Grant Thornton, Llp Is The Accounting Firm That Was Hired

Grant Thornton, LLP is the accounting firm that was hired by the First National Bank of Keystone to complete an outside audit. After being found negligent in their performance of the Keystone Audit, Thornton appealed the final decision and order from the Comptroller of the Currency that required the firm to pay $300,000 in civil penalties for reckless failure to meet the Generally Accepted Auditing Standards (GAAS). Grant Thornton also appealed the Comptroller s cease and desist order that mandated that the firm would need to comply with several principles whenever they audit depository institutions. Keystone was initially a small community bank that provided banking services to clients primarily located within the McDowell County in†¦show more content†¦It is because of Keystone’s poor management quality, overall condition, and questionable bank statements that the OCC required the bank to enter into a formal agreement that included retaining a nationally recognized independent accounting firm. When Grant Thornton was contracted in 1998 to carry out an external audit, Thornton knew that the bank had significant accounting problems and was aware that the federal regulatory authorities were skeptical of the bank. In 1999, the accounting firm gave a favorable impression of the bank’s income statements for 1997-1998 and several months later the OCC discovered that the bank committed fraud and was insolvent. This resulted in the closure of the bank. II. Holding Grant Thornton should be held liable for its reckless negligence because it ultimately prolonged Keystone bank’s ability to continue to partake in fraudulent activities. If the accounting firm would have held itself to GAAS, generally accepted as the minimum standard of professional conduct in performing an audit, Thornton would have known to exercise â€Å"heightened skepticism† during this high risk of fraud. Secondly, GAAS required written confirmations from third parties servicing assets in regards to a bank’s balance sheet. Not only did Thornton fail to obtain this written requirement, it also recklessly relied on an oral statement. GAAS also required in a high risk audit that monthly remittances of interest income on assets being serviced byShow MoreRelatedAssisted Living Concepts Inc. Essay2212 Words   |  9 PagesAssisted Living Concepts Inc., hereafter referred to as ALC, was a Nevada corporation formed in 1994 with its principal place of business in M enomonee Falls, Wisconsin. ALC provides senior assisted living residences that provide multiple personal services for their residences. ALC was purchased by Extendicare Health Services, Inc. in January 2005. In 2006 ALC was spun off from Extendicare as a publicly traded company. As of December 31, 2012 ALC had 211 assisted and independent living residencesRead MoreAccounting 1-4 Chapter100452 Words   |  402 Pagesthis chapter, you should be able to: 1 Describe the primary forms of business organization. 2 Identify the users and uses of accounting information. 3 Explain the three principal types of business activity. 4 Describe the content and purpose of each of the financial statements. 5 Explain the meaning of assets, liabilities, and stockholders’ equity, and state the basic accounting equation. 6 Describe the components that supplement the financial statements in an annual report. ââ€"  ââ€"  ââ€"  ââ€"  ââ€"  ââ€"  ââ€"  2 Read MoreManagement Course: Mba−10 General Management215330 Words   |  862 PagesContemporary Management, Fourth Edition Jones−George Driving Shareholder Value Morin−Jarrell Leadership, Fifth Edition Hughes−Ginnett−Curphy The Art of M A: Merger/Acquisitions/Buyout Guide, Third Edition Reed−Lajoux and others . . . This book was printed on recycled paper. Management http://www.mhhe.com/primis/online/ Copyright  ©2005 by The McGraw−Hill Companies, Inc. All rights reserved. Printed in the United States of America. Except as permitted under the United States Copyright Act ofRead MoreStephen P. Robbins Timothy A. Judge (2011) Organizational Behaviour 15th Edition New Jersey: Prentice Hall393164 Words   |  1573 PagesSaddle River, New Jersey 07458, or you may fax your request to 201-236-3290. Many of the designations by manufacturers and sellers to distinguish their products are claimed as trademarks. Where those designations appear in this book, and the publisher was aware of a trademark claim, the designations have been printed in initial caps or all caps. Library of Congress Cataloging-in-Publication Data Robbins, Stephen P. Organizational behavior / Stephen P. Robbins, Timothy A. Judge. — 15th ed. p. cm. Includes