Reference no: EM13853021
Lehman on the Brink of Bankruptcy: A Case about Aggressive Application of Accounting Standards
Dennis H. Caplan, Saurav K. Dutta, and David J. Marcinko4.
1. Review the financial data and ratios presented in Exhibit 1 for Lehman, three other financial institutions, and three other prominent companies. Analyze trends at Lehman over time. Compare Lehman to the other financial institutions. Compare the financial institutions as a group to the leading firms in other industries.
2. Lehman's senior management, internal auditors, and external auditors were alerted to the use of Repo 105 transactions by a whistleblower. The resulting investigation does not appear to have led to a serious reconsideration of the appropriateness of Lehman's accounting for these transactions. What corporate governance measures can be instituted to help prevent the issuance of misleading financial statements?
3. As noted in the New York Attorney General's Complaint against E&Y (paragraphs 43-44, p. 19), an E&Y auditor asked his senior manager about the potential impact that Lehman's Repo 105 activity could have on its reputational risk. The auditor asked whether the audit team was comparing Lehman's Repo 105 activity to Lehman's competitors, or referring to any industry publications or regulatory guidance. The auditor's concerns stemmed from E&Ys "balanced audit approach," which requires E&Y to obtain some level of understanding of the business and the industry of its audit client. Why should industry practices and competitors' actions affect audit procedures and auditor judgments?
Attachment:- Lehman Case.pdf
|
Two very different products
: TASK: Think of two very different products, one not so expensive product that you buy often - e..g. chocolate or milk or bread etc. Another product that is expensive and not bought very often - e.g. car or phone or furniture etc. Answer the questions..
|
|
Describe a foot-in-the-door or door-in-the-face strategy
: Create and describe a foot-in-the-door or door-in-the-face strategy that can facilitate a positive behavior toward a disliked group. After you identify the group and the target behavior, explain whom you would try to change and what steps would be..
|
|
Draw the supply and demand diagram
: Suppose there is a minimum quantity of calories per day that a consumer absolutely needs to survive and live an autonomous life. Suppose further that the current equilibrium in the calories market is such that the quantity is less than this minimu..
|
|
What dilemma does the sales representative face
: What dilemma does the sales representative face - who are the potential stakeholders and how might they be affected by the decision of the sales representative?
|
|
Analyze trends at lehman over time
: Three other financial institutions, and three other prominent companies. Analyze trends at Lehman over time. Compare Lehman to the other financial institutions. Compare the financial institutions as a group to the leading firms in other industries..
|
|
What subsequently happened to the prices
: Groupon (GRPN) wen public a $20 a share and closed the first day at $26.11. Zynga (ZNGA) went public at $10 a share but closed the first day at $9.50. Facebook (FB) trading below $28 within two weeks for a 26.3 percent decline from the IPO offer pric..
|
|
How do you effectively conduct strategic sourcing
: How do you effectively conduct strategic sourcing? How do you effectively conduct strategic cost management and supply chain analysis?
|
|
Opened an investment account
: Two years ago, you opened an investment account and deposited $21,000. One year ago, you added another $3,600 to the account. Today, you are making a final deposit of $15,500. How much will you have in this account 3 years from today if you earn a 15..
|
|
Discuss the importance of historical events
: Discuss the importance of historical events and initiatives and their influence on global health issues in order to understand current and anticipate future health care trends based on changing demographic trends, emerging technologies, and diseas..
|