Dilemma: At my first firm, I was assigned to a client as the associate auditor for their four companies. As I was reviewing the records of one of the companies, I noticed several discrepancies that were not covered by my specific audit tests. No single discrepancy was large enough to warrant a change in the audit procedures, but the nature of the entries made me uncomfortable. I thought the controller (head internal accountant) was either incompetent or she was being intentionally oblique.
I brought this to the attention of my direct supervisor and she advised me to ignore it because the variances were not individually significant. I was stubborn. I presented the situation to the audit partner and convinced him to let me test more of the company’s records. As it turned out, the controller was incompetent. The discrepancies were the result of her carelessness and lack of comprehension. There was no change to the financials, but she was fired because of my findings.
I was directly responsible for her losing her job and my findings did not change the audit. Should I have let it go and allowed her to keep her job?
Contributed by RC.
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