Flight Transportation Corporation.

1183 WordsOct 8, 20115 Pages
Summary of Case…. We are a society that depends on the integrity and honesty of individuals and organizations to ensure that we optimize our living situation, but unfortunately some members of our society do not always act with integrity, and are not always honest, and therefore we need checks and balances to ensure that such corruption and/or errors do not significantly disrupt the living situation amongst the majority of people. The case that I will be discussing in my project is based on Flight Transportation Corporation. Flight Transportation Corporation (FTC), an aviation company based in Eden Prairie, Minnesota. FTC’s principal line of business was executive and group air charters. In 1980 and 1981, the rapidly growing company…show more content…
Harrington accepted Rubin’s explanation for the IAS revenues that were booked in FTC’s accounting records, an explanation that accounted for FTC’s lack of documentation for this transaction. This issue reflects the violation of objectivity of the auditors. Arnott testified that he never believed sufficient competent audit evidence had been obtained to support the air charter revenues, but he never documented the disagreement in a written memorandum. Arnott testified that he was aware of the disagreement procedure but did not take advantage of it because he was worried that his job with Fox & Company might be jeopardized if he followed that procedure. This issue reflects the violation of Supervision and problem resolution of the audit manager. In 1981 In June 1981, Harrington and Arnott met with Rubin and other FTC officers in a planning conference for the 1981 audit. During this Meeting, Harrington and Arnott were told that most of FTC’s revenues had been produced by the company’s new Cayman Island Subsidiary without providing sufficient appropriate evidence. Rubin wanted the audit completed as soon as possible. The parties agreed that the fieldwork would be completed by July 31 and that the audit report would be signed by August 12. Recommendations…. To the
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