According to International Standards for the Professional …show more content…
Those provisions would have deterred the actions of Scott Sullivan, CFO at WorldCom because they notify upper management about the significance of the financial reporting process.
Sullivan capitalized the network lease, which was wrong. According to ASC 840, the network lease must be treated as the operating lease. In reaction to this mistaken action, Cynthia evaluated a fraud risk depending on AUC 240 and AS 12, and then she found out evidence that endorsed her professional skepticism as requirements of AUC 610.
Finally, the regulation, other legal reforms, and teaching about moral and ethical values conducted in school, at home, or through other avenues outside legislation are significant to preventing and deterring financial reporting fraud and other unethical