Describe in simple language and in detail, the purpose of the fraud. (e.g. why did they do it?).
Reading homework help
1. Describe in simple language and in detail, the purpose of the fraud. (e.g. why did they do it?)
2. What is the auditor’s responsibility with respect to debt covenants when opining on financial statements? What are the financial covenants with Ventas as you understand them from the case? What is the purpose of financial covenants from a lessor’s perspective?
3. What was the impact on the financial statements from the fraud? i.e. what would the statements have looked like if management did not commit fraud and reported truthfully? What would have been the implications to ALC?
4. What evidence was provided to GT from ALC management to support their practice for the 2009 audit? Was this sufficient? – “No”. What evidence was included in the GT workpapers? What evidence could have been sufficient for the auditor’s to conclude that management’s practice was acceptable and authorized by Ventas?
5. From your reading of the SEC documents, please provide examples of failures on the part of the lead engagement partner with respect to his/her audit of ALC? One way to approach this question is to provide a comparison of what she did do, vs. what she should have done. Be as specific as possible.
6. In the not-too-distant future, you will be “junior auditors” as identified in this case study. What could/should the junior auditors have done differently in the 2009 and 2010 audits performed by GT?
7. Using examples from this case, why is it important for an auditor to understand a client’s business operations? Were other signs of fraud present?
8. What did this fraud cost ALC and GT? Think big picture in this response.