Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The L.L. Braddord & Company, LLC did perform risk assessment for the client WebXU. Why the engagement still turned out to be found SSESSING THE

image text in transcribed
image text in transcribed
The L.L. Braddord & Company, LLC did perform risk assessment for the client WebXU. Why the engagement still turned out to be found SSESSING THE K OF MATERIAL RISK O ISSTATEMENT MISST is the Big Deal About Risk? What's the Bi e over the past decades, com With the explosion of the bunched to market pre LEARNI vertising a of the Internet over the past decade, new advertising approaches have been products and services to consumers. A Caloria based company Web , a performance media company generating revenues from advertisers in sales leads from engaged consumers. Advertisers bid in a real-time on dor cost-per-auction basis for access to consumers expressing interest in a verged in 2010 as a performance media.consumers. A After bet 9-11 9-2 rested in finding sa of a cost perleado particular product On December 5, 2011 LLC, was engaged to a 2011, the Las Vegas-based accounting firm of LL Bradford & Company to audit WebXU's financial statements for the year ended December 31, YOUR An HERE CLOUD il WebXU filed its 2011 an- francial statements with CATION Securities and Exchange Comission (SEC) on April 2012. which included LL Anford & Company's opinion der WebXU's financial state- ments were presented fairly, in material respects, in accor- dance with U.S. GAAP. Three stort years later, the SEC re- oked the registration of the securities of WebXU, an action prompted by WebXU's failure file any periodic reports with the SEC since it had filed its Form 10-K for the year ended December 31, 2012 The PCAOB alleged that the partner had failed to properly assess the risk of material misstate- ment with respect to WebXU'S 201 financial statements and had failed to develop an audit pin that included planned risk assessment procedures and responses to the risk of material mistatement. According to the PCAOB, the firm's "risk assessment was performed at a level pregation above that permitted by PCAOB standards. For eample, the auditor assessed We risk on all assets and all liabilities collectively. "As a result, cash carried the same risk as- sediment as goodwill." At the time, goodwill recorded in connection with a recent acquisition gest item on WebXU's balance sheet and constituted nearly two-thirds of reported Less than nine months later WebXU wrote off the full value of that goodwill was the largest item on WebXo assets. Less than nine months later, Disciplinary proceedings mposed sanctions that cen and also prevented him from dition to the one-year suspe or supervise another perso Grone additional year. ary proceedings issued by the PCAOB in April 2015 against the engagement partner Lions that censured and suspended him for one year from the date of the order ted him from being an associated person with a PCAOB-registered firm. In ad- year suspension, the engagement partner was also ordered to not serve as her person in the role of engagement partner or engagement quality reviewer 1 2015 (pcaobus.org): 2. SEC Release N

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Problems In Portfolio Theory And The Fundamentals Of Financial Decision Making

Authors: Leonard C Maclean, William T Ziemba

1st Edition

9814749931, 978-9814749930

More Books

Students also viewed these Finance questions