Lehman Brothers Case Study

The author of this report is asked to answer to several case study questions related to the collapse of Lehman Brothers and what led up to it. The first question asks about Lehman Brothers' Repo 105 policy and what, if any, policy Ernst and Young (its auditor) had at that point to develop the accounting policy and process as well as monitor Lehman's usage and compliance of the same after the fact. The author is then asked to answer to whether there can be agreement with the comment "intent doesn't matter" as it applies to accounting rules. The third question asks whether the auditors have a responsibility to determine whether important transactions of a client are "accounting motivated" and the author is asked to defend any response given. Finally, the author is asked to analyze Lehman's net leverage ratio as related to the fact that the...
[ View Full Essay]