Livent, Inc. is a company that is very involved in the entertainment business, mainly in live theatrical productions. When dealing with a company in the entertainment industry, there are many risks that can be involved in auditing situations. A big risk that can be common is working with the higher officers of the company who are not strongly educated in the financial field. They are only familiar with the entertainment part of it and do not pay attention to a lot of the finances. It is common for the board and higher management in the entertainment field to only worry about the amount of talent provided in their product and the amount of people that are in the seats.
They do not know and commonly do not want to know how much it costs because it is not on their priority list. Their main goal is to put the best actor and actress on the stage and put as many people in the seats as possible. A risk that was common in Livent was their ability to take costs for one show and moving some of it to another show for the future or in the past that had been more successful. Auditing for live theatrical performances is a little different than a typical audit. The auditors have to look at so many different costs, investments, revenue from multiple shows and periods, and much more. A possible strategy is auditing the company without much communication between the auditing client and the CEO or other top officers of the company.
The responsibilities of a CFO and an audit partner are similar and different. The CFO is a highly ranked officer of a company who oversees the spending habits of a company and all of its financial reports, activities, and situations. The CFO makes sure that the assets spent are spent wisely and should be spent for the right reasons. They want to be sure it used for the growth and benefit of the company. An audit partner is usually a third party person that a company chooses from an externally client, to come in and review all the accounting practices of the company. The audit partner will study the financial records and notify the company of any adjustments that should be made.
The Essay on The Walt Disney Company: The Entertainment King 5
The Walt Disney Company is based in Burbank, California with a geographic scope as sales are generated internationally. Their main competitors include 21st Century Fox, and Time Warner who also compete in the media industry, producing television programs, films and videos. Disney had a net profit margin of 15.41%, which is higher then the industry at 12.78% and a ROE of 16.61% compared to the ...
The audit partner is there to see that the company is reporting numbers correctly, legally, and ethically. They are similar because they both oversea the finances of a company. The auditor just makes sure that the CFO is approving the financial activities that he should approve. Personally, I would rather be the CFO of a company. It is a lot of responsibility but as long as you keep your company profitable while following rules and laws then you shouldn’t be in trouble. The CFO is also much more important because you oversea many people and you have to make sure that they are following rules as well. An auditor is important but if a company is doing everything legal and their numbers are correct, how important are they?
Corporate executives may consider their auditors to be evil because an auditor may tell them a lot of bad news, from their numbers is off, you are doing stuff illegally, and much more negatives. An auditor is usually the one to find what the company is doing wrong whether they know it or don’t know it. I don’t feel that auditors are the ones who can change the perspective of how corporate executives feel about them. The only way this will change is if companies start reporting correctly and legally. So, it is up the company to change their own mind because the ones who feel the auditors are evil are usually the ones doing the evil acts.
Another accounting firm is retained when an auditor-client conflict arises during an audit engagement. This happens mainly to get a professional opinion from a non-biased opinion. They are brought in to find a possible solution or find who is in the wrong and right or the situation. They are to write a report stating the facts and an audit report of the company as well. The non-bias report is extremely important when solving the dispute.
The Essay on Livent – When Maria…When?
Livent, a successful live entertainment company, known for performances of Phantom of the Opera, Ragtime, and Sunset Boulevard, was sold in 1998 to buyers that found the value the paid for the company was an illusion. Livent’s chief financial officer, Maria Messina, who joined Livent in 1996 after serving as its auditor at Deloitte & Touche, had been immersed in what the Securities & ...
I feel that Deloitte should have let them report the $12.5 million transaction in the third quarter. There is a reason two third parties reviewed the report and both allowed Livent to follow through with the third quarter report. Depending on how they reported other large transactions, then that’s how they should report this one as well.
She felt that she had ties to both Livent and Deloitte, and these ties would be hurt either way if she reported wrong doings in the accounting practices or the auditors. No matter what she felt she was guilt because she knew about it on the Livent side and she knew what was going wrong on the Deloitte side of the battle. Either way she looked, she felt that she had some bit of responsibility for reporting the fraud for Livent and for Deloitte. After discovering the fraudulent schemes, you obviously have to report them and change the ways of the how they are practicing fraud. Clearly she knew there was fraudulent activities taking place and she could have done a lot more to help solve the situations and clear it up.
There are now standards that apply to the auditing and the investigations performed by accounting firms regarding due diligence. It is required that auditors know about the company that there are auditing for. It is also a standard that the CEO and CFO have an understanding and approve of the financial statements reported by the company. Auditors must be independent from the company that they are auditing, unlike Livent and Deloitte where Maria Messina had ties into both companies. The Surbanes-Oxley Act was a key role in the standards that apply.
