Chapter 5 - Audit Responsibilities and Accounting Fraud

Chapter 5 starts out outlining the audit statements and goes into the premise behind each one. 
     The introductory paragraph identifies what has been examined, management's responsibilities in respect to the conformance of the financials to GAAP, and the auditor's responsibility.
     The scope paragraph goes into specifics as to the auditor's responsibility as to following GAAS, "reasonable assurance"/"material misstatements", how the auditor assessed the financial statements, and that the audit provided a reasonable basis for the opinion.
      The meat and potatoes is the actual audit opinion which can be either: qualified, unqualified, or adverse.  The audit firm can also issue a disclaimer or no opinion, or withdraw altogether.
      Next, the chapter provides an overview of GAAS.  Apparently the AICPA lacked the fortitude to hold those auditors accountable when they do not practice GAAS.  The SEC took over and formed the PCAOB, whose audit standards are required and not just generally accepted.
     One would think that with the formation of PCAOB, that fraud would decrease, but in fact, it has increased, or rather the reporting of it has.  Looking at the SEC website, I noticed that in 1998, there were 98 bulletins published, by 2010, the number was 258.  So far, there have been 89 in 2011, among the latest is a case against Johnson and Johnson for bribery of European officials.  The fine levied as $70million.
     Where did that money go?