This part of the assignment relates to a recent Wells Fargo Corporation scandal. Many Wells Fargo employees set up false customer accounts and charged fraudulent fees for these accounts to meet sales goals for compensation purposes. The take-home exam folder in Canvas (inside of the Exams folder) contains 4 short (a few pages each) readings related to the audit of Wells Fargo and the auditor's role in detecting the frauds. The documents are:
- A summary of the U.S. government agency findings and penalty assessed to Wells Fargo.
- A letter from the same U.S. government agency to the audit firm, asking for information about what the Wells Fargo audit teams found, and did with the findings, during their internal control audits of the company.
- A letter from the CEO of the audit firm, providing the firm's official responses to the questions posed by the agency.
- From Wells Fargo's 2012 annual report: a sample audit firm report on Wells Fargo's internal controls over financial reporting, and Wells Fargo's balance sheet and income statement.
Read the documents and answer the following questions.
(1) Consult the PCAOB audit standards for illegal acts
Summarize in a full paragraph the auditor's responsibilities related to auditing for and reporting illegal acts.
(2) In reading the audit firm's letter to the U.S. government agency, do you believe that the audit firm:
(a) gathered appropriate evidence, and
(b) made appropriate conclusions
about the impact of the employees' actions on the Company and its financial reporting?
Explain your thinking with a full paragraph each for (a) and (b).
Note that you should use your answer to question (1) as the reference to answer the question (2).
Attachment:- Assignment.rar