Task 1: Questions regarding a corporate accounting scandal Businesses listed on the stock exchange are required to make public a set of signed audited financial statements. At the same time, management knows that the better their financial results look, the higher the share price will be and, consequently, the happier the shareholders will be. However, this can lead to conflicts of interest, as was the case with Livent Inc. and their auditors, in the following example describing an ethical issue. Read about it now, and then answer the questions that follow using the online submission tool. Livent and the auditors Livent Inc. was a Toronto, Ontario-based company that produced live theatrical entertainment, generally at one of its own theatres, but also obtained touring engagements, when warranted. They produced established musicals, such as The Phantom of the Opera and Joseph and the Amazing Technicolor Dreamcoat, as well as new productions originated by the company, such as Ragtime, Kiss of the Spider Woman, Sunset Boulevard, and Fosse. Livent owned and operated theatres in Toronto, New York, and Vancouver. The company's revenue was derived from performance revenue, the sale of merchandise, corporate sponsorships, gains on sale of rights and exclusivity arrangements, royalties, concession income, and other related fees. Livent became a public company in Canada in May 1993, and its stock was traded on the Toronto Stock Exchange in Canada and on the NASDAQ national stock exchange in the U.S However, Livent declared bankruptcy on November 18 and 19, 1998, in the United States and Canada, respectively. The Offer of Settlement between the U.S. Securities and Exchange Commission (SEC) and the company lists the following allegations against the company