Nextcard Inc

NextCard, Inc. In this particular case, Jeremy Lent and the many executives of NextCard needed to wise up the company’s stock price and to unwrap credibility on Wall Street and among private investors. They believed this was yielding by concealing the extent and source of the company’s fiscal problems. “The principal means used to accomplish this name and address was understating NextCard’s massive credit losses by refusing to helping hand over equal allowances each period for expected braggart(a) debts.” Robert Trauger, the scrutinize engagement partner which authorized an unqualified whim for the 2000 financial statements, Oliver Flanagan, and Michael Mullen decided they would take matters into their own hands instead of delay for the outcome of the various federal investigations of NextCard. Unfortunately, the Securities and Exchange fit 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 cloth misstatement of the financial statements whether due to error or fraud, according to the in general genuine auditing standards.

All three categories of fraud take a chance factors were front 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 anticipate property flows from operations or inability to genera te specie flows from operation, need to obt! ain 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 single person or small group. Lastly, the risk factors relating to...If you postulate to get a full essay, order it on our website: OrderEssay.net

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