Question

Describe the nature and purpose of a "peer review." Would peer reviews of Friehling & Horowitz have likely resulted in the discovery of the Madoff fraud? Why or why not?

Answer 1

Answer: The primary purpose of peer review is to ensure that the papers published are valid and unbiased. In single blind reviews authors do not know who the reviewers are. In double blind reviews authors do not know who the reviewers are, nor do reviewers know the identity of the author

Explanation: The Peer reviews from Friehling and Horowitz  did not really give a concise  picture  in the discovery of Madoff fraud case . On March 12, 2009, Bernard L. Madoff pleaded guilty to 11 counts of fraud, perjury, and money laundering connected with the largest Wall Street Ponzi scheme ever recorded a reported $65 billion. Madoff faces a potential prison sentence of 150 years. But since December 2008, attention has turned to David G. Friehling, Madoffs accountant Friehling was arrested on March 19, 2009, and charged with securities fraud and with aiding the investment advisor fraud committed by Madoff.

A civil case was filed by the Securities and Exchange Commission (SEC) against Friehling and his accounting firm, Friehling & Horowitz, CPAs, P.C., on March 18, 2009. The SEC alleges that Friehling (and Friehling & Horowitz) purported to audit and certify the financial statements and disclosures of Bernard L. Madoff Investment Securities LLC (BMIS) from 1991 to 2008, thereby enabling Madoffs Ponzi scheme to go undetected.