Auditing Cases 6th Edition by Mark Beasley,Frank Buckless,Steven Glover,Douglas Prawitt

Exercise 8

The SEC outlines in Accounting and Auditing Enforcement Release No. 2234 five "undertakings" for KPMG to alter or amend its audit practices. Obtain and read a copy of the enforcement release (try http://www.sec.gov/litigation/admin/34-51574.pdf) and read the five "undertakings." Based on your reading of the five "undertakings," which elements of a system of quality control did KPMG have weaknesses Explain your answer.