CPA firm involved

The Deloitte engagement team's failure to object to these particular misstatements permitted
Adelphia to engage in certain accounting practices that departed from generally accepted
accounting principles

Accordingly, Deloitte caused Adelphia's violations. The commission also filed a complaint in federal
district court arguing that Deloitte failed to use auditing procedures designed to detect illegal
practices like Adelphia's.

The Securities and Exchange Commission announced the administrative action against auditors
Gregory Dearlove and William Caswell for alleged improper professional conduct.

Deloitte settled both the agency's order and court action for $25 million each without admitting or
denying the charges. Both amounts will be paid into a fund to compensate victims of Adelphia's
fraud.

This case raises a larger issue facing the auditing profession. For the CPA, the most significant
challenge is the early detection of fraud, particularly when the client, its management and others
collude specifically to deceive a company's external auditors.

Deloitte & Touche LLP has agreed to pay $50 million to settle charges stemming from its audit of
Adelphia Communications Corporation's fiscal year 2000 financial statements. The Commission
issued an Order that finds that Deloitte engaged in improper professional conduct and caused
Adelphia's violations of the recordkeeping provisions of the securities laws because it failed to
detect a massive fraud perpetrated by Adelphia and certain members of the Rigas family. In
addition, the Commission filed a federal district court action alleging that Deloitte failed to
implement audit procedures designed to detect the illegal acts at Adelphia. The $50 million
payment will be deposited into a fund established to compensate victims.

Adelphia was sold to Time Warner and Scandal. So, we suggest to do everything by rules, morally,
and ethically, in order to regain public trust. Especially in financial reporting.

For Deloitte & Touche,

Because for the CPA firms, the most significant challenge is the early detection of fraud,
particularly when the client, its management and others collude specifically to deceive a
company's external auditors.
The Rigas family was entrusted with investment funds that they knowingly mishandled, they then
concealed their wrong doing by improperly reporting facts and reporting earnings that did not
exist

The manipulation of Adelphia’s financial statements to inflate earnings in an effort to meet

shareholders’ earnings was the first mistake. That fraudulent act tore down the trust between the
shareholders and investors continued to inject money into a company that had all the
appearances of profitability in reality it wasn’t.

The second mistake was that the family was using the company money and assets for personal use
thereby fraudulently wasting the company’s profits instead of giving back to the shareholders.

They again violated the duty ethics framework by reporting improperly and attempting to conceal
their flatulent activities. This caused Deloitte to fail to detect fraud in Adelphia, and bear the
penalty. They manipulate it very cleverly.