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Bernard Madoff Investment Securities LLC was the source of the largest financial fraud in US history. Madoff perpetrated a simple Ponzi scheme whereby older investors were paid with newer investor funds, thus providing the impression of actual investment returns. The extent of the losses related to Madoff’s Ponzi scheme has been estimated at $50 – $65 billion. Many are astounded to hear that Bernard Madoff Investment Securities LLC was audited by a CPA. Unfortunately, Madoff’s CPA apparently did not subscribe to the AICPA Code of Conduct as most of the rules contained in the code were ignored. What follows is a case study examining the conduct of Friehling & Horowitz CPA’s P.C., the CPA firm that audited Bernard Madoff Investment Securities LLC, within the context of the AICPA Code of Professional Conduct.

Topics covered:

  • Madoff - Ponzi Scheme
  • SEC Complaint
  • AICPA Code of Conduct
  • Joint Ethics Enforcement Program

Review Questions and Final Exam are completed under section "Review and Test".

Learning Objectives

  • Recognize professional conduct expected of a certified public accountant and consequences of misconduct under AICPA guidelines.
  • Recognize key components of the AICPA Code of Professional Conduct with regard to independence.
  • Recognize the AICPA Code of Professional Conduct rules on confidential information and acts discreditable.
  • Identify ethical safeguards as outlined by the AICPA.
  • Recognize the AICPA Joint Ethics Enforcement Program and its disciplinary actions.
Last updated/reviewed: June 8, 2021

12 Reviews (33 ratings)Reviews

5
Anonymous Author
I really liked this review. Ethics courses are much easier to review with powerful examples just as the Bernie Madoff case, which had such a big impact in our life, economy and culture. The course takes the Madoff case and explains all the ethical misconducts in detail. Well done!
5
Member's Profile
This was well done and interesting. It kept my attention and clearly explained the role and failures of the Madoff auditors. I hadn’t given much thought to the ancillary players who aided the fraud.
5
Anonymous Author
Not only was this very interesting, but a nearly point by point example of how the involved CPA and his firm violated nearly every rule of ethics for CPAs.
4
Anonymous Author
This course provides an understanding of the AICPA Code of Conduct and what constitutes a non-compliance with the AICPA Code of Conduct.
4
Member's Profile
interesting to learn more about the Madoff case; good way to introduce some of the regulations (which could be dry otherwise)
5
Member's Profile
A well-known case. I was very informative to see the analysis of this case in relation to the AICPA Code of condact.
5
Anonymous Author
Good overview and it was interesting to intertwine Madoff's case in this to keep the material relevant.
4
Anonymous Author
Liked breakdown of the case but contained too much verbatim from the code of conduct
4
Anonymous Author
course was easy to follow and more interesting way to understand the subject matter
4
Member's Profile
Well-written and full of links to documentation for further study.
4
Anonymous Author
A lot of information that goes far past the Madoff case.
5
Anonymous Author
Interesting case study describing a high profile case

Prerequisites

Course Complexity: Intermediate

No advanced preparation or prerequisites are required for this course.

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
Course Materials
  PDFBernard Madoff Investment Securities' Auditor
Review and Test
  quizREVIEW QUESTIONS
 examFINAL EXAM