In the Lee & Han, LLC case, Barbara Strom should:
A) Report the situation to SEC under the Dodd-Frank Act.
B) Change the audit workpapers to not reflect the market decline in inventory.
C) Discuss the matter with Kate Boller.
D) Report the situation to the firm's oversight or similar committee.

Question

Quizplus · Accepted Answer

Reporting the situation to the firm's oversight or similar committee is the best option as it allows for internal resolution of the matter, while also fulfilling the auditor's responsibility to report any instance of fraud or illegal activities within the company. Reporting to SEC under the Dodd-Frank Act may not be necessary unless there is evidence of significant financial harm or risk to shareholders, and changing the audit workpapers to not reflect the market decline in inventory would be unethical and may amount to fraud. Discussing the matter with Kate Boller may not lead to a satisfactory resolution of the situation.

In the Lee & Han, LLC Case, Barbara Strom Should