Explain the Securities and Exchange Commission’s rationale to charge Cardillo executives

Explain the Securities and Exchange Commission’s rationale to charge Cardillo executives

Review the Cardillo Travel Systems case, located in Chapter 6 of your textbook.

Write a four to five page paper in which you:

1. Explain the Securities and Exchange Commission’s rationale to charge Cardillo executives witheach of the following violations:

a. making false representations to outside auditors
b. failing to maintain accurate financial records
c. failing to file prompt financial reports with the SEC
d. violating the insider trading provisions of the federal securities laws

2. Determine who was in violation or complianceof the AICPA’s Code of Professional Conduct in this case study and analyzethe key reasons why they were or were not in compliance. Provide support for therationale.

3. Analyze the actions taken by Cardillo’s outside auditors and evaluate the level of efficiency of the audit risk management in this case study. Provide support for the rationale.

4. Determine whether or not the five components of internal control were being followed. Support theresponsewith at least two examples.

5. Create an argument for or against whether auditors have a responsibility to assess the judgment of the decisions made by Cardillo’s management. Support the argument.

6. Use at least two quality academic resources in this assignment. Note: Wikipedia and similar type Websites do not qualify as academic resources.

Your assignment must follow these formatting requirements:

• Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.

• Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

• Analyze the process and regulatory requirements for professional ethical decisionmaking.
• Analyze the critical factors of business, audit, and planning risks, and the process of managing these risks in audit engagements.
• Analyze an audit framework and assessment process for evaluating the effectiveness of internal controls related to financial reporting.
• Use technology and information resources to research issues in auditing.
• Write clearly and concisely about auditing using proper writing mechanics.

Required Resources

Rittenberg, L. E., Johnstone, K., Gramling, A., & Knapp, M. C. (2012). Auditing: A Business Risk Approach with Cases (8th ed.). United States: South-Western, Cengage Learning.(Note:This is a textbook uniquely created for Strayer and can only be purchased through the Strayer Bookstore. The contents of the book differ from the national title.)

Supplemental Resources

Andrews, C., & LeBlanc, B., (2013). Fraud hotlines: Don’t miss that call. Journal of Accountancy. Retrieved from http://www.journalofaccountancy.com/Issues/2013/Aug/20127043.htm

Ference, S., (2013). Independence is in the eye of the beholder. Journal of Accountancy. Retrieved from
http://www.journalofaccountancy.com/Issues/2013/Jun/20137656.htm

McNeal, A., (2013). What’s your fraud IQ? Journal ofAccountancy. Retrieved from http://www.journalofaccountancy.com/Issues/2013/Aug/20137338.htm

Rood, D., (2013). Is this client the right fit for your firm? Journal ofAccountancy. Retrieved from
http://www.journalofaccountancy.com/Issues/2013/Jul/20137770.htm

Ziemba, S. (2012). Ethics IQ quiz. Journal ofAccountancy. Retrieved from http://www.journalofaccountancy.com/Issues/2012/Oct/20125461.htm

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