Audit Case: Jaimica Water Properties
Sam Li
Case: Jamaica Water Properties
1. Place yourself in David Sokol’s position. After discovering the suspicious items in JWP’s accounting records, would you have taken a different course of action than he did? Why or why not?
I doubt if I can reach the position that David Sokol had in my career’s life. However, let say that if I was in David Sokol’s position, I would probably do the same thing David had done. I believe the proper working ethics are accountability, professionalism and integrity. As a COO, I should monitor the daily operation of the company and report the strong and weakness of internal control to the CEO. I should be accountable and professional for these responsibilities as David Sokol did. “If you ever obtain something by lying, it’s worthless. Integrity is the highest order of the day.” Said by David Sokol. I total agree with David Sokol. The honesty is one of most important ways to maintain a good reputation in one’s career’s life. Because all of evidence I collected had indicated there would be a devastating impact on JWP, I would choose to not to take $1 million “stay bonus” and leave the company. If I was able to save the company, I would stay. However, there’s really nothing I could do besides turning over all of the information I had collected regarding the company’s accounting fraud.
2. What measures can and should be taken to make it easier for corporate employees to “blow the whistle” on a fraudulent scheme they uncover within their firm?
I believe that there are at least 3 measures should be taken to make it easier for the fraudulent scheme detection. First, the firm should increase the influence of JWP’s internal auditors. The ideal situation will be that the internal auditor direct report to the board of directors and their findings and opinions should be more adequately and properly treated. In the case of Jamaica Water Properties, the function of internal audit should not be neutralized by CFO (Ernest
Case: Jamaica Water Properties
1. Place yourself in David Sokol’s position. After discovering the suspicious items in JWP’s accounting records, would you have taken a different course of action than he did? Why or why not?
I doubt if I can reach the position that David Sokol had in my career’s life. However, let say that if I was in David Sokol’s position, I would probably do the same thing David had done. I believe the proper working ethics are accountability, professionalism and integrity. As a COO, I should monitor the daily operation of the company and report the strong and weakness of internal control to the CEO. I should be accountable and professional for these responsibilities as David Sokol did. “If you ever obtain something by lying, it’s worthless. Integrity is the highest order of the day.” Said by David Sokol. I total agree with David Sokol. The honesty is one of most important ways to maintain a good reputation in one’s career’s life. Because all of evidence I collected had indicated there would be a devastating impact on JWP, I would choose to not to take $1 million “stay bonus” and leave the company. If I was able to save the company, I would stay. However, there’s really nothing I could do besides turning over all of the information I had collected regarding the company’s accounting fraud.
2. What measures can and should be taken to make it easier for corporate employees to “blow the whistle” on a fraudulent scheme they uncover within their firm?
I believe that there are at least 3 measures should be taken to make it easier for the fraudulent scheme detection. First, the firm should increase the influence of JWP’s internal auditors. The ideal situation will be that the internal auditor direct report to the board of directors and their findings and opinions should be more adequately and properly treated. In the case of Jamaica Water Properties, the function of internal audit should not be neutralized by CFO (Ernest