Stanford Financial Group:

R. Allen Stanford, CEO and founder of the Stanford Financial Group was recently convicted and sentenced in a case that was being heard in the U.S. District Court in Houston, TX. Mr. Stanford was, among other charges, accused of issuing fabricated certificates of deposit from a bank he controlled in Antigua. Some 20,000 investors purportedly lost nearly $8 billion dollars.

After doing some researches, answer the following questions:

• What issues would auditors for financial institutions/individuals that invested in Stanford's financial instruments face in verifying the balances on their client's financial statements?
• What would be your recommendation to clients seeking to invest in off-shore banks like Mr. Stanford's?