refer to the auditing in practice feature “PCAOB fines Ernst young for an issue involving accounting estimates” a.

refer to the auditing in practice feature “PCAOB fines Ernst & young for an issue involving accounting estimates”

a. auditors are required to provide reasonable assurances regarding accounting estimates. how did the Ernst & Young partners fail in this regard?

b. based on the facts in the case, it appears that high-level ernst & young partners also were concerned that the financial accounting and disclosure policy for Medicis was improper. yet the partners in the actual Medicis engagement went ahead and issued an unqualified audit report anyway. what factors might have caused the engagement partners to fail to exercise professional skepticism

c. to understand the pressure to maintain the company’s stock price, access yahoo finance or another similar online source for historical stock price. what was the approximate stock price for Medicis from 2005 through 2007?

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