Team Assignment 2

| June 7, 2016

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In regard to Problem 8-43 of Team Assignment 2:
All Requirements: As you calculate these requirements and consider your responses to them, keep in mind that the ultimate response to this problem will be, in addition to the calculations required, that you will be answering the requirements #4, 5 & 6 from the viewpoint of an auditor who has been brought in by corporate management.
Corporate management has become concerned that they are being presented with results from the divisions which conflict with each other, although the support from the individual divisions seems to support the conflicting presentations. They want you to go through each division’s calculations, presentations and supporting documents as well as their arguments as to why their methodology is the best methodology for presentation of the results.
After you have conducted a comprehensive and thorough review at each division they want a recommendation from you in light of that division’s methodology regarding the appropriateness of their supporting reasoning and the ethics of the methodology and any other concerns, ethical or operational you may have.
If you have ethical concerns, you should include references to the appropriate standard including the standard itself and how you believe it has been violated. In addition, you should give the corporate management you suggestion on appropriate action to reduce the likelihood of this type of ethical violation in the future, assuming that they do not currently have a policy which covers this situation. You should also include in your suggestion a training plan that they may want to pursue if they adopt a new policy to ensure that all persons who need to hear and understand the policy are educated about it.
You should address your letter to Ms. Janet Smythe, Vice President, Internal Audit and Risk Management.
The answers to requirements #4, 5 & 6 should be clearly contained in this letter to Ms. Smythe.

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