CASE STUDY 29: Consideration of Fraud in a Financial Statement Audit Charles J. Russo, Ph.D., CPA, CVA, CMA Amber Stone, M.S., CPA Charles L. Martin Jr., DBA, CPA Towson University LEARNING OBJECTIVES After completing and discussing this case, you should be able to - Apply the Fraud Triangle. - Understand the auditor's role in the case. - Evaluate related party transactions. - Understand the Sarbanes Oxley Act, Section 404. INTRODUCTION OF KEY DECISIONS AND DECISION MAKERS INTRODUCTION This case is based on actual fraud and the litigation that followed the discovery of the fraud. The Securities and Exchange Commission (SEC) filed suit against Insignia, Inc. in U.S. District Court in 2011. This court case involves falsified journal entries, misappropriation of assets, securities fraud, violation of the Sarbanes-Oxley Act (SOX), and responsibilities of the independent auditor. The key decisions and key decision makers are outlined below. KEY DECISIONS Falsified Journal Entries CASE STUDY 29: Consideration of Fraud in a Financial Statement Audit Charles J. Russo, Ph.D., CPA, CVA, CMA Amber Stone, M.S., CPA Charles L. Martin Jr., DBA, CPA Towson University LEARNING OBJECTIVES After completing and discussing this case, you should be able to - Apply the Fraud Triangle. - Understand the auditor's role in the case. - Evaluate related party transactions. - Understand the Sarbanes Oxley Act, Section 404. INTRODUCTION OF KEY DECISIONS AND DECISION MAKERS INTRODUCTION This case is based on actual fraud and the litigation that followed the discovery of the fraud. The Securities and Exchange Commission (SEC) filed suit against Insignia, Inc. in U.S. District Court in 2011. This court case involves falsified journal entries, misappropriation of assets, securities fraud, violation of the Sarbanes-Oxley Act (SOX), and responsibilities of the independent auditor. The key decisions and key decision makers are outlined below. KEY DECISIONS Falsified Journal Entries