During the audit of Power Ltd. The auditor, John Higgins, noted that there were four shipments...
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During the audit of Power Ltd. The auditor, John Higgins, noted that there were four shipments of imported raw materials totaling $700,000 which documentation showed had been paid for in cash from a bank in Florida directly to the supplier. Other than the stock records there was no record of this transaction in Power's book. John asked the managing director and major shareholder if the company owned a bank account in Florida and for details of the lodgments to this account. The managing director refused to discuss the matter saying, "Ask me no questions and you will be told no lies." Discuss the course of action available to John and whether he should prepare the tax schedules. During the audit of Power Ltd. The auditor, John Higgins, noted that there were four shipments of imported raw materials totaling $700,000 which documentation showed had been paid for in cash from a bank in Florida directly to the supplier. Other than the stock records there was no record of this transaction in Power's book. John asked the managing director and major shareholder if the company owned a bank account in Florida and for details of the lodgments to this account. The managing director refused to discuss the matter saying, "Ask me no questions and you will be told no lies." Discuss the course of action available to John and whether he should prepare the tax schedules.
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As an auditor John Higgins has a duty to investigate any discrepancies or irregularities identified during the audit process In this scenario there ar... View the full answer
Related Book For
Auditing and Assurance Services
ISBN: 978-0077862343
6th edition
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws
Posted Date:
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