100%(1)1 out of 1 people found this document helpful
This preview shows page 4 out of 4 pages.
cash collections (which had become somewhat sporadic) and vouching to underlying loan documentation, including a set of recent (unaudited) financial statements that showed Fantastic’s solid financial position and operating profitability.Jennifer noted this reference to Fantastic Developments because this private company was also a client of her firm. In fact, Jennifer had served as the audit senior on the prior-year audit of Fantastic. She knew that the company had been struggling for a couple of years and had experienced recurring operating losses. Her knowledge of Fantastic did not reconcile with the discussion in the audit workingpapers related to the financial statements furnished to the bank.When Jennifer contacted Fantastic’s CFO, Tom Ward, and inquired about the company’s apparently miraculous turnaround, he was noncommittal and unhelpful. Tom replied that business had picked up.He apologized for not calling Jennifer’s firm himself because he had been so busy, and then he told herthat Fantastic had decided to engage another CPA firm for its accounting and auditing needs. Althoughconfused, Jennifer obviously couldn’t reject the possibility that this abrupt dismissal was a direct consequence of her inquiry.As a result, Jennifer wonders whether the financial statements which Fantastic furnished to the bank as a basis for a loan application are fraudulent. The bank apparently has no such suspicion, however._______________________________________________Use the Instructions for Case Analysesto craft a response to this case, articulating the main issues and ethical dilemma. Review the assessment criteria below before you begin writing. Submit a written paper which is 2-3 pages in length exclusive of reference page and that is double-spaced. You should cite relevant resources in APA format.