In a lawsuit between a Bottomfisher Bank and Cellular Dynamico, a question has arisen whether Cellular Dynamico's bookkeeping staff routinely recorded a journal entry in the ordinary course of business at approximately the same time that the accounting event reflected in the journal entry occured. The bank claims that the company manipulated its books and records several months after year-end to gain a tactical advantage in this litigation.
By coincidence, you happen to be the lead partner on the audit engagements for both Bottom-fisher Bank and Cellular Dynamico. You have been subpoenaed into court to testify about whether you saw this journal entry on the client's book prior to year-end. Your testimony is going to be yes, which will help Cellular Dynamico's defense, but it will harm the bank's claim. Will your testimony affect your continuing ability to serve as the bank's auditor? Will it affect your independence to remain Cellular Dynamico's auditor?