Assigntment 1 Nextcard Inc

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Given PCAOB oversight of accounting firms and the AICPA Code of Conduct, discuss whether or not you believe that public accounting firms can successfully manipulate audit work papers and records of clients engaged in fraudulent activity. Based on my research and knowledge obtain from study, I do not believe a public accounting firm of today can successfully manipulate audit work papers and records of clients that engaged in fraudulent activities without getting caught by officials. As a result of the Sarbanes-Oxley Act of 2002 passed by congress, the PCAOB had to established standards that required audit firms to prepare audit documentation sufficiently detailed to support the conclusions reached in audits of their publicly held clients (Lynford, Gretchem, Ahern & Whittinton, 2006). The revisions made to SAS no. 96 were that audit documentation be sufficient for an experienced auditor to understand. Several guidelines stated that auditors could not (a) use oral explanations alone to support their work or conclusions, (b) must provide new guidance for determining the date of the auditor’s report, (c) establish a time limit of 60 days for assembling the audit team, and (d) establish a minimum period for retaining the audit documentation (Lynford, Gretchem, Ahern & Whittinton, 2006). Analyze the fraud risk factors presented during the 2000 Nextcard audit and how each should have impacted the audit procedures. Although NextCard executives realized early there were huge flaws in the business process created by NextCard’s CFO Jeremy Lent, executives and upper management continue to set in motion Lent vision of making NextCard the world’s number one credit card distributer. The first fraud risk presented in this case study was the incentive and pressure faced by Jeremy Lent and some of his top executives of obtaining a goal of one million credit card customers

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