Auditing Project Overview:
Case:
You will be asked to address an accounting malfunction from AMERICAN INSURANCE GROUP (A scandal took place in 2005). The format of the project is that you have been appointed by the audit committee of a company with an accounting issue from American Insurance Group. The audit committee desires guidance on how to address and resolve this issue.
You are being appointed by the company and are asked to give the following:
• Overview of the situation/accounting issue involved.
• Identification of the Areas of Risk
• Document summarizing possible mitigation of the risks
• Flowchart detailing the proposed flow of the resolution
Your analysis must include research of publically available information about that company and can also comprise assumptions which must be documented as such. External research is encouraged.
Additional Items to Consider:
• Who was the whistleblower/how did the issue become public/how did issue become public?
• How would it have been prevented?
• Where there any red flags.
• Should someone have caught it sooner?
• Analysis of financial statement footnotes the period before the issue became public
• Analysis of financial statement footnotes after the issue become public
• Rate the job of the auditor. What could the auditor have done better?
• Financial impact to shareholders/investors?
• Complete conclusion/explanation/suggestion – what did you take away from the case.
Deliverables: Summary Memorandum to Audit Committee, Flowchart
• Paper summarizing the questions above.
• Preparation of flow chart and any other applicable exhibits.