While performing tests of controls for the cash-in-vault account ($50,000 total as of the Balance Sheet date)
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I have an issue with this question. This narrative implies that the auditor performed follow-up work without proper authorization. It also does not state how the auditor “knows” there is fraud. Both of these imply ethical issues. Suggestion: Make this clearer by having the employee CONFESS the theft (I would avoid the “fraud” label).
Even though the fraud you’ve found is below your materiality threshold, do you need to take further steps? If so, what steps will you take? Does the fraud impact your audit opinion on ICFR effectiveness?
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Related Book For
Auditing and Assurance Services Understanding the Integrated Audit
ISBN: 978-0471726340
1st edition
Authors: Karen L. Hooks
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