Madoff’s Ponzi scheme all started when his main concern was to befriend and stay close to the wealthy individuals who lived in Palm Beach, Florida and New York City, New York. After having them signed as investors to his company, he would pay them very handsome returns and in gaining their trust, they would give him extremely positive feedback, which would eventually attract more investors. In addition, Madoff would capitalize on his business having this foresight of exclusivity. His promise ...
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...Not only that but they give whistleblowers an incentive to rattle out the crook in question. Even though many blame the SEC for being understaffed and underfunded, and JP Morgan Chase for not questioning Madoff’s returns, there’s still one more responsible party, and that’s the auditing firm. The auditing firm in question was Friehling & Horowitz, CPAs, P.C. (F&H). According to the SEC, Friehling & Horowitz would claim to be auditing financial statements and disclosures of Bernard Madoff Investment Securities (BMIS). An auditor’s primary responsibility is to plan and perform an audit in order to have assurance that the financial statements are free of error and are answered truthfully and not in pursuance of fraud. The auditor’s choice to commit securities fraud with the help of a multi-billion dollar Ponzi scheme was not a choice of ethics but rather one of greed.
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