Knapp Nextcard Case

Case 5.8 NextCard, Inc. 1.Should meeters evaluate the soundness of a clients commerce influence? Defend your answer. Auditors should not evaluate the soundness of a clients product line model. They are not required to have knowledge and expertise to start and contain a successful barter. A business model is usually evaluated by a bank or other financial institution that the troupe acquires capital from. An hearer is required to uphold integrity and has a responsibility to the stockholders to nourish competence and independence. All of this must be achieved while examining sufficient, disposed(p) turn out to obtain reasonable assurance as to the cloth fairness of the clients financial statements. This evidence supports what has happened thus far in the clients business. A business model is a prediction of what is pass conception for the business by optimistic, biased focussing, not what has happened in the past. An analyzeors determination does not includ e predicting the start-up future of a business, nor to rule semen out of the closet put-on. 2.Identify and briefly describe the specific fraud take chances factors present during the 2000 NextCard audit. How should these factors have affected the planning and action of that engagement? There were many risk factors present during the 2000 NextCard audit: unusually rapid growth and profitability, significant related-party transactions, poor or change state financial terminal figure when management guarantees debt, and management uses aggressive story measures to boost stock price. NextCard, corporate respectively demonstrated these risks as: extending $1 billion of assign to its customers with an average balance of $2000, executives sold-off bountiful portions of their ownership interests in the company before the financial condition became apparent, in 1999 the company produced a expiration of $77.2 billion followed by a $81.9 billion loss in 2000 and NextCards executive chose to screen the companys fina! ncial problems, and the management materially...If you indispensability to get a broad essay, order it on our website: OrderCustomPaper.com

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