Public Controversy
This best-selling video game series by Take-Two sparked massive public outrage and multiple government hearings
GTA (Grand Theft Auto)
To artificially inflate its fiscal year 2000 revenue by roughly $26 million, Take-Two engaged in these fraudulent arrangements
Parking transactions
This was the name of the PwC audit engagement partner who signed off on Take-Two's fraudulent fiscal year 2000 financial statements
Robert Fish
This required auditor mindset involves a questioning mind and a critical assessment of audit evidence, which PwC lacked
Professional skepticism
Following the SEC's investigation into its accounting practices, Take-Two was hit with this penalty totaling how much
$7.5 million corporate fine
This organization was the main regulatory body petitioned by politicians to regulate the game's market rating, though they weren't the ones who ultimately brought down the financial sanctions
In connection with their fraudulent shipping arrangements, Take-Two received the returned games under what purchase
New product inventory
His "father-son" relationship with Ryan Bryant, and serving as business advisor and audit supervisor
Under GAAS, auditors must obtain this type of evidence, which PwC failed to properly secure when he blindly accepted management's explanations
Sufficient and competent evidence
The SEC sanction targeted top executives, including the former CEO, COO, and CFO. Among these penalties the former CFO received what
10-year suspension from practicing before the SEC
This prominent safety advocacy group heavily criticized Take-Two for including a drunk driving scene in the game
Mothers Against Drunk Driving
The ultimate financial consequence of these schemes forced Take-Two to take this action three separate times between 2001 and 2004
Restating its financial statements
When testing cutoff errors for year-end sales, PwC examined five transactions (4 of which had a product return rate of at least 75% compared to Take-Two's historical reserve rate of only 5%). PwC committed a major GAAS failure by doing what
Failing to trace the transactions to original invoices
If an auditor uncovers high return rates or unusual financing arrangements, auditing standards require them to perform additional testing specifically targeting this risk category
Fraud risk (revenue recognition fraud)
This was the consequence given to Ryan Bryant the former CEO of Take-Two
$500,000 fine and a forfeit of $3.1 million of stock market gains
In 2005, this U.S. Senator urged the FTC to give GTA an "Adults Only" rating due to violent and explicit content
Hillary Clinton
Beyond faking shipments, Take-Two manipulated this specific balance sheet account to artificially boost reported assets and net income
Reserves for video game returns
As a result of the SEC sanctions, Fish suffered this penalty regarding his career
One-year suspension
A corporate board relies on this specific group of independent directors to oversee the audit process, manage relationships with the external auditor, and review internal controls
Audit Committee
Despite the scandals and fraud in the early 2000s, Take-Two eventually rehabilitated its financial reputation enough that it joined this in 2018
S&P 500
A CNN commentator branded GTA with this controversial nickname after a tragic 2003 incident in Alabama involving three police officers
Besides traditional revenue and return manipulation, Take-Two also got caught altering the grant dates of these equity awards to artificially manipulate executive compensation expenses
Stock options
During their audit, PwC was forced to apply alternative audit procedures to test Take-Two's receivables because of what
Poor response rate to customer confirmation requests
This audit test is a common substantive procedure when dealing with accounts receivable
Positive confirmation requests
In 2008 Take-Two faced massive market vulnerability, resulting in this major competitor launching a $2 billion hostile takeover bid which was ultimately resigned and dropped
EA (Electronic Arts)