1. Case 8.1 Longtop Financial Technologies Limited a. Discuss the ...

  1. Home
  2. Homework Library
  3. Business
  4. Accounting
  5. 1. Case 8.1 Longtop Financial Technologies Limited a. Discuss the ...

QuestionQuestion

1. Case 8.1 Longtop Financial Technologies Limited
a. Discuss the cultural and political factors involved in this case. How did these factors affect the financial reporting and auditing for Longtop?
b. Should major international networks of accounting firms ensure that all national affiliates provide uniform audit services? Explain.
c. Do you believe this situation occurred because of international differences in ethical and moral values? Explain.
2. According to the PCAOB website, in order for their securities to be traded in U.S. capital markets, public companies, whether located in the United States or abroad, must comply with certain U.S. legal requirements, including the requirement to periodically file audited financial statements with the U.S. Securities and Exchange Commission (“SEC”). As required by the Sarbanes-Oxley Act of 2002, the auditor of those financial statements – whether a U.S. auditor or a non-U.S. auditor – must be registered with, and therefore subject to the jurisdiction of, the Public Company Accounting Oversight Board. This includes undergoing regular PCAOB inspections to assess the auditor’s compliance with U.S. law and professional standards in connection with its audits of “issuers,” as defined in the Sarbanes Oxley Act. … Because of the position taken by certain non-U.S. authorities, the PCAOB currently is prevented from inspecting the U.S.-related audit work and practices of PCAOB-registered firms in certain European countries, China, and – to the extent their audit clients have operations in China – Hong Kong.
You may recall from the readings in this and other units, that China has been the source of several frauds and accounting scandals affecting the United States stock markets. Consider the list of issuers whose PCAOB-registered auditors are located in a jurisdiction where obstacles to PCAOB inspections exist – the majority of these are in China and Hong Kong.
(http://pcaobus.org/International/Inspections/Pages/IssuerClientsWithoutAccess.aspx). Looking through that list you will also note that many of these registered firms seem to be Big Fourrelated.
Consider the requirement that Big Four firms in China restructure (http://www.reuters.com/article/2012/05/10/us-china-auditors-idUSBRE84905R20120510).
According to the PCAOB, there appears to be some progress toward audit firm oversight in China. Refer to the MOU with China in the Readings for this unit.
Read this article related to the SEC and Big Four Chinese Affiliates.
http://www.accountingtoday.com/news/auditing/sec-sanctions-big-four-audit-affiliates-in-china73584-1.html

Solution PreviewSolution Preview

These solutions may offer step-by-step problem-solving explanations or good writing examples that include modern styles of formatting and construction of bibliographies out of text citations and references. Students may use these solutions for personal skill-building and practice. Unethical use is strictly forbidden.

1. Longtop Financial Technologies Limited
The cultural and political factors involved
This case highlights a tendency for Chinese companies to falsify data in order to make their firms look bigger than they actually are. Longtop’s officials colluded with officials from major Chinese banks to falsify data related to cash confirmations, and this prevented the discovery of the scheme by Longtop’s auditor....

By purchasing this solution you'll be able to access the following files:
Solution.docx.

$54.00
for this solution

or FREE if you
register a new account!

PayPal, G Pay, ApplePay, Amazon Pay, and all major credit cards accepted.

Find A Tutor

View available Accounting Tutors

Get College Homework Help.

Are you sure you don't want to upload any files?

Fast tutor response requires as much info as possible.

Decision:
Upload a file
Continue without uploading

SUBMIT YOUR HOMEWORK
We couldn't find that subject.
Please select the best match from the list below.

We'll send you an email right away. If it's not in your inbox, check your spam folder.

  • 1
  • 2
  • 3
Live Chats