TITLE : CASE STUDY ANDROIDS UNDER ATTACK

1) EXECUTIVE SUMMARY The case study is about Androids is under attack as it was already in the news, and what made Androids a tastier target was the fact that Enronaa was not the first time. Its start from they had used accounting practices that allowed Enronaa to hide its debts, but really these are all within the context of fair value accounting. Androids was critics that the auditors were incompetent, at worse, they deliberately overlooked irregularities at Enronaa in order not to lose the lucrative stream of consulting and other work it provided. Androids also had prior entanglements with the Securities and Exchange Commission (SEC). Androids agreed to pay the SEC a civil penalty of USD 7 million to settle charges related to the firm’s work as auditors of Solid Waste. This issue is the US SEC found Androids guilty of issuing materially false and misleading audit reports on Solid Waste financial statements for the period 1993 through 1996.
Then, Androids also issued an audit report on Solid Waste’s financial statements in which it stated that the company’s financial statements were presented fairly, in all material respects, in conformity with generally accepted accounting principles (GAAP) and that Androids had conducted its audit of those financial statement in accordance with generally accepted auditing standard (GAAS). So, SEC found that Androids’ representations were materially false and misleading. While, Solid Waste’s financial statements were not presented fairly, in all material respects, in conformity with GAAP. Androids had allowed the management of Solid Waste to use improper accounting to inflate its operating income and other measures of success. It was the largest restatement of results in the history of the SEC. Besides that, SEC found Androids failed to ensure that all known misstatements were