The Nature of Fraud Case Analysis
See the “Madoff Securities” case for this question.
Background
CNBC’S 2008 COVERAGE OF BERNIE MADOFF’S PONZI SCHEME
BERNIE MADOFF’S ‘SCAM OF THE CENTURY’: TEN YEAR LATER
Provide a narrated power point with answers to these questions:
- Research recent developments involving this case. Summarize these developments in a bullet format. There are two news summaries in order to get you started
- Suppose that a large investment firm had approximately 10 percent of its total assets invested in funds managed by Madoff Securities. What audit procedures should the investment firm’s independent auditors have applied to those assets?
- Professional auditing standards discuss the three key “conditions” that are typically present when a financial fraud occurs and identify a lengthy list of “fraud risk factors.” Briefly explain the difference between a fraud “condition” and a “fraud risk factor” and provide examples of each. What fraud conditions and fraud risk factors were apparently present in the Madoff case?
- In addition to the reforms mentioned in this case, recommend other financial reporting and auditing-related reforms that would likely be effective in preventing or detecting frauds similar to that perpetrated by Madoff.
Acct 573 Week 1 Case Analysis
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Criteria |
Ratings |
Pts |
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This criterion is linked to a Learning OutcomeRecent Developments Research recent developments involving this case. Summarize these developments in a bullet format. There are two news summaries in order to get you started |
12.5 pts |
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This criterion is linked to a Learning OutcomeAudit Procedures Suppose that a large investment firm had approximately 10 percent of its total assets invested in funds managed by Madoff Securities. What audit procedures should the investment firm’s independent auditors have applied to those assets? |
12.5 pts Full Marks 0.0 pts No Audit Procedures Provided |
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This criterion is linked to a Learning OutcomeFraud Conditions and Fraud Risk Factors Professional auditing standards discuss the three key “conditions” that are typically present when a financial fraud occurs and identify a lengthy list of “fraud risk factors.” Briefly explain the difference between a fraud “condition” and a “fraud risk factor” and provide examples of each. What fraud conditions and fraud risk factors were apparently present in the Madoff case? |
12.5 pts Full Marks 6.5 pts Explained the Difference 6.5 pts Fraud Conditions and Fraud Risks |
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This criterion is linked to a Learning OutcomeOther Fraud Prevention and Detection In addition to the reforms mentioned in this case, recommend other financial reporting and auditing-related reforms that would likely be effective in preventing or detecting frauds similar to that perpetrated by Madoff. |
12.5 pts Recommended Other Financial and Auditing-Related Reforms 6.5 pts Recommended Other Financial and Auditing-Related Reforms to Detect Fraud 6.5 pts Recommended Other Financial and Auditing-Related Reforms to Prevent Fraud |
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Total Points: 50.0 |