The discussion of the work of the auditors is particularly interesting for accounting students, academics and practitioners. In this chapter, the author focuses much of his attention in considering whether the auditors at PTL should have detected and reported the oversell of the partnerships. In particular, he asks whether the auditors exhibited an appropriate level of professional skepticism given the control environment at PTL [pp. 211212] and its serious cash flow problems. Deloitte, Haskins and Sells, auditors until 1985, claimed to be unaware of the oversell of partnerships which began after year end but prior to their last audit sign off. Despite the GAAS requirement to consider subsequent events, the auditors testified that “we were auditing balance sheets as of May 31, and there was no reason in my judgment to look at this number [the sale of lifetime partnerships] after May 31″ [p. 215]. The audit partner further indicated: “I don’t think that their system provided adequate information that would give you a reliable number” [p. 211]. A statement that leaves one wondering how an audit could have been conducted. Although Deloitte did not consider whether PTL had exceeded the promised limit on partnerships, the firm did consider the sales of these partnerships in deciding not to issue a qualified audit opinion for PTL. Tidwell comments: “It is difficult to understand how Deloitte could understand PTL’s future financial plans but yet not evaluate the current sales
