Ethics in Accounting Read Case Study 5-10: Groupon in Chapter 5

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Read Case Study 5-10: Groupon in Chapter 5, page 333 of your text. (Case study attached as a scanned document)

In two to three pages, supported by evidence from your text and from other research (at least one resource is required), answer the following questions:

  1. What is the responsibility of management and the auditor with respect to the internal controls of a client?
  2. Groupon disclosed a “material weakness” in its internal controls saying that it had failed to set aside enough money to cover customer refunds. Do you believe the company engaged in fraud with respect to customer refunds? Why or why not?
  3. Groupon blamed EY for the admission of the internal control failure to spot the material weakness. Do you agree that EY should have spotted the internal control weakness earlier and taken appropriate action? Include in your response the role that risk assessment should have played in EY’s actions.
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