Zzzzbest Essay

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What specific mistakes (apart from failure to notice “red flags”) did the auditor make? For each mistake, describe what the auditor should have done. If you were the Managing Partner for the CPA firm and had full knowledge of all the facts and events in the case, what changes in policy or procedures would you implement to make sure this audit failure does not occur in the future? The first mistake that the auditors made involved Mr. George Greenspan during the 1986 audit. This was the first audit that ZZZZ Best had as a public company and the mistake involved the inspection of the insurance restoration sites. Mr. Greenspan had talked with Tom Padgett, and even though Mr. Padgett confirmed the insurance contracts were real and showed proper documents to back them up, Mr. Greenspan never actually inspected any of the actual insurance restoration sites. Had the sites been checked, Mr. Greenspan could have stopped the scam from ever hurting the public stockholders. After looking at this mistake, Greenspan should have made it a very high priority to inspect the insurance sites, especially because they amounted for such a huge percentage of income for ZZZZ Best. The second mistake involved Ernst & Whinney, which was the auditor for ZZZZ Best after Greenspan was let go. During the interview between Greenspan and the congressional subcommittee, Greenspan reported that Ernst & Whinney never got in touch with him to talk about ZZZZ Best and to hear his side of the story as to the reason of ZZZZ Best letting him go. Had this conversation occurred, Greenspan might have been able to discuss his neglection to inspect the insurance restoration sites, which therefore could have given Ernst & Whinney a heads up to do so. Ernst & Whinney should have contacted Greenspan because it's a normal protocol to adhere to, and because it could have stopped the fraudulent acts of ZZZZ Best

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