Campus Fast Is a New Audit Client

question 54

Essay

Campus Fast is a new audit client. Client Fast uses public WiFi to place and deliver restaurant take out for students at the Up and Coming State University. Campus Fast was founded by three highly ambitious MBA students at the university. The business plan is to find a buyer or place an IPO of the company by graduation in two years. The founders expect to pay off all student loans, take a tour around the world and then start another company. In order for the business plan to work on the timeline for graduation, the business must meet highly ambitious earnings numbers. Additionally, the company is dealing with two situations that the founders would like to keep from the auditors:
1) The company has been using free, unsecured public WiFi to take orders via the Internet. The customer may pay via the Internet. Several students, who all happen to be members of the same student organization on campus, are claiming that using Campus Fast has allowed their identity to be stolen. One student is claiming that she had $12,000 of charges on her credit card to the unsecured Internet site of Campus Fast. Management plans to pay off the complaining students and keep the true liability off the balance sheet. The reason is Campus Fast is concerned that an interested buyer may become concerned about the unsecured site and might get scared by the student complaints.
"2) The company guarantees fast delivery. It has offered to pay any speeding or other moving violation tickets to its delivery drivers. Unfortunately, one of the drivers was involved in an accident due to running a red light. The passenger in the other car is in critical condition and the intensive care unit in the hospital. The driver has promised the family of the passenger that the company will make good on any expenses and admitted the company policy on repaying all traffic tickets. Attorneys for the injured party are threatening to sue and publicize the situation. The founders do not have enough cash to take care of this problem but are still trying to keep the situation from the auditors and potential buyer.
Using the internal control framework assess the internal controls at Campus Fast and risk environment."

Identify federal acts that support drug-free workplace initiatives and their impact on small businesses.

Understand the protection against false or misleading public statements about employees.

Recognize the legal requirements for disclosing personnel records by federal agencies.

Understand the limitations and conditions under which employers can monitor employees' electronic communications.

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Definitions:

Lexicon

The complete set of words in a language or a particular field of study.

Reprimand

A formal expression of disapproval, often in the workplace or educational settings, aimed at correcting undesirable behavior.

Truth

The property of being in accord with fact or reality, often considered as an ultimate standard or objective to be sought.

Social Comparison

The process of evaluating oneself in relation to others, often in terms of abilities, achievements, and social status.