Superfund Audit Case

We need to advise superfund that Mountain resources may be committing fraud by overstating the property price. If we do not bring this to their attention we could appear to be abetting and aiding in this attempt as well. We do not want this reputation on our firm as other clients may question our auditor’s abilities. The best outcome from this situation is that it was an honest mistake and can be corrected before any substantial financial gain/loss is occurred. If superfund would pay the overpriced $42 million, they would have to write down the property value at a later date. They would be losing any recoverable value of the property and their assets would be too low to cover liquidity. This would endure a huge loss to superfund. It would not be professional to stand silent and watch superfund self-inflict …show more content…
The worst possible scenario for you and the organization you work for would be to lose your practicing licenses. When accepting any auditing engagement you have to realize any risk that could be involved. Every auditing firm prepares for this risk by carrying liability insurance. The best course of action in this case is to bring it up to the company’s board of directors or president. It would not benefit your organization to get sued over a liability that could be avoided. If they did try to sue you even though you brought it up, it would be near impossible to win that law suit as you did the due diligence. Even if you did not do this to avoid any legal complications it could bring up. You should do this for the rapport of your auditing firm. This shows you have a high ethical value and other clients will be drawn to this. It could build any client relationship you currently have and bring new clients to the table as you would be seen as a fair value auditor and someone who does their job with 100% accuracy and