Since 2006, a large number of finance companies in New Zealandhave collapsed. Many management and accounting practices impacted the collapseof the finance companies. These practices include the debt...

Since 2006, a large number of finance companies in New Zealand have collapsed. Many management and
accounting practices impacted the collapse of the finance companies. These practices include the debt
funded business model and loans to related parties. Required: 1. Explain how the following practices
impacted the collapses of many finance companies. Citing the appropriate International Standards on
Auditing explain also how they in turn exposed the companies’ financial reporting to the risks of material
misstatement of financial statement: (a) the debt funded business model (b) loans to related parties 2 what
are the auditor’s responsibilities for the following in an audit of financial statements of finance companies?
Where appropriate, cite the relevant International Standards on Auditing (NZ). (a) Debtors (b) related party
relationships and transactions 400 words
These practices have impacted all the companies that work in capitalist economy. Economies all
over the world post global financial crisis has formed huge models on...