Unformatted text preview: top management is suspected, then refer to
corporate governance bodies only.
Legal counsel or other appropriate external
5. Assume that the act is not isolated; 6. Determine how the act slipped through the internal
control 7. Broaden audit procedures to consider the possibility
of more acts of this nature;
of 8. Conduct additional audit procedures; 9. Evaluate the results of expanded audit procedures; 10.
10. Consult with legal counsel and possibly corporate
governance bodies to estimate the potential impact of the
irregular and illegal acts, taken as a whole, on the subject
matter of the engagement, audit report and organization.
matter 11. Report all facts and circumstances of the irregular and
illegal acts (whether suspected or confirmed) if the acts
have a material effect on the subject matter of the
engagement and/or the organization.
engagement 12. Distribute the report to appropriate internal parties, such
as managers who are at least one level above those who
are suspected or confirmed to have committed the acts,
and/or corporate governance bodies.
and/or Regulatory & Legal Issues
Regulatory Auditors need a working knowledge of
regulations and laws so they at least can
determine when to refer matters to legal
counsel. Legal Contracts
Legal A contract is an agreement between or
among two or more persons or entities
(businesses, organizations or government
agencies) to do, or to abstain from doing,
something in return for an exchange of
– Law provides remedies, including recuperation
of losses or specific performance.
of Three Elements
– Clearly identify subject matter of the agreement
– Completely describe services including time,
place & quality
– Identify goods including quantity (Material
term under UCC)
term Three Elements
– Statement of what the offeror expects in return
from the offeree.
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- Spring '13