Ptl Club Essay

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The PTL Club Prepared by Table of Contents I) Table of Contents II) Key Facts III) Issues IV) References Key Facts A) PTL, which stands for praise the lord club is a religious institution ran by Jim and Tammy Baker. B) It was discovered that there was a secret account to pay Mr. Baker’s secretary to cover up an indiscretion between Mr. Baker and his secretary. C) An investigation involving the IRS and FBI commenced to look into the misappropriation of funds. D) TL Club had a very weak internal control. As it is pointed out in the case, whenever Jim Bakker needed money, he could just simply make a board member introduce a resolution for a bonus. Auditors could not find necessary documents to support expenses and revenue. Compensation was excessive far beyond the regulation of IRS. Many of the proceeds were used for exotic vacations, vacation homes and other inappropriate use. E) A 130 million dollar judgment was ruled against Jim Bakker, and to be paid to the plaintiffs. Issues 1.Identify the ethical questions raised by the maintenance of PTL’s secret payroll account by laventhol partner. Does the fact the PTL was a private organization not registered with the SEC affect the propriety of the partner’s actions? The time line of H&L’s audit of PTL Club is: End of fiscal year (May 31, 1984), Audit Completion Date (Dual dated as August 31, 1984 and October 24, 1984). Based on the timeline and the above definition of subsequent events, I believe that it is a subsequent event. But whether Deloitte needed to evaluate the sales occurring after the balance sheet date of May 31, 1984 depends on the materiality of the over sales occurring during May 31, 1984 and October 24, 1984. It was said that over sales occurred shortly after May 31, 1984. Then how big was

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