Should accounting firms be held criminally if they do not detect fraud?
Question Description
I’m working on a Accounting question and need guidance to help me study.
On October 13, 2022, the Security and Exchange Commission announced charges against a New Jersey Real Estate Development Firm and Four Executives with running a $600 Million Ponzi-Like Fraud. While they did not have audited financial statement, they did have an accounting firm that provided attest functions and filed tax returns.
Accounting firms and auditors are considered gate keepers, when and how should forensic accountants be utilized during attest engagements? Should accounting firms be held criminally and/or pay civil penalties if they do not detect fraud?
The following should jump start your research
https://www.sec.gov/news/statement/munter-statement-fraud-detection-101122
https://www.sec.gov/news/press-release/2022-188
https://www.sec.gov/litigation/complaints/2022/comp-pr2022-188.pdf
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