Auditors and Regulatory Oversight

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Business Finance


The Securities and Exchange Commission (SEC) regulates public companies. The SEC has found that some of these companies have violated GAAP by using creative accounting practices to mislead investors and creditors regarding the health of their company.

Use the Internet to research a recent accounting scandal within the last five (5) years where the SEC accused public companies of accounting irregularities.
Write a three to four (3-4) page paper in which you:

  1. Analyze the audit report that the CPA firm issued. Ascertain the legal liability to third parties who relied on financial statements under both common and federal securities laws. Justify your response.
  2. Speculate on which statement of generally acceptable auditing standards (GAAS) that the company violated in performing the audit.
  3. Compare the responsibility of both management and the auditor for financial reporting, and give your opinion as to which party should have the greater burden. Defend your position.
  4. Analyze the sanctions available under SOX, and recommend the key action(s) that the PCAOB should take in order to hold management or the audit firm accountable for the accounting irregularities. Provide a rationale for your response.
  5. Use at least two (2) quality academic resources in this assignment. Note: Wikipedia and other Websites do not qualify as academic resources.

Your assignment must follow these formatting requirements:

  • Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
  • Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

  • Analyze the required generally accepted auditing standards, professional ethics, and legal liability of the auditor.
  • Assess how the Sarbanes-Oxley Act has affected auditing.
  • Evaluate an audit report.
  • Evaluate objectives for conducting audits, and compare management’s and auditors’ responsibilities.
  • Use technology and information resources to research issues in auditing.
  • Write clearly and concisely about auditing using proper writing mechanics.

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Explanation & Answer



Auditory and regulatory oversight
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2 Accounting Violations

1. Analyze the audit report that the CPA firm issued. Ascertain the legal liability to
third parties who relied on financial statements under both common and federal
securities laws. Justify your response. has been known to utilize creative accounting procedures to overstate its
earnings thus deceiving creditors and investors pertaining to their company’s financial status.
There was use of earnings before interest, tax, depreciation and amortization (EBITDA)
calculations by the company from Q2 2007 to Q2 2008 to overstate its earning and financial
status which was in defilement of the Securities and Exchange Commission Regulation G which
expects firms to disclose publicly documented records that contain non-GAAP financial
procedures accompanied by an appeasement that is greatly directly similar to other Generally
Accepted Accounting Principles (GAAP) financial procedures.

Moreover, there was defilement of GAAP and material overstatement of its financial
performance from Q4 2008 to Q3 2009. Antar (2013) issued with a detailed
report on its accounting violations but it rather chose to belittle the victim who was tryin...

Really helped me to better understand my coursework. Super recommended.


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