Discussion Topic: Audit FailuresThe purpose of the audit is to provide assurance as to the accuracy of financial statements. Situations such as the Enron collapse, which were largely due to the failure of an auditor to detect fraud and even concealed it, led to significant public unrest and market failure. Discuss an article involving audit failure and how it led to public unrest. Also, when evaluating the article referenced, discuss how audit testing should have uncovered audit failure.Also response each posted # 1 to 3 down belowPosted 1Barry Minkow founded the “insurance restoration” company ZZZZ Best. With the help of an insurance claim adjuster friend (Tom Padgett), Minkow formed a fake company called Interstate Appraisal Service which verified details of the fake insurance restoration contracts. George Greenspan, CPA, audited ZZZZ Best in 1986 and failed to visit any of the insurance restoration sites. The “sites” were actually random mailboxes throughout the San Fernando Valley. Greenspan received the bulk of his audit evidence though interviews and documentation obtained from Interstate Appraisal Service, the party to substantially all the reported restoration contracts. ZZZZ Best’s restoration business was a sham and Padgett and Minkow worked together, along with other co-conspirators who had ties to organized crime, to defraud lenders and investors out of millions of dollars. Ernst and Whinney was later retained as ZZZZ Best’s accountant in September of 1986 when the company wanted to go public. Ernst and Whinney conducted a review of Best’s financial statements for the three-month period ended July 31, 1986 to assist ZZZZ Best with its public filings.As part of audit procedures (for the 1987 audit), an Ernst and Whinney partner visited an insurance restoration site (after being denied the visit several times initially) which was a building ZZZZ Best rented out to continue the fraud. ZZZZ Best added signs; “hired” phony staff; paid the security guards at the building to be complicit; and made Ernst and Whinney sign a non-disclosure agreement where the firm agreed not to contact the building owner, contractors, insurance adjusters, etc. regarding the restoration project. The firm also agreed that the partner would be the only firm representative allowed on the tour and agreed not to disclose the location of the building, severely limiting the scope of the audit. Later, Ernst and Whinney discovered evidence of fraud (mostly through the media and an informant) at ZZZZ Best and resigned. They did not disclose the reason for the resignation to the SEC for six weeks, which was allowed. In the meantime, ZZZZ Best continued to defraud banks and investors before the company went bankrupt.Greenspan should have conducted restoration site visits as part of his audit testing. Additionally, he should have approached the relationship between Interstate and ZZZZ Best with a more critical eye. Ninety percent of the insurance restoration contracts and related revenue ZZZZ Best reported were from Interstate. The internal controls at ZZZZ best were grossly inadequate – proper testing would have alerted the auditor. Contracts consisted of a single page with no details or other specifications which should have raised a red flag. The contracts did not identify the insured parties, the insurance companies or the locations of the job. Greenspan did not question the information, nor did he contact the insurance companies or the insured parties to confirm details of the contracts. The number of multimillion-dollar restoration contracts exceeded the total number available nationwide for that time period. Additionally, the amounts of the restoration contracts were unusually large. Had Greenspan spent time understanding the industry, he would have discovered this. Additionally, reviewing the changes in financial ratios from year to year would have given some indication of accounting irregularities. For instance, the current ratio of assets to liabilities went from 36 in 1985 to less than 1 in 1986 meaning the company had no cash despite showing record revenues. The 1986 debt to equity ratio was up 8600% from the prior year. These were not indicators of a legitimate business and should have alerted Greenspan to something in the milk not being clean. Even though Ernst and Whinney did not complete their audit, had they done their due diligence they never would have accepted ZZZZ Best as a client. The company management had no experience; some managers and business partners had ties to organized crime; and Minkow had a past of forgery and bank fraud. Additionally, once Minkow tried to keep Ernst and Whinney from visiting its restoration sites and only allowed it when the company could limit the scope of the audit, Ernst and Whinney should have known something was amiss. Additionally, Greenspan stated he was never contacted by the successor auditor which is an audit requirement. ReferencesWells, J.T., (2001). Irrational rations. Retrieved from https://www.journalofaccountancy.com/issues/2001/aug/irrationalratios.htmlGaines, S., (1988). In fraud case, CPA practices on trial. Retrieved from https://www.chicagotribune.com/news/ct-xpm-1988-01-31-8803260897-story.htmlPosted 2The article that I chose talks about a very recent audit failure in the audit of the Germany-based Wirecard AG, which was one of the biggest and fastest-growing European fintech. EY audited Wirecard for over a decade and failed to obtain sufficient audit evidence on the € 1.9 billion belonging to the company that was supposed to be held in trust accounts (Davies, 2020). The company filed for bankruptcy in June 2020 after confirming that the € 1.9 billion it had listed as assets probably didn’t exist.After this event, EY has faced widespread criticism because of its failure to properly audit Wirecard’s accounts over several years (Aaron, 2020). The accounting firm was also sued in Germany by the company’s investors, which alleged that EY failed to identify that the assets were improperly booked on the company’s 2018 accounts. Because of this situation, EY Chairman had to send a letter to clients to explain about this failure.In my opinion, the auditors failed to properly access the reliability of the bank confirmation received during the audit. The audit plan should have considered the form of the confirmation requested, as well as the intended respondent and the nature of the information being confirmed. Additionally, in situation involving significant transactions or balances the auditor should exercise a heightened degree of professional skepticism about the respondent.ReferencesAaron, Tony (2020, Sep 15). Auditor EY Expresses ‘Regret’ Over Failures After Wirecard Collapse. Bloomberg (Online) Retrieved from https://www.bloomberg.com/news/articles/2020-09-15...Posted 3In the article, "WeWork: Auditor EY didn’t warn about the risks", the writer points out that EY's client, WeWork, did not disclose material weaknesses in the company's financial reporting internal control processes (McKenna, 2019). The article explains the public concern of WeWork's canceled IPO and the conflicts of interest within the relationships with WeWork's CEO and the companies WeWork leases properties from.EY did not find those relationships to be risks during their audit risk assessment procedures at WeWork. The relationships had direct conflicts of interest because WeWork executives had direct financial benefit from the companies they leased the properties from. Therefore, EY failed to detect fraud in their audit of WeWork.Reference:McKenna, Francine (2019). WeWork: Auditor EY didn’t warn about the risks. Retrieved from: https://thedig.substack.com/p/wework-auditor-ey-didnt-warn-about

The Saudi Vision 2030 is a plan to diversify the economy and develop sectors such as education, infrastructure, and tourism. The government encourages private investment in transportation and renewable energy. It emphasizes economic and investment activities and increasing non-oil industry trade between countries. What would be the role of FDI (Foreign Direct Investment) to achieve the aims of the Saudi Vision 2030; what might be some challenges with Vision 2030 that Saudi Arabia faces?Search the Internet for an academic or industry-related article. Select an article that relates to these concepts and explain how it relates to doing business in Saudi Arabia.For your discussion post, your first step is to summarize the article in two paragraphs, describing what you think are the most important points made by the authors (remember to use citations where appropriate). For the second step, include the reference listing with a hyperlink to the article. Do not copy the article into your post and limit your summary to two paragraphs. Let your instructor know if you have any questions and enjoy your search.You are required to reply to at least two peer discussion question post answers to this weekly discussion question and/or your instructor’s response to your posting. These post replies need to be substantial and constructive in nature. They should add to the content of the post and evaluate/analyze that post answer. Normal course dialogue doesn’t fulfill these two peer replies but is expected throughout the course. Answering all course questions is also required.