ACC 546 Education Organization -- snaptutorial.com

ACC 546 All Assignments
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Please check All Included Assignments Below
ACC 546 Individual Assignment Evaluating the Case Against Lehman
Brothers
ACC 546 Case 3.3 The Anonymous Caller
ACC 546 Assignment Burlington Bees
ACC 546 Week 1 Assignment Avoiding Bias Paper
ACC 546 Individual Assignment 1.1 Ocean Manufacturing, Inc
ACC 546 Laramie Wire Manufacturing Assignment
ACC 546 Individual Assignment Case 5.6 SarboxScooter, Inc.
ACC 546 Individual Assignment Case 5.3 Red Bluff Inn & Cafe
ACC 546 Case 4.1 Enron Corporation & Andersen, LLP
ACC 546 Case 7.1 Anne Aylor, Inc
ACC 546 Case 5.1 Simply Steam, Co.
ACC 546 Case 2.2 Apple Inc.

ACC 546 Case 10.4 and 10.5 Southeast Shoe Distributor, Inc (Score
100%)
ACC 546 Case 9.7 RedPack Beer Company
ACC 546 CASE 9.1 Wally’s Billboard & Sign Supply
ACC 546 Case 9.3 Longeta Corporation
ACC 546 Case 9.4 Bud's Big Blue Manufacturing
ACC 546 Case 11.1 The Runners Shop
ACC 546 Case 12.2 Auto Parts. Inc
ACC 546 Case 12.4 Surfer Dude Duds, Inc
ACC 546 Case 12.1 EyeMax Corporation
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ACC 546 Assignment Burlington Bees

[1] Research auditing professional standards and list the
requirements related to developing an expectation and conducting
analytical procedures when those procedures are intended to provide
substantive evidence. What are the advantages of developing an
expectation at a detailed level (i.e., using disaggregated data) rather
than at an overall or aggregated level?
[2] Using the information provided, please develop a precise
expectation (i.e., using the detailed or disaggregated data provided)
for ticket revenues for the 2014 fiscal year.
[3] (A) what are the advantages of using analytical procedures as
substantive tests? (b) If the engagement team decides to use analytical
procedures for the Bees’ audit, how will the audit plan differ from
prior years? (c) Discuss whether you believe analytical procedures
should be used as substantive tests for the Bees 2014 audit?
[4] (A) how close does the Bees’ reported ticket revenue for 2014
have to be to your expectation for you to consider reported ticket
revenue reasonable or fairly stated? (b) If reported ticket revenues
were outside your “reasonableness range,” what could explain the
difference?
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ACC 546 Case 2.2 Apple Inc.

CASE 2.2 Apple Inc.
Evaluation of Client Business Risk
After completing and discussing this case you should be able to
[1] Describe the implications of an audit client’s business risk on the
audit engagement
[2] Describe the types of information relevant to evaluate an audit
client’s business risk
[3] Identify and evaluate the factors important in assessing an audit
client’s business risk and risk of material financial misstatement
INTRODUCTION1
[a] Apple’s:
■ Sales
■ Net income
■ Cash flow from operating activities
■ Total assets
■ Number of employees
[b] What are Apple’s products?
[c] Who are Apple’s competitors?

[d] Who are Apple’s customers?
[e] Who are Apple’s suppliers?
[f] How does Apple market and distribute its products?
[g] What is Apple’s basic business strategy (cost leadership or
differentiation)?
[h] What are critical business processes for Apple given its basic
business strategy (for example, supply chain management)?
[i] What accounting information is associated with the critical
business processes and how does Apple measure up on that
information?
[j] What accounting methods does Apple use to report the accounting
information associated with critical business processes and what is
the risk of material misstatement?
This memo is to be used as a foundation document for the preliminary
business risk assessment. In evaluating Apple’s performance and
assessing the risk of misstatement, please be sure to describe your
reasoning. Your memo should be double-spaced and addressed to the
partner for the engagement (your instructor). Your firm demands
polished, concise, professional analyses and writing. Be thorough, but
get to the issues without unnecessary verbiage. In describing your
analyses and conclusions, please consider relatively short “punchy”
or to-the-point sentences. When appropriate, consider using bullet
point listings.
[2] Professional auditing standards provide guidance on the
auditor’s consideration of an entity’s business risks. What is the
auditor’s objective for understanding an entity’s business risks? Why
does an auditor not have responsibility to identify or assess all
business risks? Provide some examples of business risks associated

with an entity that an auditor should consider when performing an
audit.
Smith and Jones, PA. Memorandum: Business Risk Evaluation
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ACC 546 Case 3.3 The Anonymous Callr
Case 3.3 The Anonymous Caller, p. 63-65
[1] Do you think situations like this (i.e., aggressive accounting or
even financial statement fraud) are common in practice?
[2] Which financial statement assertion related to sales transactions
did management violate when it issued the falsified financial
statements?
[3] The Financial Accounting Standards Board (FASB) and the
International Accounting StandardsBoard (IASB) recently completed
a joint project to develop a common revenue standard for U.S. GAAP
and IFRS to improve revenue recognition practices and to remove
inconsistencies and weaknesses in revenue requirements. The updated
guidance is contained in the Accounting StandardsCodification as
Topic 606, Revenue from Contracts with Customers. Review that

guidance to summarize the core principle for recognizing revenue and
briefly describe the five steps needed to achieve the core principle.
Also, describe how the core principle was not achieved in this
situation.
[4] What types of audit procedures could an external auditor perform
that might help the auditor detect this fraudulent activity?
[5] People who study instances of financial statement fraud often note
that three conditions are generally present for fraud to occur. First,
the person perpetrating the fraud has an incentive or pressure to
engage in fraud. Second, there is an opportunity for that person to
carry out the fraud. Third, the person’s attitude or ethical values
allows the perpetrator to rationalize the unethical behavior. Describe
examples of incentive, opportunity, and attitude conditions that were
present in this situation.
[6] In 2014, the AICPA’s Professional Ethics Executive Committee
adopted a revised Code of Professional Conduct that is effective
December 15, 2014. Briefly describe how the new Code is structured
and indicate where would you find guidance about the importance of
integrity.
[7] (a) What would you recommend to the caller if you were Dr.
Mitchell? (b) What are the risks of continuing to work with the
company? (c) What are the risks of resigning immediately?
[8] What responsibility, if any, does the caller have to report this
situation directly to the bank involved? Before you respond, think
about the risks present if the caller does inform the bank and it later
turns out that the caller’s assessment of the situation was inaccurate,
i.e., there was no fraud.
[9] (a) What other parties, if any, should be notified in addition to the
bank? (b) What concerns do you have about notifying the external
auditors?

[10] (a) What pressures or factors will executives use to encourage
accounting managers and staff to go along with this type of situation?
(b) What arguments can you use to resist those pressures? (c) How
does one determine whether a company is aggressively reporting, but
still in the guidelines of GAAP, versus fraudulently reporting
financial information?
PROFESSIONAL JUDGMENT QUESTIONS
It is recommended that you read the Professional Judgment
Introduction found at the beginning of the book prior to responding to
the following questions.
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ACC 546 Case 5.1 Simply Steam, Co.
.
Commitment to Integrity and Ethical Values
Board of Directors Demonstrates Independence and Appropriate
Oversight
Management’s Philosophy and Operating Style
Management Establishes Structure and Reporting Lines to Achieve
Objectives
Financial Reporting Competencies

The Organization Holds Individuals Accountable to Their Internal
Control Responsibility
Evaluation of Simply Steam, Co. as to demonstrating a commitment to
attract, develop, and retain competent individuals
Overall evaluation of the Control Environment
*********************************************************************
ACC 546 Case 7.1 Anne Aylor, Inc
ACC 546 Case 7.1 Anne Aylor, Inc.
[a] Why are different materiality bases considered when determining
planning materiality?
[b] Why are different materiality thresholds relevant for different
audit engagements?
[c] Why is the materiality base that results in the smallest threshold
generally used for planning purposes?
D. Why is the risk of management fraud considered when determining
performance materiality?

E. Why might an auditor not use the same performance materiality
amount or percentage of account balance for all financial statement
accounts?
F) Why does the combined total of individual account performance
materiality commonly exceed the estimate of planning materiality?
G) Why might certain trial balance amounts be projected when
considering planning materiality?
[2] Based on your review of the Exhibits (1 and 2) and audit memos
(G-3 and G-4), complete audit schedules G-5, G-6 and G-7.
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ACC 546 CASE 9.1 Wally’s Billboard & Sign
Supply
CASE 9.1 Wally’s Billboard & Sign Supply
After completing the audit program, answer the following questions:
[1] Why is the audit of cash an important part of the audit?
[2] Bill performed tests of controls for all transaction cycles with
good results. Why is it important to also perform substantive audit
procedures for the ending cash balance even when tests of controls

over transactions that affect the cash account indicate that those
controls are operating effectively?
[3] According to AICPA auditing standards, what are the necessary
ingredients for audit evidence to be considered “appropriate”?
[4] For each procedure listed in the audit program (schedule C 2),
indicate the primary assertion(s) targeted by the procedure.
[5] For each error, concern, or adjustment you listed on the Audit
Summary (schedule C 3), briefly describe at least one additionaltest
you could perform to gain evidence as to whether or not the cash
account is materially misstated.
[6] The AICPA and the American Banker’s Association developed a
standardized bank confirmation form—see working paper C 6. What
is the purpose for confirming information in item number two on the
bank confirmation form? Identify the accounts and related audit
assertion(s) to which the information in item number two is relevant.
[7] What audit procedures might you perform if you were to decide
that the risk of fraud involving the cash account was relatively high
for this client?
[8] Perform an online search for “electronic bank confirmations.”
Summarize in one page or less what you learn about recent
developments in the use of web-based bank confirmations. Include a
brief discussion of the advantages of electronic confirmations in your
write-up.
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ACC 546 Case 9.3 Longeta Corporation

Case 9.3 Longeta Corporation
overs auditing revenue contracts.
You want to be thoroughly prepared for the meeting with the audit
manager. Perform the following procedures to be certain you have all
necessary information about the transaction’s treatment.
[1] The Financial Accounting Standards Board (FASB) and the
International Accounting StandardsBoard (IASB) recently completed
a joint project to develop a common revenue standard for U.S. GAAP
and IFRS to improve revenue recognition practices and to remove
inconsistencies and weaknesses in revenue requirements. The updated
guidance is contained in the Accounting StandardsCodification as
Topic 606, “Revenue from Contracts with Customers.” Review that
guidance to summarize the core principle for recognizing revenue and
briefly describe the five steps needed to achieve the core principle.
Also, describe how the core principle was not achieved in this
situation.
[2] In your own words, explain the company’s reasoning for
recording $5.8 million as current revenue while recording the
remaining $1.2 million as deferred revenue. Also, document where on
the financial statements the deferred revenue account would be
presented.
[3] Assess the content of the separate letter issued by Longeta’s vice
president of sales to Magicon. Document your conclusion abouthow
the content of the letter affects or does not affect revenue recognition
for Longeta for the year ended September 30, 2015.
[4] Given that the letter from the vice president of sales was not
attached to or documented in the order letter submitted by Magicon to
Longeta, document your conclusion as to the impact, if any, the vice
president’s letter has on the accounting treatment for the transaction
since it was not part of the order letter.
[5] Research PCAOB Auditing Standards on the PCAOB’s website
(www.pcaob.org) to summarize the guidance for auditors in regards
to their assessment of the risk of material misstatement related to

revenue recognition. What do those standards require of auditors in
regards to their assessment of risk related to revenue recognition?
[6] Auditing standards describe three conditions that are usually
found to be present. What are those three conditions and what red
flags, if any, might be present at Longeta?
[7] The separate letter from the vice president of sales was emailed
and faxed to Magicon representatives. What would be the impact if
Longeta’s vice president had only provided that information orally to
Magicon representatives and not forwarded the information in written
form?
[8] As of September 30, 2015, Magicon had only submitted the order
letter. Document your conclusion about the impact on the accounting
for the transaction if Longeta and Magicon (a) sign the reseller
agreement within 30 days or (b) do not sign the reseller agreement
within 30 days.
[9] Document your final conclusion about the accounting treatment of
this transaction between Longeta and Magicon. Be sure to provide a
basis for your conclusion.
PROFESSIONAL JUDGMENT QUESTION
Introduction found at the beginning of the book prior to responding to
the following question.
[10] One of the environmental factors affecting judgment is the “rush
to solve” judgment trap. Briefly describe the trap and how it applies
to the situation affecting the recording of the sales transaction.
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ACC 546 Case 9.4 Bud's Big Blue
Manufacturing
Case 9.4 Bud's Big Blue Manufacturing covers accounts receivable
confirmations
REQUIRED
[1] List the four factors auditors should consider when evaluating the
results of confirmation procedures. Also, what are three of the
characteristics of a reliable confirmation? (For this and other
questions, you may wish to refer relevant auditing standards).
[2] What does it mean to “maintain control” over the confirmation
requests and responses? What could go wrong if the auditor doesn’t
maintain control over the confirmation process?
[3] Complete the audit log provided on the next page for each of the
seven remaining confirmations. Consider whether each confirmation
provides sufficient, appropriate audit evidence, whether sufficient
alternative procedures have been performed for non-responses, and
whether additionalprocedures should be performed before
concluding that the confirmation provides evidence supporting the
client’s account balance. Be as precise and concise as possible.
[4] What is the difference between a positive and a negative
confirmation? What are the advantages and disadvantages of each
type?
[5] Search the internet to identify a real-life situation where an
auditor apparently did not maintain sufficient control over the
confirmation process. Briefly describe the situation you found.
PROFESSIONAL JUDGMENT QUESTION

Introduction found at the beginning of this book prior to responding
to the following question.
[6] After completing the confirmations review, your senior asks you to
assess the reasonableness of the allowance for bad debts. Think about
the anchoring tendency discussed in the Professional Judgment
Introduction. How could the anchoring tendency bias your
reasonableness assessment? What are some ways that you could
mitigate the possible effects of the anchoring tendency in assessing
the reasonableness of the allowance?
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ACC 546 Case 9.7 RedPack Beer Company
Case 9.7 RedPack Beer Company covers estimating allowance for
bad debt
[2] Following your analysis of the information in Schedules A-D,
assume that you met with RedPack’s Credit Manager, Katie Henson,
to ask her a number of questions related to specific customer accounts
in the Accounts Receivable Aged Trial Balance. A transcript of your

interview notes is provided as Schedule E. Use that information to
address the following:
[a] Based on your reading of the transcript, do you agree with the
specific reserves established by the credit manager for Distinct Beer
Distributor, Eagle Beverage Group, and Golden Holdings? If yes
why? If no what do you believe the specific reserves should be and
why?
[b] Based on your reading of the transcript discussion, would you
have any concerns with other aspects related to the reporting of
revenues and accounts receivable? Explain your answer.
[c] Based on the information you have, develop an estimate of the
account balance for the allowance for bad debts and compare your
expectation to the client’s estimate summarized in Schedule B for the
allowance for bad debts. Does the amount you estimated agree with
the client’s estimate in Schedule B? If it does not agree, by how much
does it differ and is that difference material?
[d] Determine the adjusting journal entry(ies) needed, if any, to
adjust management’s estimate of the reserve to your audited estimate
and post your entries in the Adjustments column in Schedule A.
[e] Based on your reading of the professional standards in
requirement 1 above, what additionalprocedures would you need to
perform to conclude on the adequacy of the allowance for bad debt?
*********************************************************************

ACC 546 Case 10.4 and 10.5 Southeast Shoe
Distributor, Inc(Score 100%)
Week 5 Team Assignment Case 10.4 and 10.5 Southeast Shoe
Distributor, Inc.
10.4 [2] Complete steps 1a-i from the audit program E 1-1
[3] Complete step 4a from the audit program E 1-1
10.5
[1] Complete audit procedure 3a listed on audit program E 2.
[2] Document your adjusting entries for any observed misstatements
that you propose on schedule E 11. Then update the accounts payable
lead schedule on audit schedule E 10
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ACC 546 Case 11.1 The Runners Shop

Week 6 Team Assignment, 1 Instructions: Review case 11.1 The
Runners Shop p.379-391.
CASE 11.1 The Runners Shop Briefly answer, required questions
related to this case: 1-3 with approximately 30 to 45 words.
REQUIRED
[1] Describe the purposes of audit documentation and explain why
each purpose is important.
[2] Review Green and Brown, LLP’s audit documentation guidelines
and explain why an audit firm would want to include each of the listed
items in its audit documentation.
[3] Review the audit documentation prepared by Green and Brown,
LLP, related to TRS’s Notes Payable and list deficiencies on the
enclosed schedules.
Will not accept plagiarized work from other sites, I could have done
the same thing.
*********************************************************************

ACC 546 Case 12.1 EyeMax Corporation
Case 12.1 EyeMax Corporation – evaluating audit differences
Assume that you are the auditor responsible for the EyeMax audit. It
is now March 30, and all planned
fieldwork has been completed. Recall that total financial statement
materiality has been set at $625,000.
Taking into account the information provided, please answer the
following question.
[1] Which of the following three alternatives best describes the
conditions under which you
would issue a clean opinion for EyeMax? (select one) ____
a. I would not be willing to issue a clean opinion even if EyeMax is
willing to make adjustments
for items on the Summary of Unadjusted Misstatements. ____
b. I would be willing to issue a clean opinion without any
adjustments. ____
c. I would be willing to issue a clean opinion only if EyeMax is willing
to make some adjustments
to their financial statements for items on the Summary of Unadjusted
Misstatements. Briefly explainyour choice:
[2] If you selected options “a” or “b” in question 1, assume now that
the client has decided that
they will make an adjustment of up to $250,000 to their financial
statements. Please decompose the

total adjustment you would recommend into the individual account
classifications included on the
Summary of Unadjusted Misstatements in the space provided below
(e.g., what adjustment would you
require for warranty expense, repair and maintenance expense, etc?
The dollar values of your individual
account adjustments should sum to no more than $250,000).
If you selected item “c” in question 1, what is the minimum total
adjustment that you would
require before issuing a clean opinion? $________________Please
decompose this total adjustment into
the individual account classifications included on the Summary of
Unadjusted Misstatements in the
space provided below (e.g., what adjustment, if any, would you
require for warranty expense, repair and
maintenance expense, etc? The dollar values of your individual
account adjustments should sum to your
required minimum adjustment). Please briefly explain your decisions:
*********************************************************************
ACC 546 Case 12.2 Auto Parts. Inc

Case 12.2 Auto Parts. Inc. – materiality and evaluating accounting
policies and footnote disclosures
[1] Describe whether you agree that capitalization of the tooling
supplies is the preferable method of accounting for Auto Parts, Inc.
[2] In general, how do auditors develop an estimate of financial
statement materiality? For Auto Parts, Inc., what is your estimate of
financial statement materiality? Are there qualitative factors that
might impact your decision about the materiality of the accounting
treatment and the related disclosure?
[3] Assuming the policy change is considered material, how should it
be reported and disclosed in the 2014 financial statements and what
would be the effect, if any, of the accounting change on the auditor’s
report?
[4] Do you concur with management’s assessment that the accounting
change is immaterial and, therefore, requires no disclosure? Why or
why not?
*********************************************************************

[1] What are Scott’s options?
[2] How might a going-concern explanatory paragraph become a
“self-fulfilling prophecy” for Surfer Dude?
[3] Discuss the importance of full and accurate auditor reporting to
the public, and describe possible consequences for both parties if the
going-concern explanatory paragraph and footnote are excluded.
How might Scott convince George that a going-concern report is in
the best interests of all parties involved?
[4] What potential implications arise for the accounting firm if they
issue an unqualified report without the going-concern explanatory
paragraph?
[5] What factors might motivate Scott to be objective in his decision,
despite his personal concern for his friend?
[6] Is it appropriate for an audit partner to have a friendly personal
relationship with a client? At what point could a personal
relationship become an independence issue?
[7] In your opinion, what should Scott do? Briefly justify your
position and explain how you would approach George on Monday.
PROFESSIONAL JUDGMENT QUESTIONS
Introduction found at the beginning of this book prior to responding
to the following questions.
[8] How is professional skepticism related to professional judgment?
Describe a few factors that might be clouding Scott’s professional
skepticism.
[9] Consider the judgment trap of solving the wrong problem. What
are some problems that Scott is trying to solve? What is the problem

he should be trying to solve? Describe how he might reconcile the two
objectives so that the problem becomes simpler to resolve?
*********************************************************************
ACC 546 Individual Assignment 1.1 Ocean
Manufacturing, Inc
2. What nonfinancialmatters should be considered before accepting
Ocean as a client? How important are these issues to the client
acceptance decision? Why?
5. (A). Prepare a memo to the partner making a recommendation as
to whether Barnes and Fischer should or should not accept Ocean
Manufacturing, Inc. as an audit client. Carefully justify your position
in light of the information in the case. Include consideration of
reasons both for and against acceptance and be sure to address both
financial and nonfinancialissues to justify your recommendation.
6. (A). How might the confirmation tendency affect the client
acceptance decision?

6. (B). How might the overconfidence tendency come into play in the
client acceptance decision?
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ACC 546 Individual Assignment Case 5.3 Red
Bluff Inn & Cafe
[1] What are your two biggest concerns relating to possible fraud for
the café part of the business? For each concern, generate two or three
controls that could effectively reduce risk related to your concerns.
Use common sense and be creative!
[2] What are your two biggest concerns relating to possible fraud for
the motel part of the business? For each concern, generate two or
three controls that could effectively reduce risk related to your
concerns. Use common sense and be creative!
[3] Describe the potential impact of your proposed controls on the
morale of the couple in charge of the day-to-day operations. How
might Francisco deal with these concerns?

[4] Briefly describe the impact each proposed control would have on
the efficiency of running the business. Are the controls you generated
both effective and efficient?
*********************************************************************
ACC 546 Individual Assignment Case 5.6
SarboxScooter, Inc.
Part A
1. According to AS5:
a) What should the auditor consider when determining whether an
account should be considered significant?
b) What qualitative factors might cause an account that is
otherwise relatively small quantitatively to be considered significant?
c) What qualitative factors might cause an account that is greater
than materiality to be considered not significant?

2. Auditing standards require the identification and testing of entity-
level controls. What are examples of entity-level controls? What are
the auditor’s responsibilities with respect to evaluating and testing a
client’s period-end financial reporting process?
Part B
1. What are the definitions of a control deficiency, significant
deficiency, and material weakness as contained in AS5? Which, if
any, of these deficiency categories must the external auditor include
in the audit report?
*********************************************************************
ACC 546 Individual Assignment Evaluating the
Case Against Lehman Brothers
ACC 546 Individual Assignment Evaluating the Case Against Lehman
Brothers
The Case Against Lehman Brothers”. Write a 750- to 1,050-word
evaluation. Analyze and then summarize the responsibilities and

failings of the firm, the firm’s accountants, and government
regulators.
Provide an update in the case against the firm, its top executives, and
accountants.
Apply what you learned to your current or future profession. How will
you integrate this knowledge to make you a better employee
*********************************************************************
ACC 546 Laramie Wire Manufacturing
Assignment
ACC 546 Laramie Wire Manufacturing Assignment
*********************************************************************

ACC 546 Week 1 Assignment Avoiding Bias
Paper
Avoiding Bias Paper - Assessment Activity - Week1 - ACC/546 -
eCampus
Read the pages 1-9 section of Professional
Judgment and distinguish the four tendencies toward professional
judgment bias:
1. Availability Tendency
2. Confirmation Tendency
3. Overconfidence Tendency
4. Anchoring Tendency
In a paper 750 to 1,050 words, evaluate how an auditor can avoid
these bias traps. For the remainder of the course and subsequent
assignments, continue to consider and utilizeyour understanding
ofthese biases.
*********************************************************************
ACC 546Case 4.1 Enron Corporation &
Andersen, LLP

1)What were the business risks Enron faced, and how did those risks
increase the likelihood of material misstatement in Enron’s financial
statements?
2) In your own words, summarize how Enron used SPE’s to hide
large amounts of company debt
(a) What are the responsibilities of a company’s board of directors?
(b) Could the board of directors at Enron-especially the audit
committee-have prevented the fall of Enron?
(c) Should they have known about the risks and apparent lack of
independence with the Enron’s SPEs? What should they have done
about it?
(a) Explain how “rule-based” accounting standards differ from
“principle-based” standards.
(b) How might fundamentally changing accounting standards from
“bright-line” rules to principle-based standards help prevent another
Enron-like fiasco in the future?
(c) Some argue that the trend toward adoption of international
accounting standards represents a move toward more “principle-
based” standards. Are there dangers in removing “bright-line” rule?
What difficulties might be associated with such a change?

(a) What are the auditor independence issues surrounding the
provision of external auditing services, internal auditing services, and
management consulting services for the same client?
(b) Develop arguments for why auditors should be allowed to perform
these services for the same client.
(c) Develop separate arguments for why auditors should not be
allowed to perform non-auditservices for their audit clients. What is
your view, and why?
(a) A perceived lack of integrity caused irreparable damage to both
Andersen and Enron. How can you apply the principles learned in
this case personally?
(b) Generate an example of how involvement in unethical or illegal
activities, or even the appearance of such involvement, might affect
your career.
(c) What are the possible consequences when others question your
integrity? What can you do to preserve your reputation throughout
your career?
7) Enron and Andersen suffered severe consequences because of their
perceived lack of integrity and damaged reputations. In fact, some
people believe the fall of Enron occurred because of a form of “run
on the bank.” Some argue that Andersen experienced a similar “run
on the bank” as many top clients quickly dropped the firm in the wake
of Enron’s collapse. Is the “run on the bank” analogy valid for both
firms? Why or why not?
8. Why do audit partners struggle with making tough accounting
decisions that may be contrary to their client’s position on an issue?
What changes should the profession make to eliminate these
obstacles?

9. What has been done, and what more do you believe should be done
to restore the public trust in the auditing profession and in the
nation’s financial reporting system?
*********************************************************************

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