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The Securities and Exchange Commission (SEC) regulates public companies. The SEC has found that some of these companies have violated GAAP by using creative accounting practices to mislead investors...

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The Securities and Exchange Commission (SEC) regulates public companies. The SEC has found that some of these companies have violated GAAP by using creative accounting practices to mislead investors and creditors regarding the health of their company.

Use the Internet orStrayer Libraryto research a recent accounting scandal within the last five years where the SEC accused public companies of accounting irregularities.

Write a 3–4 page paper in which you:

  1. Analyze the audit report that the CPA firm issued. Ascertain the legal liability to third parties who relied on financial statements under both common and federal securities laws. Justify your response.
  2. Speculate on which statement of generally acceptable auditing standards (GAAS) that the company violated in performing the audit.
  3. Compare the responsibility of both management and the auditor for financial reporting, and give your opinion as to which party should have the greater burden. Defend your position.
  4. Analyze the sanctions available under SOX and recommend the key action(s) that the PCAOB should take in order to hold management or the audit firm accountable for the accounting irregularities. Provide a rationale for your response.
  5. Use theStrayer Libraryto locate at least two (2) quality academic resources in this assignment. Note: Wikipedia and other similar websites do not qualify as academic resources.
Answered Same Day Jul 24, 2021

Solution

Yash answered on Jul 28 2021
134 Votes
1.) The Public Accounting Profession is today stood up to with two lawful issues of significant importance. The first of these lawful issues is the aftereffect of the legal executive's ongoing encroachment upon a lot of rights which had traditionally been allowed to the individuals from every single gifted calling. This ongoing encroachment has
ought about a legal translation of the open Accountant's duties which varies significantly from the understanding which has been progressed by the Public Accounting Profession.
The primary issue to stand up to the bookkeeping calling came about when the legal executive started to encroach upon the Public Accounting Profession's entitlement to set up the guidelines of direct by which its individuals would be required to withstand. This once widespread right of every single talented calling was generously decreased when the courts started to em
ace norms of expert lead with respect to the exposure of along these lines gained information, the identification of corporate extortion, the a
angement of unaudited budget summaries and the revelation of cu
ent worth monetary data. As the legal executive's encroachment upon the privileges of open bookkeeping developed, the calling started to divert its significant endeavors from serving the financial part and toward the avoidanceof common obligation. A second issue for the calling rose as an assorted a
angement of conventions of risk situation. As the cutting edge courts reconsidered and extended the precepts which had been created by the early English and American Courts, the Accountant got himself stood up to with in any event six particular ideas of outsider risk situation. In a given circumstance, a specific court could apply ideas of risk position which ran from a most preservationist principle which depended on an idea of unadulterated extortion, to a most liberal convention which depended on predictability and standard carelessness. Along these lines, not exclusively is the accountant today stood up to with an inconsistency among lawful and proficient guidelines of direct, yet he is likewise gone up against with a circumstance where the assurance of the extent of his risk is a practically incomprehensible undertaking.
To achieve this undertaking a five-advance methodology was taken. In the first place, it was suggested that the Public Accounting Profession be permitted to actualize its own principles of expert lead. Second, it was suggested that the courts keep on utilizing the sensible man as a reason for looking at the exercises of an individual Accountant to the principles of the calling in general. Third, it was suggested that the courts block Accountants from utilizing disclaimers and capabilities as a methods for risk evasion. Fourth, it was recommended that the courts keep on holding Accountants obligated to outsiders when the Accountants are blameworthy of unadulterated misrepresentation. At long last, it was recommended that the courts hold Accountants subject to all sensibly predictable outsiders when the Accountants are blameworthy of any type of carelessness. Such a way to deal with Accountants' outsider obligation would give a progressively liberal idea of outsider recuperation while adding to a sound a
angement of law inside which answer for the issues going up against the bookkeeping calling might be manufactured.
2.) For the purpose of this assignment, I had study the fraud committed by Theranos Inc.
The SEC's objection against Balwani said materials in the folios asserted Theranos would produce over $100 million in incomes in 2014 and make...
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