You are CPA and auditor with the ABC CPA firm. You were working on the audit of
Question:
You are CPA and auditor with the ABC CPA firm. You were working on the audit of James Madison Industries. In the course of your inventory work, you observed drums of chemicals leaking into a nearby river. You told the audit partner about your observation, and she told you to put it in your inventory memo and do nothing else. You followed those instructions and did nothing else.
It turns out that the chemicals were extremely toxic. The chemicals contaminated the water supply, poisoned children and impacted the long-term health of the community. Plaintiffs are suing James Madison Industries. You are called to testify.
The plaintiff's attorney Atticus Finch asks you:
Why did you not notify a government official about the leaking chemicals?
How do you sleep a night?
Auditing a risk based approach to conducting a quality audit
ISBN: 978-1133939153
9th edition
Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg