Read the Ethics Cases listed below and answer the questions associated with each.

Ethics Case 1: Parmalat – Europe’s Enron

Read the Ethics Case, Parmalat – Europe’s Enron, on pp. 405-411 of your text and answer the following questions (approximately one paragraph per answer):

• What audit procedures could have been performed that would have revealed the fraud during an audit? Comment on risk assessment in your response.
• How has the fraud impacted (or will it impact in the future) the two audit firms involved? What punishments were issued to date for all parties involved?
• In your opinion, should bankruptcy projection models be a common tool used by auditors and creditors?

Ethics Case 2: Toyota’s Recall Problems

Read the Ethics Case, Toyota’s Recall Problems, on pp. 531–534 of your text and answer the following questions (approximately one paragraph per answer):

• Did Toyota handle the recall situation ethically? Explain your answer.
• What are some changes you would make to Toyota’s approach to crisis management? Why?
• In 2014, Toyota faced significant sanctions in this case. Summarize those sanctions and comment on whether you believe they were minimal, adequate, or excessive.