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Auditing: Peregine Fraud Case Assignment (Example)

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Peregine Fraud Case Name: Professors Name: Course: Date: PEREGINE FRAUD CASE Question One Peregrine financial group was headed by Russell Wasendorf. He was in control of everything hence he was able to steal millions of dollars from clients. He used certain equipment’s for instance lasers inkjet printers excel scanners and Photoshop. This equipment’s allowed him to forge every document received from the bank for instance bank statements emails and post office bank accounts (Bunge et al. 2012). Those in the fraud triangle included an external auditor National Futures Association (NFA) and Commodities Future Trading Commission (CFTC). They failed to monitor validity of Peregrine’s liquid cash and cash balances hence resulting in fraud. Wasendorf purchased a first-hand electronic verification system which would verify all cash accounts. Those hence they opted to find alternative trading services (Saphir 2012b). References Aldhizer G. and J. Cashell. 2006. Automating the confirmation process. The CPA Journal (April): 6–10. Bunge J. 2013. Peregrine headquarters sold at deep discount. Wall Street Journal (May 31). Available at: online.wsj.com Caster P. and D. Verardo. 2007. Technology changes the form and competence of audit evidence. The CPA Journal (January): 68–70. Janvrin D. P. Caster and R. Elder. 2010. Enforcement release evidence on the audit confirmation process: Implications for standards setters. Research in Accounting Regulation 22: 1–17. Phillips M. 2012. The Peregrine fraud case is worse than you thought. Bloomberg Business week (August 5). Available at: www.businessweek.com Saphir A. 2012b. Peregrine Financial clients face Friday deadline for claims. Reuters (October 5). Available at: http://in.mobile.reuters.com/article/bankingfinancial-SP/idINL1E8L58WR20121005 [...]

Order Description:

Review attached documents and answer questions in Microsoft Word please. 1 Identify the fraud risk factors at Peregrine, especially control environment factors and the tone at the top, using the fraud triangle. 2 What are the primary procedures used to audit cash balances? What significant inherent and control risks present at Peregrine would impact the nature and extent of the procedures to be performed? 3 Peregrine was audited by a one-person CPA firm. How did this play a role in the failure to detect the fraud in this case? Should this have been a red flag for regulators? Why or why not? 4 The fraud was revealed when regulators moved to electronic confirmation of bank balances. What are the advantages of electronic confirmations? 5 What are the risks associated with electronic confirmations? How can an auditor gain confidence in the reliability of responses received electronically? 6 Should electronic confirmation of cash balances be required? Why or why not? Could standard written bank confirmations have been effective in detecting the fraud at Peregrine? Explain your answer. 7 Given the relatively small number of electronic confirmation providers, how will auditors be impacted if: a an electronic confirmation provider’s server goes down for an extended time or if the server is compromised by hackers? b an electronic confirmation provider experiences financial problems or goes out of business?

Subject Area: Accounting

Document Type: Dissertation

This project has already been completed by one of the Studybay experts. The client rated this project:

Project's rating is 5/5

Price $15

Words 550

Pages 2

Completed in 1 day

Expert Jamie Grace

Client Review

Great job!

Positive
10.30.2016

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