Numerous news and articles reported the frauds that were committed by Bernard Madoff. One of such frauds has been the operation of $50 billion scheme, named Ponzi scheme, which was one of the major frauds that took place in the history. Madoff stated that it had been his fault that he paid the investors the money which was not at all real. It was found that approximately 50 percent of its customers invested in hedge funds, while other customers consisted of banks along with the wealthy customers. In the website of the company, it focused upon the “high ethical standards” of the firm (Glovin & Scheer, 2008).
The auditors of Madoff were accused by the Securities and Exchange Commission (SEC) of committing frauds in securities. They fallaciously demonstrated that they had conducted the audits legitimately while the fact was that they had not. It was stated by SEC that it was Friehling that helped in the smooth operation of the Madoff Ponzi plan. He falsely stated in the yearly audit reports that F&H ‘(David G. Friehling, CPA and his firm, Friehling & Horowitz, CPAs, P.C.)’, has checked the financial statements of BMIS according to the Generally Accepted Auditing Standards (GAAS). Further, the auditors of Madoff were accused of attaining ill-received benefits via returns from Madoff as well as BMIS. They were also accused of taking out the returns in the names of Friehling along with his members of the family from BMIS accounts (LaRocco, 2010). ...Show more