Go to https://www.sec.gov/divisions/enforce/friactions.shtml and select a recent AAER to
analyze. Please DO NOT select an AAER related to insider trading or bribery as you will have
difficulty responding to Question 3 in such instances. Look
for AAERs related to accounting firms and CPAs. Additionally, it is important that you select an AAER that you understand and
can succinctly summarize the major details within 2 pages.
1. Briefly summarize the ethical issue
underlying the AAER.
2. How do the facts described within this AAER
align with the risk factors discussed in Chapter 4 of your textbook pertaining
to inherent risk, control risk, or detection risk?
3.
Discuss
how auditors could have prevented the AAER from happening. (Note: If it is not
directly clear how the external auditor may have prevented the AAER from happening,
discuss the role the internal auditor may have been able to play in preventing
the issue.)
4.
How
do you think this AAER may impact investor confidence in the capital markets?
How do you foresee this action impacting other stakeholders? Please try to be
specific.