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The Managerial Accountant Reviews the Report from the Internal Audit

question 18

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The managerial accountant reviews the report from the internal audit function that ensures the company's internal controls and risk management policies are functioning properly. According to the report, there were discrepancies in the internal controls that are not in conformance with the organizational policy and applicable law. The managerial accountant suspects that the CEO is embezzling $30,000 per quarter. What should the managerial accountant do about this discrepancy? If the accountant fails to act on this issue, what standard according to the IMA Statement of Ethical Professional Practice does the accountant violate?


Definitions:

Environment

The surroundings or conditions in which a person, animal, or plant lives or operates.

Heredity

The passing of traits from parents to their offspring, either through asexual or sexual reproduction.

Nurture

The influence of external factors after conception, such as environmental and educational experiences, on personal development.

Risk Factors

Elements or conditions that increase the likelihood of an undesirable outcome or disease.

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