Auditor Should Resign

BY JOHN A. JETER

The Padding That Hurts ” ( JofA , Feb.03, page 67) was an excellent discussion of the reactions of various parties to fraud. However, I believe an independent auditor should resign from the audit of any company such as the one described. The external auditor knew a major officer was dishonest but not to what extent. He knew the CEO was not alarmed at the executive’s dishonesty and had even threatened to replace the auditor for bringing a fraud to his attention. The auditor also knew most of the members of the audit committee “were chagrined that they had to involve themselves in what they saw as such an insignificant matter.”

In my opinion the article should have discussed the possibility of the external auditor’s resigning and also mentioned that any audit committee members who react as did those described in the article need to be better informed of their responsibilities.

John A. Jeter, CPA
Omaha, Nebraska

SPONSORED REPORT

How to make the most of a negotiation

Negotiators are made, not born. In this sponsored report, we cover strategies and tactics to help you head into 2017 ready to take on business deals, salary discussions and more.

VIDEO

Will the Affordable Care Act be repealed?

The results of the 2016 presidential election are likely to have a big impact on federal tax policy in the coming years. Eddie Adkins, CPA, a partner in the Washington National Tax Office at Grant Thornton, discusses what parts of the ACA might survive the repeal of most of the law.

QUIZ

News quiz: Scam email plagues tax professionals—again

Even as the IRS reported on success in reducing tax return identity theft in the 2016 season, the Service also warned tax professionals about yet another email phishing scam. See how much you know about recent news with this short quiz.