, the 
Deloitte bookkeeper who took care of a 2003 review of Ligand Pharmaceuticals, was banished 
from surveying the books of open organizations for no less than two years, as he neglected to 
satisfy his obligation of dissecting and announcing engagement hazard as an Engagement Partner 
of the organization. The Ligand Pharmaceuticals was downplaying its remittance for return of 
products sold to the wholesalers by gigantic sum when contrasted with the rate of return 
experienced by the organization. After the revelation of the extortion, the money related 
rehashing issued by the organization in 2005, lessened organization's already detailed incomes 
by 52% or $59 million. 
ACCOUNTING ISSUE 
Fazio was delegated to access the 'engagement risk' postured by the audit of the company in 
2003. It was seen that Ligand was required to record a reserve for the business returns of goods 
sold to its wholesalers. Despite the fact that the rate of return experienced by the organization 
was 13%, only 2.5% was the return rate used to decide the recompense for returns. Such 
misrepresentation could have been effortlessly distinguished and checked upon by the evaluators,

case study1.Briefly summarize issue2. What accounting issue led to the problem?3.Recommendations & Reasoning4. answer the questions

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