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Refer to the Focus on Fraud feature″ Fraud Risks Related to Debt and Equity: Ins
Refer to the Focus on Fraud feature″ Fraud Risks Related to Debt and Equity: Insights from SEC Accounting and Auditing Enforcement Releases.″ Review the panel related to Delphi Corporation.
a. What risks of material misstatement were present in the case?
b. What are the auditor′s responsibilities related to auditing retained earnings? What procedures should the auditor have performed?
c. Identify ways in which the audit team appeared to have a lack of appropriate professional skepticism.
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