This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: Once done with this the auditor should then research inquires on the sale of this company and its competitors. By doing this the auditor can catch any and all red flags like if the other companies are not doing so well and Fiber Optics Inc. is. The auditor can also learn if there is an audit committee, when and how often they meet with any external/internal auditors, management, CEO/CFO? C. Hypothesis: I. With only 5 customers we can gather that there are some very fictitious contracts that are generating more profit then actual profit. Control Failures: I. All of the company’s contracts should be verified that they are valid, real people, and that sales are valid with invoices for the current period. A Scientific Method Audit Procedures: I. The auditor should send out a confirmation sheet to any and all customer‘s for them to fill out and return with a copy of the receipt to verify all purchases dates and purchases....
View Full Document
- Spring '11
- Fiber Optics Inc.