Essay Anonymous Caller Auditing Case Study

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Anonymous Caller Case Study 1 a) What would you recommend to the caller if you were Dr. Mitchell? Since it appears that the firms top executives are all apart of the fraud and don’t plan on correcting their unethical action. I recommend that the anonymous caller completely remove himself/herself from the situation by resigning or by reporting the situation to the firm’s board of directors or a governmental agency. b) What are the risks of continuing to work with the company? There are many risk involved with staying with the firm. If the caller decides to stay with the company and the bank finds out about the fraudulent entries, as the controller of the company, the caller would take most of the blame for allowing the fraud…show more content…
b) What concerns do you have about notifying the external auditors? The only concern I have about notifying the external auditors is that the caller might get in trouble too. Because as the controller of the firm, it is the callers job to make sure that fraudulent accounting practices do not occur. 4 a) Do you think situations like this (i.e., aggressive accounting or even financial statement fraud) are common practice? Unfortunately, I do believe that aggressive accounting and financial statement fraud are a common practice. I don’t think it’s to far fetch to believe that companies use projections and other types of false data to fool banks especially when they have huge incentives to do so. b) What pressures or factors will executives use to encourage accounting managers and staff to go along? More than likely, executives will use the threat of firing the accounting managers and staff as a way to get them to do what the executives want. c) What arguments can you use to resist those pressures? Accounting managers and staff can overcome the pressure put on them by executives, by remembering their ethical and legal duties expressed by various accounting ethical standards , regulations and laws. 5) Describe example of incentive, opportunity, and attitude conditions that were present in the situation Incentive: The company was facing a severe cash flow shortage, and the bank had
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