1. What do you think the Motive, Rationale, and Opportunity were that led to the financial reporting fraud committed by Nextcard management? (Chapter 6)

2. What is the auditors' responsibility regarding detecting and reporting fraud? (Chapter 6)

3. Identify and briefly describe 3 specific fraud risk factors (FRFs) present during the 2000 Nextcard audit. See the AU_C 240.A75 Fraud Risk Factors document in this folder in Blackboard. Use the exact FRF title wording from AU_C240.A75 and provide comments from the case about how the FRF applies to the case.

4. How does the existence of FRF's change the nature, extent, and timing of work the auditor would do? (See content in Chapter 4) What are the primary objectives an audit team hopes to accomplish by preparing a proper set of audit work papers? (See content in Chapter 3)

5. Identify 3 fundamental audit principle violations that the E&Y auditors committed in this case that might have contributed to not identifying this fraud. (See content in Chapter 2)

6. Assume the role of Oliver Flanagan in this case. What would you have done when Thomas Trauger asked you to help him alter the 2000 NextCard audit workpapers?