If You Need Love, Get A Puppy Essay

1. PCAOB describes overlord mental rejection as a habitual duty of care that needs to be applied by the attender through with(predicate) fall out the duration of the canvas engagement. Professional skepticism involves the size upor having a clear and interrogatorying mind regarding the assurances that are presented by management or different client personnel. The tender is instructed to non take the words or data presented by management as sufficient and earmark canvass conclusion but rather the attendee needs to thoroughly audit the designate with a questioning mind to achieve reasonable assertion about the persuasiveness of the evidence. Skepticism is composed of three elements listener attributes, mindset and actions. The PCAOB instructs the meeter to always question evidence presented by the auditor for the hazard of loss, art or financial mis mastery. ordain, the auditor, exercised jobal skepticism in this suit when it came to the mysterious interchange fine payments for the tickets on 11/16. Having been peers with Jessica, willing require to exhibit a higher train of skepticism. When Jessica produced the bank fixate instance for the $320 ticket and asserted that the determine slip had probably f altoge in that locationn in amidst twain cabinets in the vault, leave alone had the opportunity of taking Jessicas assertion as sufficient and appropriate evidence but rather firm to investigate further and noticed that the social class on the bills was different than the year of the ticket and that the ink on the deposit slip was different. Will thusly widened the sample size to see if this was a singularity or evidence of an on passing ply/fraud.The two main conditions that could have chance oned his skepticism were his relationship with the process owner he was auditing and the physicalness levels set forward for the audit. Jessica Randle, the married woman of Wills best friend, was the process owner for the commonwe alth Will was currently auditing. This presents an getting even in that skepticism can sometimes be influenced by the relationships auditors have made with the people they are auditing. An auditor is more likely to intend the assertions made by some ane they manage and trust, and this directly hinders on their skepticism. Will might alsohave inflexible to not pursue further with his investigation of specie deposits that are absentminded their deposit slip due to the amounts ($320), being below the materiality doorway of $5,000.This, coupled with the accompaniment that he felt as if he was pestilential his superiors by asking many questions might have caused Will to only abandon further investigating the area. If Will had not been exercising professional skepticism, he would simply have taken Jessicas assertion as to why the deposit slip was missing as sufficient and appropriate evidence and moved on with an different audit area. Jessica would have neer gotten caught, and the fraud might have continued.2. The Generally Accepted Auditing Standards require that the auditor must maintain inde drop a linedence in mental attitude in all matters relating to the audit. There are two types of independence that are inevitable of auditors. Independence in appearance re latishs to others perceptions of auditors independence. It is of the utmost importance that users of the financial statements believe that the auditor is commutative. For instance, if an auditor were to own even one share in a company that he or she was auditing, third party users would likely see that auditor as lacking independence even if the auditor was truly unbiased and considered that share irrelevant.The Code of Professional Conduct addresses the issue of personal client relationships. The familiarity threat states that auditors having a close or keen-sighted standing relationship with an attest client or knowing individuals or entities (including by reputation) who performed nonatte st services for the client lack independence. Part e. of this section states that a member of the attest engagement team whose close friend is in a key position is unallowed. Wills independence in this case was questionable.His best friends wife, Jessica, worked for the client, but she did not piddle a key position. Wills independence in fact may be perceived differently by different users. However, Wills independence in mind seemed to be impaired in this case. He was clearly uncomfortable accusing his best friends wife of fraud. Some cases may exist where auditors in similar postures were so uncomfortable that they looked the other way.The factor that plays the greatest role in find out auditor independenceis independence in mind. Auditors may or may not appear to be independent, but if the auditor is truly independent in mind, so the auditor can remain objective and unbiased. The profession should consider tightening the Code of Professional Conduct to address the issue of an audit team member knowing a close friend that holds any position at the audit client. If this scenario arises, the firm can suave audit the client, but the audit member with the close relationship wint be able to be on the audit team.3. The evidence in the case is presented in a manner that leads to a stronger repel to Jessicas claim that the gold had fallen between the cabinets as unconnected to supporting her claim. The evidence that would lead to support her claim would be her statement that there could be several explanations as to why the ticket was missing. She originally suggested that the ticket most likely was included with the other cash. After finding the ticket, Jessica states a story of what must have happened was that the assistant clerks were working late one night and must have decided to include the deposit with the following days bank deposit. Thus, when the ticket was missing, no one noticed. All of these explanations mentioned are all responses to inquiri es of client.This type of evidence is not decisive and could be biased in the clients favor hence, why this is the only evidence that is in favor of Jessicas statement. When Will went substantiate to his desk and counted the money he made sure the money on the slip was all there, $320, which is way under the set amount of $5,000 for materiality on the job. However, he noticed that the bills were crisp and has been printed in 2006. He checked this pole to the bank deposit slip where he reconfirmed that the deposit was dated November 16, 2005. He thusly traced it back to the cash receipt to find that it was indeed record on November 16, 2005.This document tracing is important evidence that clearly shows a discrepancy in the documentation which lead to the first real greenback of evidence towards fraud. Another discrepancy that caught Wills eye was the insertion in the in receipt disc was recorded in nasty ink while the writing on the envelope was in dismal ink. Although this is not a strong form of evidence, it is enough to bring into question the evidence that has been traced back to recorded items.4. Effective controls that if installed would have prevented or find this theft include Segregation of Duties (SoDs) and Daily payment and bank deposit reconciliations. The first area of controls deals with the Receipt books and proper SoDs. The liquidator of cash payments should be different from the individual that records that cash payments into the Sheriffs computer records as paid. The other control deals with reconciliations. The morning after the daily payment vouchers are processed and deposited, a reconciliation by someone who was not a recipient of cash payments the previous day needs to be done to subject that the total amount deposited into the bank matches the bank statement of amounts deposited by check, cash and money order. A monthly reconciliation needs to be performed for all payments done by credit card.5. After Will presented Vince wi th the evidence that he has found after Jessica showed him the missing deposit slip along with the cash, the two decided to test eight more cash paid tickets. When five of the eight tickets were also not included in the bank deposit of the day, Will and Vince decided to have a meeting to discuss how they were going to proceed. With the evidence leading to fraudulent activity, the auditors could have decided to proceed in one of two ways. The first being to assess the level of materiality and decide if the amounts were immaterial, and if so they could leave the report as is. The other alley the auditors could take is to further examine revenue, specifically the tickets paid in cash. If the decisiveness is to proceed even further with the audit, there are multiple move the auditors would take to reach reasonable assurance.First, they could examine internal controls to see if there was any other person who could have been using Jessicas scream as a cover up, for she was not the onl y assistant shop assistant of Court. Next, they could examine every cash transaction for 2006, and if the trend continues, examine through previous years. Along with further testing of the transactions, the auditors would be conscious of the level of materiality. The auditors could even go to the extent of checking the bank statements to verify that the cash tickets arent being put with other cash deposits in the department. Ultimately, the auditors would have to meeting the sheriff and police department to reporttheir findings.In this case, the auditors may have decided to6. In pursuing the matter, Will faced a number of pressures. At first he was concerned because Jessica was his best friends wife and he did not feel comfortable working in the situation. save Vince Huston, the partner that he had usually worked with assured him that knowing Jessica may not be such a bad thing. When Will was completing the audit and found that a cash receipt had not been deposited, he did not wa nt to believe that Jessica was responsible so he double-checked his work and then he asked her about it. After receiving the bank deposit from Jessica, he was pipe down skeptical because he had noticed a few minor things. The pen ink was two different colors in the receipt book and on the envelope. And then he noticed that it is impossible for a 2005 cash receipt to be paid for with a bill marked 2006.Will asked Jessica about the matter but she brushed it off and he was squeeze to report what he found out to Vince. In dealing with the misapplication of assets of fraudulent financial reporting, auditors are to maintain professional skepticism throughout the engagement. This is because fraud is often committed by a person that the auditor least expects. In this case, it was Jessica. Will maintained his professional skepticism and did not let the fact that Jessica is his best friends wife affect his work. Auditors, in general, must also be aware of the basics of fraud awareness. Aud itors should be able to notice any signs or signals of fraud and then be able to trace the documents back to anything that may help to bring out fraudulent activity.7. When most people make ethical decisions, one of the things they do is try to find alternatives to the problem or situation and ask themselves what the consequences of those alternatives would be. In Wills situation, after finding out that Jess was involved in misappropriating the cash associated with the ticket he had the options of letting what he had found out slide because Jess was his best friends wife, or confronting her about the situation and reporting her or letting her report herself.Ignoring the obvious signs that Jess was stealing money would only lead to her continuing to steal more money. The auditor would be putting their career in jeopardy and it would be highly wrong of any auditor to act in this way because they have a responsibility to maintain professional skepticism throughout the audit process. The other alternatives of reporting Jessica or letting her report herself to the authorities would be the accountability and ethical alternative to the situation. The consequences would be pretty much the same as they had turned out. Consequences for reporting Jess would be what they turned out to be. She would get penalise for her crimes and on a more personal level, reporting her would lead to Will losing his best friend.