Assignment I
Summary:
Read the assigned case, answer the questions in the textbook, and create one multiple choice question (no true/false accepted) with four answer choices. Include the correct answer.
Case: Navistar International
i. Would you characterize the Deloitte audit of Navistar a failed audit? Answer based on the ethics rules of conduct in the AICPA Code as they pertain to audit engagements and the facts of the Navistar case.
ii. Evaluate the deficiencies in internal controls and corporate governance at Navistar. Do you believe external auditors should be expected to discover fraud when a company, such as Navistar, is so poorly run that its personnel did not have the necessary training and expertise, its internal controls were deficient, and it relied too heavily on Deloitte to determine GAAP compliance? Explain.
iii. What is the purpose of the PCAOB audit firm inspection program with respect to ensuring that auditors meet their ethical and professional responsibilities and obligation to place the public interest above all else?
Assignment II
Summary:
Read the assigned case, answer the questions in the textbook, and create one multiple choice question (no true/false accepted) with four answer choices. Include the correct answer.
Case: Diamond Foods- Accounting for Nuts
i. Use the Fraud Triangle to analyze the business and audit risks that existed at Diamond Foods during the period of its accounting fraud.
ii. How would you characterize Diamond's accounting? Did they commit an error in recording walnut grower payments? Was it an illegal act? A fraudulent act? For each one, explain the reporting requirements for Deloitte assuming they were aware of the transactions.
iii. What are auditors' obligations with respect to accounting estimates and judgments made by management? Explain any concerns that should have existed about these areas of the audit. Assume that Deloitte was aware of these issues. Would any of them rise to the level of a critical audit matter? Explain.
iv. Do you think non-GAAP information, such as that provided to financial analysts, should be audited? Consider the value of such information to the users of financial reports in answering this question.
Format your homework according to the following formatting requirements:
i) The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
ii) The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
iii) Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.