Janice is a staff accountant in the accounting firm of Obama and Biden. She is assigned to the audit of HealthCare Associates. On the very first day Janice noticed that the accounting manager of the client took money out of the petty cash fund and put it in his pocket. The best action for Janice to take is:
A) Ignore the situation because Janice doesn't know why the manager pocketed the money
B) Inform her immediate supervisor of what she observed
C) Tell another staff accountant who is a friend and ask for her advice
D) Tell the superior of the accounting manager what she has observed

Question

Quizplus · Accepted Answer

Janice has a professional obligation to report any suspected fraudulent or unethical behavior that she observes during an audit. She should inform her immediate supervisor so that the matter can be investigated further by the audit team and appropriate action can be taken. Ignoring the situation or discussing it with a friend could compromise the integrity of the audit process, and going directly to the manager's superior may not be appropriate or effective without first consulting with her own supervisor.

Janice Is a Staff Accountant in the Accounting Firm of Obama