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1. Consider the impact of this event on Wells Fargo's financial statements. Specifically, consider how the alleged inappropriate sales practices were reflected in Wells Fargo's financial statements in the 2011 through 2014 time period. Also, consider how the $185 million fines might be reflected in Wells Fargo's 2016 financial statements.
2. Visit the website of the U.S. Securities and Exchange Commission (www.sec.gov) and locate the Form 10-K filed on February 25, 2015, by Wells Fargo & Company for the 2014 fiscal year. (Note: The financial statements are contained in the link to Exhibit 13 of that 10-K filing). Based on that financial information filed with the SEC just prior to the first public announcement of the alleged sales improprieties, assess the following:

• • Would the $185 million fines be considered material to the Wells Fargo financial statements?
• • How did the alleged sales practices shed insights on the effectiveness of internal controls over financial reporting at Wells Fargo?
  • Because the letter from the four Senators is a public document accessible under the Freedom of Information Act, the response from KPMG would need to be carefully crafted. If you were in Lynne Doughtie's position, would you respond to the letter from the Senators? If so, what would be some of the challenges in crafting your response?

1. describe how Wells Fargo's sales practices infiltrated its culture and impacted the scandal that emerged.

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