Knapp Nextcard Case

Case 5.8 NextCard, Inc. 1.Should meeters appraise the soundness of a clients commerce cross out? Defend your answer. Auditors should not evaluate the soundness of a clients phone line model. They are not need to drive home knowledge and expertness to start and contain a successful calling. A business model is usually evaluated by a bank or other pecuniary cornerstone that the political party acquires capital from. An attendee is required to uphold lawfulness and has a responsibility to the stockholders to save competence and independence. All of this moldiness be achieved while examining sufficient, disposed(p) endorse to obtain reasonable assertion as to the cloth candidness of the clients financial statements. This evidence supports what has happened therefrom far in the clients business. A business model is a prediction of what is pass plan for the business by optimistic, one-sided solicitude, not what has happened in the past. An visitors excogitation does not include predicting the start-up approaching of a business, nor to rule take out of the closet parody. 2.Identify and curtly describe the specific fraud take chances factors present during the 2000 NextCard audit. How should these factors have affected the planning and implementation of that engagement?

There were galore(postnominal) risk factors present during the 2000 NextCard audit: unusually rapid harvest-feast and profitability, significant related-party transactions, poor or change state financial terminal figure when management guarantees debt, and management uses aggressive figment measures to boost stock price. NextCard, corporal respectively demonstrated these risks as: extending $1 billion of confidence to its customers with an average balance of $2000, executives sold-off swelled portions of their ownership interests in the company before the financial specialize became apparent, in 1999 the company produced a disadvantage of $77.2 billion followed by a $81.9 billion loss in 2000 and NextCards executive chose to subterfuge the companys financial problems, and the management materially...If you requisite to get a abundant essay, order it on our website: Ordercustompaper.com

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