Professional Documents
Culture Documents
Presented By:
Nama Anggota Kelompok :
1.Mochamad Ridwan Pratama - NPM 1306498626
2.Ferri Ulung Satriya NPM 1306498361
3.Ferdinand Sirait NPM 1306498355
4.Lelo Habibi NPM 1206335205
The BDO Seidman audit team finally arrived at HMIs headquarters during
the latter part of June.
On that first day at the clients office, Tsai received a rude shock from her
old friend.
During a meeting with Tsai, Bergman informed her of the $1.8 million of intransit inventory at year-end.
Another unusual feature of the year-end inventory transfers was that they
had been transported in an HMI vehicle (ussually others company typically
used common carriers, such as United Parcel Service (UPS)).
Warren Fisk, who was scheduled to replace Bornstein as the HMI audit
partner in 1996, told Bergman that the in-transit inventory made him
uncomfortable.
Requested the usual documentation that HMI pepared for all inventory
transfers.
2) Veriffied that the inventory transfer documents were signed by both the shipping
and receiving pharmacists, identified on the documents the pharmaceuticals
reportedly included in the transfers, confirmed that the quantities and per unit
prices of those pharmaceuticals agreed with the information previously provided to
the auditors by HMI management.
3)
Interviewed the truck driver who allegedly tansported the year-end inventory
transfers. Compared his chronology of the relevant events with the inventory
transfer documents and found no inconsistencies.
4) Examined the expense report filed by truck driver and found consistent with his
chronolgy of the relevant events and the chronology of those events provided by
other HMI personnel.
5) Discussed the inventory transfers with HMls controller who provided a credible
explanation for why the transfers were necessary.
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Discussed the inventory transfers with HMIs CFO (Bergman) who indicated that
he had not been able to prevent the transfers because he had not learned of them
until after the fact.
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Result
Similar to the audit opinions issued by the firm in previous years on HMIs
financial statements, the 1995 audit opinion was unqualified.
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In December 1995, Drew Bergman was given a new title at HMI, Corporate
Development Officer.
=>
=>
Jurewicz then took matters into his own hands and informed the
companys legal counsel.
=>
That press release sent HMIs stock price spiraling
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prompted BDO Seidman to withdraw its audit opinion on the companys
=>
Throughout that first trial, Hotte insisted that Bergman had been
responsible for the fraudulent inventory scheme.
The former CEO was sentenced to nine years in federal prison, ordered to
pay a $250,000 fine and to make $9.6 million of restitution to the victims
of the Inventory hoax.
=>
Bergman was also dismissed from the lawsuit after
agreeing to testify
truthfully regarding the HMI inventory fraud and
other relevant events and circumstances during his tenure at HMI.
The class action securities lawsuit filed against BDO Seidman by more
than 4,000 HMI stockholders initially included several defendants, most of
whom were Hotte and Bergmans coconspirators.
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The attorneys for HMIs stockholders claimed that the inventory fraud had
cost their clients approximately $37 million and that BDO Seidman was
responsible for 75 percent of those damages.
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According to the trial transcripts, the two teams paid these expert
witnesses approximately $600,000 in total.
=>
That amount was four times larger than the approximately $140,000
BOO Seidman received for performing the 1995 HMI audit.
The principal objective of the plaintiff attorneys was to convince the jury
that the auditors, at a minimum, had recklessly ignored the auditing
professions technical standards during the 1995 audit and the plaintiff
attorneys repeatedly drew attention to the red flags the auditors had
allegedly overlooked or, at least slighted during the 1995 HMI audit.
=> These red flags included, among other items, the SECs inquiry
regarding HMIs allowance for doubtful accounts, the premature press
release reporting the cormpanys 1995 earnings, the allegations included
in the anonymous letter that BDO Seidman received before the beginning
of the 1995 audit, and the suspicious circurmstances surrounding the intransit inventory at year-end.
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Question 1
Answer
SA 100.4 :
Setiap Praktisi wajib mematuhi prinsip dasar etika profesi di bawah ini:
- Prinsip integritas
- Prinsip objektivitas.
- Prinsip kompetensi serta sikap kecermatan dan kehati-hatian
profesional (professional competence and due care).
- Prinsip kerahasiaan.
- Prinsip perilaku profesional.
SA 100.10
Kepatuhan pada prinsip dasar etika profesi dapat terancam oleh
berbagai situasi. Ancaman tersebut dapat diklasifikasikan sebagai
berikut:
Question 2
According to court testimony on July 20, 1955,
Drew Bregman recommended to HMIs
board of directors that Mei-ya-Tsai be hired
as the companys chief of accounting. One
week later, BDO Seidman issued its audit
report on HMIs 1995 financial statements.
Under presently existing profesional
standards would this situation have
presented an indepence problem for BDO
seidman? Defend your answer
Answer
SA 100.4 :
Setiap Praktisi wajib mematuhi prinsip dasar etika profesi di bawah
ini:
- Prinsip integritas
- Prinsip objektivitas.
- Prinsip kompetensi serta sikap kecermatan dan kehati-hatian
profesional (professional competence and due care).
- Prinsip kerahasiaan.
- Prinsip perilaku profesional.
SA 100.10
Kepatuhan pada prinsip dasar etika profesi dapat terancam oleh
berbagai situasi. Ancaman tersebut dapat diklasifikasikan sebagai
berikut: