Nextcard Inc

NextCard, Inc. In this particular case, Jeremy Lent and the many executives of NextCard needed to spick-and-span up the company’s stock price and to bank note credibility on Wall Street and among private investors. They believed this was pliant by concealing the extent and source of the company’s fiscal problems. “The principal means used to accomplish this look at was understating NextCard’s massive credit losses by refusing to lot over equal allowances each period for expected negative debts.” Robert Trauger, the scrutinize engagement partner which authorized an unqualified thought for the 2000 financial statements, Oliver Flanagan, and Michael Mullen decided they would take matters into their own hands alternatively of delay for the outcome of the various federal investigations of NextCard. Unfortunately, the Securities and Exchange flush rule against them and they were all sentenced accordingly. Audit ors should not evaluate the soundness of a knob’s business model. Instead they should obtain a sufficient understanding of the entity and its environment, including internal control, and assess the fortune of somatic misstatement of the financial statements whether due to error or fraud, according to the principally genuine auditing standards.

All three categories of fraud assay factors were surrender during the 2000 NextCard audit. assay factors relating to incentives/pressures to report fraudulently include, but are not particular(a) to, operating losses making the threat of bankruptcy, rec urring foresee property flows from operat! ions or inability to generate silver flows from operation, need to obtain additional debt or equity backup man to stay competitive, and significant financial interests in the entity. A risk factor relating to opportunities to report fraudulently is ineffective monitoring on management due to domination of management by a single person or small group. Lastly, the risk factors relating to...If you exact to get a full essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper