Case Study : Ethan And Shawaunna

2131 Words Nov 10th, 2014 9 Pages
ACCT 732 Case Three - Ethan & Shawaunna
Question 1:
After reading this case my first reaction was that the U.S. Immigration and Naturalization Service should handle the issue regarding an alien’s legal status in the U.S., as auditors this does not affect us. From a personal standpoint, we do not believe that the CFO’s action poses a direct threat to the completion of our job, but we do not feel comfortable knowing this information. We understand the severity of such a violation but is it our job to say something about it? Would remaining silent about this transaction look as if we are biased or lack integrity? The CFO lied once to the U.S. Immigration and Naturalization Service when he completed the Form I-9, but distinguishing what is right and wrong can be difficult when facing difficult situations. This information does not indicate that the CFO is a frequent liar because he told us the truth without being asked, which reduces the possibility of him committing fraud on the financial statements. Based on the fact that the CFO and company has lied before about a very serious matter, as auditors, we would have to exercise a high level of professional skepticism going forward due to the increase in both inherent and control risk. We have to be sensitive to all information regarding the company, especially when the information is tied to the company’s management. Our responsibility for this situation all depends on the extent of the impact of the CFO’s illegal act…

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