Does it matter that Friehling did no audit work?
Yes, it matters that Friehling didn’t do any audit work. It matters because he signed off on financial statements verifying that he had. He played a great part in Madoff’s misconduct by falsely representing to investors that Madoff’s company was financially sound when in fact he hadn’t done a single audit. It without a doubt certainly matters that Friehling didn’t audit any of Madoff financial statements. Friehling didn’t do a single audit although he signed off on books verifying that he had. It matters because he signed off on financial statements He He didn’t uphold his oath as a CPA in which he solemnly swear to
From 1991-2008, Friehling & Horowitz, a little-known accounting firm in New City, New York, signed off on audits on Bernard L. Madoff Investment Securities LLC's books, New City being a small hamlet in the Rockland County suburbs north of New York City. Friehling falsely represented to investors and the Securities and Exchange Commission that he and the firm had conducted audits, and the Madoff firm was financially sound. In the meantime, Friehling and his family withdrew millions of dollars from accounts at the Madoff firm, over $5.5 million since 2000
A financial audit, or more accurately, an audit of financial statements, is the verification of the financial statements of a legal entity, with a view to express an audit opinion. The audit opinion is intended to provide reasonable assurance, but not absolute assurance, that the financial statements are presented fairly, in all material respects, and/or give a true and fair view in accordance with the financial reporting framework. The purpose of an audit is provide an objective independent examination of the financial statements, which increases the value and credibility of the financial statements produced by management, thus increase user confidence in the financial statement, reduce investor risk and consequently reduce the cost...
Please join StudyMode to read the full document