The economic crisis in Europe and earlier credit crisis during 2008 have opened up the debate on the role of auditors and the corporate houses are carrying out their activities. The 2008 mortgage crisis resulted in many financial companies going bankrupt while some closing down permanently. The effect of crisis was felt world-over and one Indian company, Satyam Computers went bankrupt and this is a particular case where the role of auditors from PriceWaterCoopers House, India was questioned (The Indian Express, 2012). Larsson (2005) stated that major corporate frauds and scandals are regularly followed by the debate concerning the aim and scope of auditing. While there were such scandals earlier, this paper analyses one such corporate scandal and how it has affected and changed the profession of auditors in coming years.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Company Overview - Hedge Fund Scandal
- Various Causes of the Scandal
- Board Weaknesses
- Management Weaknesses – Fraudulent management practices
- External Audit Weaknesses
- Internal Audit weaknesses
- Other weaknesses
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This paper examines the Bayou Hedge Fund Group scandal and its impact on the auditing profession. The goal is to analyze the causes of the scandal, focusing on weaknesses in the board, management, external and internal audit practices, and other contributing factors. The paper aims to demonstrate how this specific case impacted the auditing profession and potentially prompted changes in auditing regulations.
- Corporate Scandal and its Impact on Auditing
- The Role of the Board and Management in Fraudulent Practices
- Weaknesses in External and Internal Audit Processes
- The Impact of Regulatory Frameworks and Legal Implications
- Ethical Considerations in the Auditing Profession
Zusammenfassung der Kapitel (Chapter Summaries)
The introduction sets the stage for the paper by highlighting the significance of corporate scandals and the auditing profession's role in mitigating such events. The case study focuses on the Bayou Hedge Fund Group scandal, providing an overview of the company's background and the fraudulent activities that led to its downfall. The subsequent sections delve into various causes of the scandal, including board weaknesses, management inefficiencies, and failures in both external and internal audit processes. These sections offer a detailed analysis of the specific shortcomings that contributed to the fraud. The conclusion provides a summary of the case study's findings and emphasizes the need for robust regulations and ethical practices within the auditing profession to prevent similar scandals in the future.
Schlüsselwörter (Keywords)
The main keywords and focus topics of this paper are: corporate scandal, auditing, hedge funds, fraud, Ponzi scheme, board weaknesses, management inefficiencies, external audit, internal audit, regulatory framework, legal implications, ethical considerations.
- Quote paper
- Carol Nganga (Author), 2012, Corporate Scandal and Impact on the Audit Profession, Munich, GRIN Verlag, https://www.grin.com/document/280534
