Suchergebnisse

• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 7: Waste Management (1997)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …client too hard. Accounting Fraud in U.S. Companies 56 For example, in its 1993 audit, Andersen quantified misstatements of USD 128 mil- lion… …material and that Andersen could issue an unqualified audit opinion on the com- pany’s 1993 financial statements. In 1994, WMI continued to engage in the ac-… …counting practices that had given rise to the quantified misstatements. As in 1993, Andersen’s managing partner and the head of the audit division were… …list of clients that posed a significant risk to the audit firm. After the 1995 audit, Andersen prepared a memorandum articulating its disagree- ment… …presentation and effect on current year earnings.” But despite its concerns about WMI’s use of netting, Andersen did not withdraw its 1995 audit report or… …, Allgyer coordinated the marketing efforts of Andersen’s entire Chicago office, including cross-selling non-attest services to audit clients. –… …Shortly after Allgyer’s appointment as engagement partner, WMI capped Andersen’s audit fees at the prior year’s level, but allowed the firm to earn… …additional fees for “special work”. – Between 1991 and 1997, Andersen billed WMI approximately USD 7.5 mil- lion in audit fees. Over this seven-year period… …, the billings to WMI for audit and non-audit ser- vices.) However, the review was virtually ignored by WMI; a board member who had approved the review… …ordered the destruction of damaging evidence, misled the company’s audit committee and internal audit, and withheld certain in- formation from the outside…

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• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 8: Sunbeam (1998)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …buy any more products for months. However, Arthur Andersen, Sunbeam’s outside auditing firm, authorized unquali- fied audit opinions on the 1996…
• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 10: MicroStrategy (2000)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …governance and compliance. These changes included creating an internal audit department, appointing an inde- pendent director with experience in public… …software products for resale to audit and consulting clients. Possibly, they covered up the relationship by using a third party as a go-between. However… …, in August 2003, the SEC ended its investigation of PwC with no enforcement action against the audit firm. Accounting Fraud in U.S… …. Companies 74 Nevertheless, the SEC did take action against the former PwC lead audit partner at MicroStrategy, Warren Martin. The SEC alleged that… …pay USD 51 million to settle a suit brought by shareholders who alleged that the audit firm defrauded them when it approved MicroStrategy’s financial…

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  Case 12: Enron (2001)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …might “implode under a series of accounting scandals”. Lay notified the company’s attorneys, Vinson & Elkins, as well as Enron’s audit firm, Arthur… …Andersen, so the matter could be investigated further. October - An Arthur Andersen lawyer reminded a senior audit partner that company policy was not to… …assignment at Enron’s offices. However, it issued unqualified audit opinions on Enron’s financial statements up until the time the company collapsed. As… …called into question. In 2000, Andersen had earned approximately USD 25 million in audit fees from the Enron assignment, and another USD 27 million in… …consulting fees. But while critics raised the longstanding and controversial “scope of services” issue, the size of the audit fees alone was likely to have an… …important impact on the relationship between Enron and Andersen: Enron’s audit fees accounted for roughly 27% of the audit fees of public clients for… …intended to interfere with the federal investigation when the audit firm shredded the Enron work papers. Nevertheless, that decision represented little more… …twelve independent members (most of which had relevant business experience) and only two inside directors. Besides, Enron’s audit committee had more… …auditors on technical accounting questions; nor was it in a position to evaluate the validity of top management representations. The audit committee did… …aftermath The Enron debacle prompted a public outcry to improve financial reporting prac- tices and to strengthen the independent audit function. However…

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  Case 13: WorldCom (2002)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …employee, Cynthia Cooper. She was part of an internal audit team checking the books on behalf of the newly appointed CEO, John Sidgmore, who had taken over… …that it was not her problem. When she continued to raise her concerns, she was told by WorldCom’s CFO, Scott Sullivan (to whom internal audit reported)… …, Sullivan asked Cooper to delay her audit, but she refused. The next day she told the head of the audit commit- tee about her findings. The committee, once… …advised of the issue, took it seriously and directed prompt attention to it. On June 20, Cooper attended an audit committee meeting at which Sullivan was… …the largest client of Andersen’s Jackson, Mis- sissippi, office. From 1999 through 2001, WorldCom paid Andersen USD 7.8 mil- lion in fees to audit the… …raise the appropriate questions. However, there were apparent flaws in Andersen’s audit approach, limiting the likelihood it would detect the accounting… …irregularities (see Beresford/Katzenbach/Rogers 2003, pp. 230–241): – Following the risk-based audit model, Andersen limited its testing of account balances… …part, knowing it was receiving less than full cooperation, failed to bring this to the attention of WorldCom’s audit committee. – Andersen’s audit… …normally speak to understand a client’s business. Above all, it limited its contact with internal audit. Andersen did not work with internal audit to… …improve internal controls or resolve other problems that internal audit encountered and documented. There is no evidence that Andersen knew…

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  Case 15: Xerox (2002)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …recogni- tion”. But when the engagement partner challenged Xerox’s non-GAAP accounting practices, the company’s senior management told the audit firm that… …also filed fraud charges against the audit firm KPMG for its involvement in the accounting scandal. The Commission alleged that KPMG was part of… …concerns about the company’s accounting to its senior management. KPMG was “intimately familiar” with the accounting used by Xerox, the SEC said. The audit…

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  Case 21: HealthSouth (2003)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …quarter of 2002, the company’s assets were overstated by at least USD 800 million, or approximately 10%. How- ever, a forensic audit conducted by… …possible that the board of directors and the audit firm knew nothing about this?” asked Rep. Cliff Stearns during congressional hearings on the case. “Did… …audit firm had received an e-mail from a HealthSouth employee advising them to examine three specific ac- counts for fraudulent entries related to asset… …improperly capitalized. Ernst & Young did not investigate beyond the scope of normal audit procedures any other substantive questionable activities outside…

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  Case 23: Computer Associates International (2004)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …. For example, in 2000, at a time when CA had almost 20,000 employees and more than USD 6 billion in reported sales, its internal audit division…
• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 25: Bernard Madoff (2008)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …the audit reports of Friehling & Horowitz. But given the fact that Madoff used such a rinky- dink accountancy firm, they probably should have looked… …Audit Quality (the U.S. audit lobbyist) commented: “It is not the auditor’s responsibility to audit the underlying investments of the firms the capital…
• eBook-Kapitel aus dem Buch Accounting Fraud

  Case 27: Flowtex (Germany, 2000)

  Prof. Dr. Klaus Henselmann, Dr. Stefan Hofmann

  …to undertake a special audit by some of the lending banks that were unhappy with the figures that had been produced by Flow- tex. KPMG issued a clean… …audit report, but did not conduct a full reconciliation of the actual leased machines against the company records. Instead, they merely pre- sented… …ruled that the failure of the state of Baden-Wuerttemberg’s tax authorities to un- cover the fraud during the audit of Flowtex in 1996 and 1997 did not…

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