On June 1, Sidney Faultless of A. J. Faultless & Co., CPAs, noticed some disturbing information about
Question:
The mail fraud was involved in Baker’s attempt to cover his activity until he recovered the original losses. Most of the events were in process on March 1, when Faultless had signed and dated the unmodified opinion on Hopkirk’s financial statements for the year ended on the previous December 31.
Faultless determined that the information probably would affect the decisions of external users and advised Hopkirk’s chief executive to make the disclosure. She flatly refused to make any disclosure, arguing that the information was immaterial. On June 17, Faultless provided the subsequent information in question to a news reporter, and it was printed in The Wall Street Journal with a statement that the financial statements and accompanying auditor’s report on the company’s financial statements could not be relied on. Required: Evaluate the actions of Faultless & Co., CPAs, with respect to the information discovered. What other action could Faultless & Co. have taken? What are the possible legal effects of the firm’s actions, if any?
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Auditing and Assurance Services
ISBN: 978-0077862343
6th edition
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws
Question Posted: