Company Auditing

Herbert McCoy is the president of McCoy Forging Corporation. For the past several years, Donovan & Company, CPAs, has performed the company’s compilation and some other accounting and tax work. McCoy decided to have Donovan & Company conduct an audit. He had recently received a disturbing anonymous letter that stated, “Beware; you have a viper in your nest. The money is literally disappearing before your very eyes! Signed: A friend.” He told no one about the letter. McCoy Forging engaged Donovan & Company, CPAs, to render an opinion on the financial statements for the year ended June 30. McCoy told Donovan he wanted to verify that the financial statements were “accurate and proper.” He did not mention the anonymous letter. The usual engagement letter providing for an audit in accordance with generally accepted auditing standards (GAAS) was drafted by Donovan & Company and signed by both parties. The audit was performed in accordance with GAAS. The audit did not reveal a clever defalcation plan. Harper, the assistant treasurer, was siphoning off substantial amounts of McCoy Forging’s funds. The defalcations occurred both before and after the audit. Harper’s embezzlement was discovered by McCoy’s new internal auditor in October after Donovan had delivered the auditors’ opinion. Although the scheme was fairly sophisticated, it could have been detected if Donovan & Company had performed additional procedures. McCoy Forging demands reimbursement from Donovan for the entire amount of the embezzlement, some $40,000 of which occurred before the audit and $65,000 after. Donovan has denied any liability and refuses to pay. Required: Discuss Donovan’s responsibility in this situation. Do you think McCoy Forging could prevail in whole or in part in a lawsuit against Donovan under common law? Explain your conclusions.

Don't use plagiarized sources. Get Your Custom Essay on
Company Auditing
Get a 15% discount on this Paper
Order Essay
Calculate the price
Make an order in advance and get the best price
Pages (550 words)
$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with My Paper Support
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Nursing
excellent service! Not a beat missed!
Customer 452453, October 17th, 2021
Nursing
Writer went above and beyond. Can't believe how much work they put in for the price.
Customer 452707, July 10th, 2022
Nursing
Not all sources were " American sources" as directed
Customer 452615, September 16th, 2021
Nursing
Thank you for helping with my assignment.
Customer 452707, July 8th, 2022
Nursing
Awesome work!!!!!!
Customer 452453, March 24th, 2021
Nursing
Great work! Thank you so much.
Customer 452707, July 15th, 2022
Other
GREAT
Customer 452813, June 25th, 2022
Other
Thank you for a well written paper!!!
Customer 452557, January 19th, 2022
Social Work and Human Services
Excellent Work
Customer 452587, November 22nd, 2021
Other
GOOD
Customer 452813, July 5th, 2022
Nursing
Perfectly done! Thanks again.
Customer 452707, July 18th, 2022
Criminal Justice
always great!
Customer 452465, February 23rd, 2021
11,595
Customer reviews in total
96%
Current satisfaction rate
3 pages
Average paper length
37%
Customers referred by a friend
OUR GIFT TO YOU
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat