Roles and Responsibilities Ashley Hutton Southern New Hampshire University ACC 421: Auditing and Forensic Accounting Richard Barrett October 1, 2023
Roles and Responsibilities Part One: Le-Nature's Inc. Case The first part of the assignment asks to address the corporate governance-related responsibilities of the accountants with the internal roles and the independent auditors and forensic accountants with the external roles. The case was about Gregory Podlucky when he worked took the funds that he got from cashing out his ownership interest in his father's company and established a beverage company called Le-Nature's Inc. He was the CEO of the company and relied on family and friends that he hired in key positions as his company expanded. Corporate governance is a system of practices, processes, and rules that control and direct a firm and balances the interests of all company stakeholders. The responsibilities of the internal roles or accountants in the case would have been to make sure that the financial data being reported to stakeholders of the company is reported accurately and ethically. The accurate reporting of the financial data is how stakeholders decide to direct the company and can't give the true picture of the company's position if the data is misstated and inaccurate. The external roles or independent auditors and forensic accountants have the responsibility to protect shareholders, investors, and potential investors from any possible accounting misconduct and fraud by assessing the correctness of reported financial data and to assess the risks of fraud with the internal controls. Forensic accountants have the responsibility to help companies to create and establish a policy that will outline the responsibilities of each position within the company and ensure that the company has a code of ethics. Part Two: Lehman Brothers Holdings. Inc. Case
This part of the assignment asks to use the Lehman Brothers Holdings, Inc. case to explain the auditor's responsibilities in the case and how they should have handled the case differently. The case is about the Great Stock Market Crash was caused by the largest bankruptcy fraud of a corporate company in history. The company embellished their financial data by making routine transactions of billions of dollars to make the company seem in tip top financial condition. The auditor's responsibility when the whistleblower came forward was to develop a plan to investigate the allegations of the reported fraud with the audit committee and to protect the identity of the whistleblower. The auditor also has responsibilities with respect to other information that may accompany the financial statements of a company that are to read the other information and consider whether there are inconsistencies that exist between the other information and the financial statements and to communicate with management to discuss the matter on whether the understanding of the entity needs to be updated or if the misstatement truly exists and must be corrected in the financial statements. These four responsibilities could have prevented the massive bankruptcy fraud that was committed by Lehman Brothers Holdings, Inc. The second set of questions