Essay about Case 1.12:Madoff Securities

Peer-Review Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The auditor must assess the transactions for how much of a risk factor is involved. When reviewing these transactions, auditor must be able to review the internal controls of the company’s accounting personnel. The segregation of duties is associated with the safeguarding of an organization 's assets and the topic known as internal control. An example of the segregation of duties would be a company 's requirement that the bank statement for its checking

Peer review is more than just reading someone’s paper and tell them if it’s good or bad. It’s about explaining them what their weaknesses and strengths are. It can also help you as a writer by giving you ideas of how to put stuff together in your essay. Personally, I believe that I was really engaged when it came to peer reviewing. I truly appreciated the criticism and honesty of my peers and I hope that they feel the same way about me. I tried to explain to them what was wrong with each page step by step and what are some of their weaknesses and strengths.

Discussion Board—Your initial response will be a reflection on last week’s peer review process from last week. Explain three pieces of feedback and how you incorporated this feedback into your final draft. Also, did you agree with the feedback you received? Why or Why not? Then, respond to at least two peers. Compare and contrast your responses with theirs’. Did you see any patterns? Share your findings with your peers.

To begin the review process there should be some knowledge of the processes and procedures in the accounting department. It may be a good idea to observe all of the procedures that go into creating the financial statements. Look for any weaknesses or questionable practices and create a list of questions. Then in the next phase the auditor can conduct interviews to get a better understanding of the accounting staff. Observations and interviews can set the groundwork and provide information into any nuances or potential fraud or abuse. Any material weaknesses found can be further explored.

Peer-review means that the article is reviewed by colleagues that are specialized in the topic of interest. Peer-review is important to research because it gives the article legitimacy.

11-6: In most companies, management is responsible for the financial statements (Wells, 2013, p. 280). The first thing management can do to ensure the integrity of their

See id. Peer review is used to review the qualifications and credentials of health care providers to determine whether they may practice in a particular hospital and, if so, under what parameters. Peer review, in this regard, is also a critical part of the determination that a physician or other health care provider should not be allowed to practice, in whole or in part.

Madoff promised their clients to invest in its investment-advisory entity, so the investors would earn returns

Peer review is a process by which a professional’s work or research is evaluated by other professionals similar to or higher in expertise than the professional creating the work. Scholarly peer

The process of peer reviewing is beneficial to the journal because it validates the provided information from many credible sources and eliminates any bias that may have been in the original piece. By passing it onto several different professionals that are all diverse in their own ways, one expert may point out a bias and provide

“Audit committee members or their agents may proactively examine areas, functions, and personnel where collusive fraud risk is reasonably likely to be perpetrated,” (Zmags). The search for fraud, even if performed in the same location multiple times, may continue until the audit committee feels confident that they have ruled out the probability that fraud is prevalent. One of the biggest risks of fraud is management override of controls, requiring the extensive search for risk in, “journal entries and other adjustments and reviewing accounting estimates for possible biases that could result in material misstatements,” (Nysscpa).

Due diligence is “A comprehensive appraisal of a business undertaken by a prospective buyer, especially to establish its assets and liabilities and evaluate its commercial potential.” (Oxford Dictionaries). Every investor and self-respecting business should do their homework before trusting any other business with their money. Fairfield Greenwich Group claimed a loss of $7 billion that has “vaporized” with Bernie Madoff (Blodget, H., April 1, 2009). The Fairfield Greenwich assured their e-clients that they did their due diligence by thoroughly researched Madoff by learning about their managers, operational practices, staff, and infrastructure. The group also said that they have higher standards and sorting process than any other average consulting firm (Blodget). However, FGG were also supposed to analyze Madoff’s trading records. Apparently, they did not do their proper due diligence because Madoff did not have trading records; thus, it was impossible to replicate and analyze those essential documents. In addition, FGG needed to at least, monitor his activities for a couple of months to see what kind of results he is getting. The group is being sued by Massachusetts regulators for not doing due diligence that they claimed they did, misleading their clients, and investing more than a half of their assets into Madoff’s firm (Henriques, D.B., April 1, 2009).

“The financial statements are management’s responsibility. The auditor’s responsibility is to express an opinion on the financial statements. Management is responsible for adopting sound accounting policies and for establishing and maintaining an internal control structure that will, among other things, record, process, summarize, and report

The auditor’s responsibilities are to audit annual financial statements and internal controls over financial reporting, and reports from the 10-Q quarterly reports. The auditor must also advice on new accounting pronouncements, and consolidating financial statements. (Intel Proxy Statement 2011, 48)