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Hire Writer However, with hindsight and based on the actions taken in the KEMP investigation, the loss of one of the large CPA firms and the loss of jobs appears to be a penalty to too many innocent people. It is probably more appropriate to seek out individuals who engaged or directed illegal activities and take the appropriate actions against those individuals.
Students should understand that even if an action is legal it may not be ethical. Clearly, there were some actions taken that are questionable. The reminisces of ethics require auditors to act with integrity and to be mindful of the public trust.
David Duncan directed the actual shredding of documents and probably knew an investigation was imminent. Even if he received direction from Nancy Temple concerning the document retention policy, he had the opportunity to determine the applicability of the policy to the situation and the mummifications outlining the policy in this instance.
Remember, many people have gone to jail or suffered even greater consequences utilizing the defense that they were only following orders — or, in this case, policy. They do this for two basic reasons.
Therefore, the plaintiffs may still prevail and collect damages against those defendants. Second, if one or more defendant becomes insolvent which may happen during a long trial where legal fees can escalate and cause create cash flow problemsthe plaintiffs may collect from other defendants found liable in the lawsuit.
Class action lawsuits can be the most damaging to plaintiffs. Several plaintiffs sometimes thousands of plaintiffs can file one lawsuit seeking damages that can total into millions Of dollars if proven. In addition, class action lawsuits may often e heard in several jurisdictions. If a class action lawsuit is not allowed, many of the smaller claims may be dropped the costs of the lawsuit outweighs the potential reward and even larger suits must bare the legal fees individually.
Each suit, possibly heard in different jurisdictions, will be required to prove its individual case for its plaintiff. While all firms engaged in providing services try to satisfy their client needs, firms must evaluate the overall situation and must consider their reputation for quality and doing the right thing.
The desire to do whatever it takes to retain the client cost both firms greatly. Students can debate this at great length. Clearly people tend to look at past events in shaping their decisions. We may have never been in a serious car accident, but knowing individuals that have had such experiences often hanged our driving habits.
This is especially true for top executives at firms and corporations that have often risen to their high position by taking significant risks in their career. They have reached the top level to the organization because these risks have generally proven rewarding.
These past events often lead individuals to exhibit significant hubris in their decisions and actions. Again, this is a question that can provide significant debate. There is no CPA or other authoritative pronouncements that has stated any restrictions on the use of an audit report on the financial statements as long as the accompanying information is not misleading.
Clearly, the client paid for the product and, as such, has the right to its use. Indeed, using it to allay financial fears of investors and customers is clearly a societal demand for the existence Of an audit function. On the other hand, auditors do not write their audit reports such that it is suitable a general marketing tool.
Audit reports are written for individuals hat understand the nature of auditing and financial reporting. A CPA firm may be able to restrict the use of its audit report through its engagement letter. The client should be encouraged to discuss uses Of its financial statements and accompanying information including the auditors report.
Normally a sales cutoff is performed only to determine that sales were recorded in the appropriate period. Therefore, it would not be within the normal audit procedures for Dolomite auditors to evaluate subsequent sales for other purposes.
However, it can be argued that professional skepticism should require the auditor to evaluate sales even subsequent sales in evaluation of the limits placed on these sales, This should illustrate that doing what was done in prior audits or following audit programs blindly may not be sufficient to uncover existing problems.Mini Case: 10 - 1 Chapter 10 The Basics of Capital Budgeting: Evaluating Cash Flows ANSWERS TO SELECTED END-OF-CHAPTER QUESTIONS a.
Capital budgeting is the whole process of analyzing projects and deciding whether. Test Bank Solutions Textbook Solutions SOLUTION: Michael Phelps: Strategy Formulation & Implementation.
Case Study Solutions. MINICASE DISCUSSION QUESTIONS. Olympians generally do not turn into global phenomena. One reason is that they are highlighted only every four years; e.g., not too many people follow competitive swimming or downhill.
Conch Republic Electronics is a midsized electronics manufacturer located in Key West, Florida. The company president is Shelly Couts, who inherited the company. When it was founded over 70 years ago, the company originally.
Mini Case: 12 - 1 Chapter 12 Financial Planning and Forecasting Financial Statements ANSWERS TO END-OF-CHAPTER QUESTIONS a. The operating plan provides detailed implementation guidance designed to accomplish Mini Case: 12 - 3 SOLUTIONS TO END-OF-CHAPTER PROBLEMS. it perfectly correct.
Please refer to one suggested solution. REEBY SPORTS George Reeby proposes to sell 90, shares, or about 22%, of his company. How much are those shares worth? We have to value the company using George's forecasts.
MINICASE SOLUTIONS Author. Textbook Solutions Expert Q&A Question: Need the solution to Mini Case at the end of Chapter 12, pg , from the book Foundations of Fin Need the solution to Mini Case at the end of Chapter 12, pg , from the book Foundations of Finance (7th ED).