Nextcard Inc

NextCard, Inc. In this particular case, Jeremy Lent and the many executives of NextCard needed to freshly up the company’s stock price and to name credibility on Wall Street and among private investors. They believed this was gentle by concealing the extent and source of the company’s fiscal problems. “The principal means used to accomplish this call off was understating NextCard’s massive credit losses by refusing to go through over equal allowances each period for expected atrocious debts.” Robert Trauger, the scrutinize engagement partner which authorized an unqualified assurance for the 2000 financial statements, Oliver Flanagan, and Michael Mullen decided they would take matters into their own hands kinda of delay for the outcome of the various federal investigations of NextCard. Unfortunately, the Securities and Exchange direction rule against them and they were all sentenced accordingly. Auditors 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 clobber misstatement of the financial statements whether due to error or fraud, according to the mainly genuine auditing standards.

All three categories of fraud assay factors were insert 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, recurring pre vent property flows from operations or inab! ility to generate exchange flows from operation, need to obtain additional debt or equity relief 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 claim to get a full essay, order it on our website: OrderCustomPaper.com

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