Summarize key points of this case in a paragraph.

I need an explanation for this Accounting question to help me study.

Summarize key points of this case in a paragraph.

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Specifically include the following points in your summary (and any other you think pertinent):

  • What questions would you have of the BKD audit team…what questions should it have been asking about Celadon over the course of the audit years in question?
  • How is the reputation of Franklin College impact by these events? Is Prescience Point Investment Groups characterization of Celadon hiring practices as ‘bizarre’ justified? What issues should Franklin address in restoring its public image?
  • What market conditions would you look for to justify a nearly 1,500% increase in tractors in the Truck Leasing Division? What impact would these additions have on a. Financial Statements overall, b. Existing Loan Covenants?
  • What questions would you have concerning the decision to lease such a large volume of equipment with known service issues? Does this in itself raise Red Flags? Why?
  • How do you feel about the Swap arrangement made with Stoops Freightliner? Should the auditors have been interested in Stoops? Should government prosecutors be interested?
  • How precisely were losses masked in the Swap arrangement with Stoops?
  • Would a letter from management stating that the above Swaps valuations were ‘arms-length’ satisfy you as an auditor? If you were the auditor on this case how might your career be in jepordy?

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