Raul,PA,received a Call from His Friend Cristobal Franco

question 96

Essay

Raul,PA,received a call from his friend Cristobal Franco.He needed an audit urgently,because the bank might call his loan for his computer store CF Ltd.Since Cristobal had been his high school friend and they still played soccer together every two weeks,Raul agreed.Raul and Cristobal had a quick meeting,where Raul fixed the audit fee at $10 000.Cristobal stressed the importance of an unqualified opinion for the bank.
Raul sent two available junior staff to CF's offices.The junior staff were experienced in review engagements,and had been working for Raul for about six months.The two staff had a quick look around the store,noting the documents strewn everywhere.The accounting staff came in and chatted briefly after their smoke break.They were about a month behind on recording transactions,because Cristobal had laid off one salesperson.The accounting staff also helped out with providing sales quotes and Cristobal did all of the technical work.
At the end of the day,the junior staff were each given a $250 gift certificate to be used in the computer store.This was great,because CF also sold MP3 players and supplies such as CDs and DVDs.
At dinner that night,the junior staff told their family that it would probably be a great idea to hold off on any computer supplies or equipment purchases that they needed,since CF would likely hold a sale in the next month or two to improve cash flow.
Required:
Identify and discuss the violations in the rules of conduct with respect to CF.

---

Definitions:

Compliance Programs

Structured plans implemented by organizations to ensure adherence to legal, ethical, and regulatory standards and requirements.

Terrestrial Planets

Our solar system’s four inner planets, which have solid rocky surfaces and include Mercury, Venus, Earth, and Mars; syn. inner planets.

Planetary Rings

The rings of ice, rock, and dust that orbit some planets outside their atmospheres, the most famous of which are the rings of Saturn.

Outer Planets

The planets in the Solar System located beyond the asteroid belt, typically referring to Jupiter, Saturn, Uranus, and Neptune.