Nextcard Inc

NextCard, Inc. In this particular case, Jeremy Lent and the many executives of NextCard needed to raw(a) up the company’s stock price and to encounter credibility on Wall Street and among private investors. They believed this was manipulable by concealing the extent and source of the company’s fiscal problems. “The principal means used to accomplish this get by was understating NextCard’s massive credit losses by refusing to hatful over equal allowances each period for expected disconsolate debts.” Robert Trauger, the scrutinize engagement partner which authorized an unqualified touch sensation for the 2000 financial statements, Oliver Flanagan, and Michael Mullen decided they would take matters into their own hands quite of delay for the outcome of the various federal investigations of NextCard. Unfortunately, the Securities and Exchange way rule against them and they were all sentenced accordingly. Aud itors 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 mostly genuine auditing standards. All three categories of fraud venture factors were arrange 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 interdict property flows from operations or inability to generate cash in flows from operation, need to obtain additional debt or equity livelihood 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 s ingle person or small group. Lastly, the ris! k factors relating to...If you need to get a full essay, order it on our website: OrderCustomPaper.com

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