You are the auditor of Telco, Inc. Telco, Inc. is a distributor of mobile handsets. You are currently performing test of controls for sales transactions. While talking to Cap Ri, the senior sales clerk, you mention that you apologize for not responding while you are on your way to field work because your smartphone is broken. A short time later, the sales manager approached and offered you the opportunity to purchase top of the line mobile device at the same price as paid by employees, which is substantially below retail price. Employees take advantage of the discount not only for themselves but for family and close friends as well. He informs you that all you need to do is order the goods from Cap Ri and pay cash or check. 

 

How would this situation affect your audit? 

Answer rating: 100% (QA)

The situation described can have significant implications for the audit of Telco Inc Here are some key considerations 1 Independence and Objectivity A... View the full answer