Bill Deburger

Topics: Audit, Financial audit, Bombshell Rocks Pages: 3 (430 words) Published: November 1, 2010
Bill DeBurger
Case 6.2

Your conclusion?

Justify the conclusion you would have reached in the memo

Bill’s conclusion?

the actual decision made by the”real” Bill DeBurger was that the inventory account balance was materially accurate It was obviously the decision the audit partner wanted Bill to reach

What approach would you have used?

Did Bill take the proper approach in discussing the matter with the partner? 

Bill should have discussed this issue with the audit partner much earlier in the audit By waiting until near the end of the audit, Bill placed the audit partner in a very difficult position Bill did act on his conscience, he took the courageous action of informing the partner of this decision

Did Bill take the proper approach in discussing the matter with the partner? 

He took a direct approach, no equivocating, which is probably the best strategy in a "touchy" situation, such as the one he faced

Evaluate Sam Hakes’ response

Anger is certainly unwarranted in most settings but recognize that the audit partner was probably under tremendous stress himself The client was likely exerting pressure so that the company would not have to report a loss for the first time in its history Hakes’ superiors were likely reminding him that this was a high-risk engagement Bill is his trusted and competent in-charge and turns Sam’s world upside down with his bombshell revelation

Evaluate Sam Hakes’ response

most would likely have had a difficult time controlling their emotions if placed in this situation Although Sam was clearly angry, he did not ask Bill to do anything unethical or unprofessional He simply instructed Bill to write the inventory memo, which Bill had an obligation to do one way or the other.

Should an inexperienced auditor have been assigned to this account? 

Most accounting firms would likely assign a senior to the inventory account of a client...
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