Knapp Nextcard Case

Case 5.8 NextCard, Inc. 1.Should meeters evaluate the soundness of a clients commerce fix up? Defend your answer. Auditors should not evaluate the soundness of a clients course model. They are not required to have knowledge and expertness to start and contain a successful profession. A business model is usually evaluated by a bank or other financial institution that the society acquires capital from. An attender is required to uphold integrity and has a responsibility to the stockholders to affirm competence and independence. All of this must be achieved while examining sufficient, disposed(p) take the stand to obtain reasonable assurance as to the cloth rectitude of the clients financial statements. This evidence supports what has happened thus far in the clients business. A business model is a prediction of what is pass fancy for the business by optimistic, biased counselling, not what has happened in the past. An canvasors use does not include predict ing the start-up future of a business, nor to rule enter out of the closet lampoon. 2.Identify and briefly describe the specific fraud take chances factors present during the 2000 NextCard audit. How should these factors have affected the planning and effect of that engagement?

There were many risk factors present during the 2000 NextCard audit: unusually rapid growth and profitability, significant related-party transactions, poor or change state financial terminal figure when management guarantees debt, and management uses aggressive story measures to boost stock price. NextCard, integrated respect ively demonstrated these risks as: extending! $1 billion of assurance to its customers with an average balance of $2000, executives sold-off bountiful portions of their ownership interests in the company before the financial condition became apparent, in 1999 the company produced a termination of $77.2 billion followed by a $81.9 billion loss in 2000 and NextCards executive chose to screen the companys financial problems, and the management materially...If you regard to get a broad essay, order it on our website: OrderCustomPaper.com

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