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How Did Cardillo's Outside Auditors And Evaluate The Level Of Internal Compliance?

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How Did Cardillo's Outside Auditors And Evaluate The Level Of Internal Compliance?
Cardillo Travel System, Inc.
Assignment II
February 22, 2015
Diane Phillips
Instructor: Dr. Bunney Schmidt

Cardillo Travel System Inc. In the case study of Cardillo Travel System, Inc. I will examine the violations the Securities and Exchange Commission’s has charge Cardillo Travel System. Determine who was in violation of the AICPA’s code of Professional Conduct and analyze the key reasons why they were not in compliance. Analyze the action Cardillo’s outside auditors and evaluate the level of efficiency of the audit risk management, and determine if the components of internal control were being followed correctly. Cardillo Travel System, Inc., the fourth largest company in Travel companies was founded in 1935 and …show more content…
Because this was not the case, Rognlien would move a step further and sell 100,000 shares in the stock market without the release of this material information. Insider trading is a business terminology which explains the trading of a company’s securities done by individuals who have access to information which is not in the public domain. This act has been practiced by Rognlien who sold 100,000 stock of the company’s stake when he realized that the company was not doing well. This information was not shared with the public and thus volatile investors could have fell victim to this unscrupulous act.
AICPA’s Code of Professional Conduct
In the above case those who were in compliance with the AICPA’s professional conduct included the following individual:
Russell Smith, refused to sign the affidavit that Rognlien was pressuring him to sign since it was against the financial reporting provisions of recognizing …show more content…
Managerial decisions constantly affect the third parties who are the creditors and investor and hence the auditors have a duty to safeguard and protect them from misleading statements by the management. A lot of value is placed by the public on the independent financial statements since it enhances the degree of confidence to the third parties. Currently the financial reporting seeks to address more relevant information to the end user. Therefore there is more judgment that is put on them and increased subjectivity involved in management’s accounting. It is evident the end users of the financial statements need to be protected from deceit and extortion that may be as a result of management decisions which may be scrupulous and
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