Nextcard Inc

NextCard, Inc. In this particular case, Jeremy Lent and the many executives of NextCard needed to novel up the company’s stock price and to maintain credibility on Wall Street and among private investors. They believed this was tame by concealing the extent and source of the company’s fiscal problems. “The principal means used to accomplish this plough was understating NextCard’s massive credit losses by refusing to eliminate over equal allowances each period for expected faulty debts.” Robert Trauger, the scrutinize engagement partner which authorized an unqualified eyeshot for the 2000 financial statements, Oliver Flanagan, and Michael Mullen decided they would take matters into their own hands alternatively of delay for the outcome of the various federal investigations of NextCard. Unfortunately, the Securities and Exchange missionary station rule against them and they were all sentenced accordingly. A uditors should not evaluate the soundness of a knob’s business model. Instead they should obtain a sufficient understanding of the entity and its environment, including internal control, and assess the fortune of existent misstatement of the financial statements whether due to error or fraud, according to the principally genuine auditing standards.

All three categories of fraud pretend factors were gravel during the 2000 NextCard audit. assay factors relating to incentives/pressures to report fraudulently include, but are not particular(a) to, operating losses making the threat of bankruptcy, recurring require property flows from op! erations or inability to generate change flows from operation, need to obtain additional debt or equity fill-in to stay competitive, and significant financial interests in the entity. A risk factor relating to opportunities to report fraudulently is ineffective monitoring on management due to domination of management by a single person or small group. Lastly, the risk factors relating to...If you guide to get a full essay, order it on our website: OrderCustomPaper.com

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