Jane Goodperson Performed an Audit on the Quagmire Corporation and Issued

question 24

Essay

Jane Goodperson performed an audit on the Quagmire Corporation and issued an unqualified opinion. Jane performed the audit with due professional care and in accordance with generally accepted auditing standards. Two months after the report is issued, Jane discovers on the news that the CEO of Quagmire, Johnny Best, had been stealing small amounts of inventory. The amount, however, is immaterial compared to the overall inventory of the corporation. Jane soon receives a call from Quagmire's CFO, Mark Beastly. Mark wants Jane to refund her audit fees. Mark thinks Jane did not properly perform the audit, as she did not discover this fraud. Further, he feels that now Quagmire's financial statements are not fairly stated because of Jane. How should Jane respond to this claim?

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Definitions:

Computer Capacity

The total amount of data storage, processing power, and memory a computer system can handle at one time.

24 Months

A time period equivalent to two years, often referenced in planning, warranty terms, or developmental milestones.

Strategic HR Operation

The process of aligning human resource activities and policies with the strategic objectives of an organization to achieve long-term goals.

Automation Capabilities

The extent to which a process, operation, or task can be performed by automated means, typically involving technology or machinery.