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Should auditors go "extra step" in auditing investments?

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Please help me to answer this question:
Sometimes, auditors will become comfortable with their client and will not go that "extra step" to ensure that everything is going as it should be. Smalley performed audit tests and collected evidence. BUT, he didn't go that extra step to ensure that the investments were stable. Should he have done this? Should Crenshaw have been monitoring his investments more closely? Who was at fault here?

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Solution Summary

This 72 word solution discusses and explains when the auditor has a duty to go that "extra step."

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Auditors are required to assess inherent and control risk prior to gathering evidence. This risk assessment during the ...

Solution provided by:
Carol Sargent, PhD
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  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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