Auditing - Madoff Securities Research Paper Example | Topics and Well Written Essays - 1250 words

Auditing - Madoff Securities - Research wallpaper ExampleBernard Madoff had been able to dupe thousands of investors across the world through the famous Ponzi scheme (The Wall street Journal, 2009). The company had been keeping its investment strategies secrets for years which already hinted at the fact that there is something significantly rail at going on behind the closed doors of Madoff Securities in the Wall Street. A proper investigation of how a company can give such abnormally high returns to its investors for years may have heart-to-heart the Ponzi scheme earlier. One of the main reasons why the Ponzi scheme had not been detected from external sources is that the high returns from the pecuniary schemes offered by Madoff Securities incited greed among the general people which often made them invest blindly in these schemes. Also, the charge on the part of the regulators of the capital markets added to the factor of Ponzi scheme going undetected for years.For a dissolu te which has invested in Madoff Securities, the materiality of the investments made by the company in Madoff Securities should be evaluated and established by the auditors of the investing firm. Also, the temperament and amount of transactions should have been evaluated carefully. There would be associated risks of the possibility of material misstatement of the company being inform in the consolidated financial statements and the financial reports of the company. The auditors should also evaluate the risk assessment capabilities of the investing firm and take steps to detect any fraudulent reporting of the investing company in their financial reports caused by the investments in Madoff Securities. The key audit procedures included in the Audit Sections should be followed in this case. These would include a calculation of the fair value of the investments, performance of analytical procedures, inspection of the supporting documentations done for resultant settlement or realizati on of the investments