Please see file attached.
During the audit of a closely held corporation the junior member of the audit team discovers an anomaly in the books which suggests that certain corporate officials may be laundering overseas money in the company's international sales operation. The junior auditor suspects that the senior member of the team is aware of the issue which apparently has been going on for some time. The company is a major client of the auditors.
1. What action do you believe the junior auditor should take? Justify your answer.
There are several actions that the junior auditor can take. First, he should find out more details about the money laundering business in full. Then he should accumulate incriminating evidence that such an activity is actually taking place. Finally, he should inform of these activities to the senior partner of the audit firm that such an activity is going on. If ...
The solution answers the question(s) below.