Are still somewhat concerned about the reasons for

  • No School
  • AA 1
  • 9

This preview shows page 7 - 9 out of 9 pages.

are still somewhat concerned about the reasons for Wagner s resignation. Required: a. Describe fully the alternatives that are available to you in this situation. b. Express your personal opinion as to the appropriate course of action and provide reasoning to support your opinion. c. Could Marshall and Whyatt have validly refused to surrender the subpoenaed working papers to the IRS? Explain. 5-58. You are the partner on the audit of Datasave, Inc., a small publicly held corporation that manufactures high-speed disk drives for the computer industry. The audit of Datasave had been progressing satisfactorily until you were about a month away from issuing your opinion. Suddenly, and quite mysteriously, Carl Wagner, the financial vice president, resigned. John Ross, who had been a manager with a large CPA firm, was quickly hired to replace Wagner. Although the change in Datasave s chief financial officer caused some disruption, the audit was completed on a timely basis. As the last step in the audit process, you have prepared the representation letter for signing. You wanted the letter to be signed by William Cox, the president; Robert Star, the controller; and Wagner, who occasionally came to the company s offices to resolve matters regarding his past
Image of page 7
compensation. The signatures of Cox and Star were obtained, and you approached Wagner for his signature. In response to your request, Wagner replied, I no longer am employed with this crazy company. Why should I take any responsibility for the financial statements? Despite your attempts to persuade him, Wagner refused to sign the letter. Wagner also refused to discuss the reasons for his resignation, other than to say the reasons were personal. When you discussed the problem of Wagner s refusal to sign with Cox, he indicated that there was no problem because Ross would sign the letter. You see this as a possible solution, but you are aware that Ross knows very little about the financial statements for the year under audit. Also, you are still somewhat concerned about the reasons for Wagner s resignation. Required: a. Describe fully the alternatives that are available to you in this situation. b. Express your personal opinion as to the appropriate course of action and provide reasoning to support your opinion. c. Could Marshall and Whyatt have validly refused to surrender the subpoenaed working papers to the IRS? Explain.
Image of page 8
Image of page 9

You've reached the end of your free preview.

Want to read all 9 pages?

  • Fall '19
  • Finance, President of the United States, Public company, Sign, Carl Wagner

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes
A+ icon
Ask Expert Tutors