Essay on Week 3 Assignment 1

Submitted By niesha25
Words: 1244
Pages: 5
Open Document
Madoff Securities Case
Taniesha Maxwell
Professor Anthony Matias
Advanced Auditing
October 27, 2014

Overview
Bernie Madoff began his brokerage firm in 1960, and it wasand was known as one of the largest on Wall Street. He started off investing money as a favor for family and friends, all though he was not licensed to do so. Over a period of fifty years, many people grew to know him and described him as one of the masters of the New York Stock Exchange. His firm grew into a very highly profitable securities firm, known as Bernard L. Madoff Investment Securities. It was stated that Madoff’s firm couldan execute trades so quickly and cheaply that it actually paidpay s other brokerage firms a penny a share to execute their customers’ orders, profiting from the spread between bid and asking ed prices that most stocks trade for( (Madoff investment scandal, n.d.) ).. However, unknown too many Bernie Madoff was conducting one of the largest Ponzi schemes in history.
The Main reasons why they did not discover the scheme.

The Madoff investment scandal broke in December 2008, when former NASDAQ Chairman Bernard Madoff admitted that the wealth management arm of his business was a complex Ponzi scheme (Madoff investment scandal, n.d.). Thousands of wealthy clients and middle-class people whose pension funds found their way into Bernie’s investment fund lost all of their life savings. The question that many began to ask was how come The U.S Securities and Exchange Commission (SEC) missed the signs of such a largest fraud operation. Well Tthe SEC receives over 10,000 complaints against brokers annually. The understaffed SEC assigned cases to investigators who had little experience with Ponzi schemes. So Tthey focused on what was more familiar “front running,” which Madoff was not doing (Madoff investment scandal, n.d.). Note that, the SEC made numbers of visits to the Madoff offices. But, because he lied to them on multiple occasions to keep them off track, the SEC had difficulty understanding the complexity of Madoff’s operations. So Tthey made assumptions and took Madoff’s word on many occasions. They failed to evaluate even the most basic custodial statements, which would have easily exposed the fund’s actual value (Collins) (). Even if a sample was conducted of trading history should have raised some red flags. Unfortunately, the upside of such a major scam is to draw attention to standards and enforce investors to be more proactive in the future. A fact tThe SEC gave Madoff the benefit of the doubt due to his impressive track record with NASDAQ and the fact that he assisted the SEC on complex issues.
1. The fundamental audit procedures. As an auditor for a firm that had 10 million dollars invested in Madoff Securities, it would ill be safe to say that I would have nothave not relyrelied on third-party opinions about investments in the Madoff funds. For the simple fact that third parties participated in the profits with commission and finder’s fees. However, as an auditor for a firm I would asked for audit reports. Also, II also would have question want to know why is that the CPA firm that Madoff employed only consisted of one employee and the fact that no real audit was ever performed for his company. Most importantly, as an auditor it is important my first object would have been to trace cash flows through the books. Nevertheless, mMany of the investors in this case wereas very lenient. They trusted Bernie Madoff by letting down their guard and not asking typical due diligence information (Schmit). But can one’s blame them, Madoff himself was well-respected in the community withand his returns seeming impossible to duplicate. Also, with the opinions and supports of the third parties who provide a level of security for investors, they thought frequent due diligence was been conducted. However, these parties failed at noticingto the clues and signs of the Madoff’s scam. It is i’s important that investors
Show More

Related Documents: Essay on Week 3 Assignment 1

Week 3 Assignment 1 Essay

needs are paid for and financed by various payers. The level of current nation health care expenditures sits at about $2.1 trillion. This translates into about $7,026 per person, and 16% of the Gross Domestic Product (GDP) (ajronline.org, 2008, pg. 1). Hospital spending encompasses about 31%, which is above the national health care expenditure average. Physician expenditures account for about 5.9%, which is currently lower than the overall expenditure rate due in great part to the 2% Medicare fee…

Words 1169 - Pages 5

Week 3 Assignment 1 Essay

III. Groups affected by Industrialization A. Middle Class Workers 1. Growth of the middle class expanded and professional employment had increased. 2. Union labor groups defended workers, employers viewed workers as cost of production then regular individuals. B. Lower Class Workers 1. Victims of the industrialization, the assembly line took a lot of the jobs of the workers.…

Words 416 - Pages 2

Week 3 Assignment 1 Essay

Assess Organizational Readiness Chanel N. Oliver Professor Steven Englehart Project Risk Management BUS519 January 25, 2015 Analyze how the Critical Success Factors (CSFs) apply to the facts of the case study. Provide examples to support your analysis. According to Kim Heldman, PMP, critical success factors are those requirements or deliverables that must be completed (and completed satisfactorily) to consider the project a success. Critical success factors…

Words 1823 - Pages 8

Math 104 Week 3 Assignment 1

Week 3 Assignment 1 Linda Rodriguez Dr. George Maruschock Math 104 January 27, 2013 The specific course learning for this paper is to solve problems using concepts from set theory and logic and use technology and information resources to research issues in algebra. The project given to the class uses the game of Guess Your Card. Each player draw three cards. Each card has a number between 1 and 9 on it. The players then place their cards on the heads so that everyone but the players…

Words 877 - Pages 4

Essay about Hrm 599 Week 3 Assignment 1 a Growing Small Business Hrm599 Week 3 Assignment 1 a Growing Small Business

HRM599 HRM 599 Complete Course Week 1 to Week 11 Download Answer here http://workbank247.com/q/hrm599-hrm-599-complete-course-week-1-to-week-11/12273 http://workbank247.com/q/hrm599-hrm-599-complete-course-week-1-to-week-11/12273 http://workbank247.com/q/hrm599-hrm-599-complete-course-week-1-to-week-11/12273 HRM 599 Week 1 Discussion "Discovering HRM Under a New Lens" Please respond to the following: * Think back to the time period when you started your MSHRM program at Strayer. Describe at…

Words 3649 - Pages 15

Essay about Week 3 Assignment 1 04 20 15

Week 3 Assignment 1: Whistleblowing and Sarbanes-Oxley Act Michelle M. Webb Dr. Boneita Campbell LEG500 Law, Ethics, and Corporate Governance April 20, 2015 . Week 3 Assignment 1: Whistleblowing and Sarbanes-Oxley Act Who are Whistleblowers and what do they do? Could you be a Whistleblower? There are several definitions for the term whistleblower. The most accurate and significant definitions to the subject of this paper are the definition given by the Black’s Law Dictionary and the one…

Words 1067 - Pages 5

Bshs 325 Complete Course Essay

Complete Course BSHS 325 Week 1 DQ 1 BSHS 325 Week 1 DQ 2 BSHS 325 Week 1 Individual Assignment Foundation of Human Development Paper BSHS 325 Week 1 Individual Assignment Foundation of Human Development Worksheet BSHS 325 Week 2 DQ 1 BSHS 325 Week 2 DQ 2 BSHS 325 Week 2 Individual Assignment Adoloscent Self Potrait Presentation BSHS 325 Week 2 Individual Assignment Bullying Report BSHS 325 Week 3 DQ 1 BSHS 325 Week 3 DQ 2 BSHS 325 Week 3 Individual Assignment Physical Development in Middle…

Words 1488 - Pages 6

Essay on ECO 100 Week 1 Assignment

of ECO 100 Week 1 Assignment contains: "What is meant by the term 'utility,' and how does it relate to purposeful behavior? General Questions - General General Questions ECO100 Week 1 DQ 1 Marginal Cost Marginal Benefit $5.0 ECO100 Week 2 DQ 2 Private Property ECO100 Week 2 DQ 1 Supply, Demand Equilibrium ECO100 Week 2 DQ 2 Private Property ECO100 Week 2 Assignment What’s Important enough to the People ECO100 Week 3 DQ 1 Corporations ECO100 Week 3 DQ 2 Oligopolies…

Words 477 - Pages 2

GBM 380 Week 1 Individual Essay

380 Week 1 Individual Challenges and Opportunities of Globalization Business - International Business GBM 380 Week 1 Individual Assignment Globalization Paper GBM 380 Week 2 Individual Assignment Business Organizations Paper GBM 380 Week 2 Learning Team Assignment Globalization Trends Paper GBM 380 Week 3 Individual Assignment Culture Paper GBM 380 Week 3 Learning Team Assignment Political and Legal Systems Paper GBM 380 Week 4 Individual Assignment Climate…

Words 475 - Pages 2

BSHS 442 Week 1 Individual Assignment Specific Population and the Advocate Role Paper

This paperwork includes BSHS 442 Week 1 Individual Assignment Specific Population and the Advocate Role Paper General Questions - General General Questions BSHS 442 Week 1 Individual Assignment Specific Population and the Advocate Role Paper BSHS 442 Week 2 Individual Assignment Mediation and Advocacy Literature Review BSHS 442 Week 2 Learning Team Interview with an Advocate BSHS 442 Week 3 Individual Assignment Challenges of Being an Advocate and Neutral Facilitator…

Words 454 - Pages 2