Group assignment
Texto del Guión Gráfico
- Diligence Department
- Daniel
- Alice
- Let's dive deeper into these transactions...
- Okay. Let's check their compliance with laws and regulations.
- We've completed our initial evaluation. There are several areas of concern that we need to discuss.
- Nick
- Of course, Nick. I’m open to discussing any aspect of our books. Ensuring compliance with accounting standards is paramount to us.
- Ben
- Shall we discuss matters that concern the last financial report? There are a few areas where we might need more clarity to assess compliance and risk
- Thank you, Nick. We appreciate the thoroughness and look forward to reviewing the engagement letter.
- We will prepare the engagement letter and send it by next week for your review. We look forward to working with you.
- Okay! I’ll ensure we have all the documentation ready and assist the auditors in every way to facilitate a smooth audit process.
- Mary
- Harmony Healing is a provider of health insurance. Because the former auditing partner had already completed the maximum number of auditing years mandated by the Corporations Act, Harmony Healing has enlisted WiseChoice Audit Consultants as their new partner (CORPORATIONSACT 2001 - SECT 324CK)
- Engagement Letter
- Daniel and Alice are employed in the due diligence department at WiseChoice Audit Consultants. They investigate the reputation of their clients and the threat of any ethical or compliance risks.
- In order to detect any irregularities that would point to misconduct, Daniel and Alice are also going over the client's financial statements from the previous three years.
- Of course. I’m happy to run you through our processes.
- Mary, could we start with a comprehensive walkthrough of your business operations? Understanding the IT controls will be crucial for our audit.
- Daniel and Alice have a meeting with Nick, the audit engagement manager, to discuss their findings of the client evaluation.
- OH NO
- After reviewing the research report prepared by Daniel and Alice, Nick arranged a meeting with Ben, the CFO of Harmony Healing. The purpose of the meeting is to ensure the reason for switching auditors and to address questions regarding the previous financial report.
- ？
- The meeting runs smoothly, and Nick looks positive about working with Harmony Healing. Nick tells Ben that if everything goes well, Nick will send an engagement letter by the end of next week.
- That's alarming. Can you provide the details and evidence you've found?
- Nick, I've discovered evidence of a significant cyber-attack
- -Mary, the finance department manager, is assigned the duty to assist the auditors in ensuring a smooth audit.-She provides documentation proof to the questions about the audit and she also provides detailed breakdowns of calculations.
- Mary, the upcoming audit is critical for us. I need you to take the lead in coordinating with the auditors and providing them with all the necessary information.
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- After a few days, with the approval from the Audit Partner, Nick sends the engagement letter to Harmony Healing and they both finish signing the agreement. Harmony Healing transfers the related fee to the Auditing firm.
- →×9M
- Monica is a dedicated employee who has worked at WiseChoice Audit Consultants for 6 years. She is a skilled expert in information systems and is primarily responsible for auditing the cyber security section of this engagement.
- Monica
- Monica and Mary conduct a walkthrough of the company’s processes, allowing Monica to gain a better understanding of the IT application and general controls.
- After a thorough investigation, Monica discovered that Harmony Healing had suffered a cyber attack, and no one in Harmony Healing’s IT department has ever reported this.
- We believe there could be a mutually beneficial solution
- Exactly. We're prepared to offer $100,000 and more contracts with our subsidiaries, ensuring a long-term partnership with your firm.
- However, when Monica tested the data security checker, she discovered that several key components were missing and did not even match the actual records.
- How did it come to this? Bribery is not just illegal; it's a breach of trust.
- Monica immediately reports the problem to his supervisor, Nick. Nick is shocked upon hearing this news. He asks Monica to give him the related evidence so that he can cross check the report.
- Accepting this bribe would compromise everything I stand for as an auditor. My integrity and the firm's reputation are at stake.
- Initially, Nick and his team notice excess compensation payments that Harmony Healing paid to their customers consistently mismatch the documented record. This problem leads to an exceedingly unusual and overstated expense.
- These figures in the compensation payments don't match our records. It’s significantly higher than expected. We need to investigate this further
- After further investigation, Nick realises that the problem was far more serious than he thought. He found that the cyberattack involved a breach of information on at least 9 million customers, including their identities, health insurance card records, etc
- -It is highly likely that the hackers utilized this information to fabricate medical records of customers, deceiving Harmony Healing into making compensation payments. -This resulted in a significant increase in the number of claims for Harmony Healing over the past year, leading to incurred losses in their financial performance.
- INFORMATION
- Nick arranges an urgent meeting with Ben and Mary.Ben and Mary don't appear to be aware of this problem. Yet strangely, they don't appear to be stressed.
- This is quite concerning, Nick. We were unaware of such an attack. We'll need to investigate this further and work closely with your team to mitigate the risks and resolve the issues.
- However, after a few days, the solution proposed by Ben and Mary turned out to be an attempt to bribe Nick and Monica.
- -After hearing this, Nick is petrified and looks at handling the situation diplomatically.-He realises that this matter needs to be escalated and plans to report to the Audit Partner.
- -Nick knows these “sweet treats” are perceived as Independency threats if WiseChoice accepts the offers.-He recalls that he has been working so hard to get his CA Membership and he is not going to let anyone ruin his accounting career.
- I've worked too hard to earn my CA membership and position. I can't let this incident tarnish my career or the ethical standards of our profession.
- I have evidence of an attempted bribe by Harmony Healing to influence our audit findings.
- Harmony Healing must urgently address cybersecurity issues; our report will reflect the true financial condition, adhering to the highest auditing standards.
- Email to Harmony Healing
- If you don’t align with our interests, we’ll ensure Harmony Healing's network makes it difficult for your firm to find future clients.
- We will be reporting on what Harmony Healing did.
- When Nick returns to the company, he immediately reports to this incidence. Such dishonest and unethical behavior angered the Audit Partner.
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- The Partner sends a letter to Harmony Healing , emphasising that his firm will only provide reports that are "truthful and fair" and that the company submit a report stating corrective measures to fix the cyber security controls as previous recommendations.
- Ben is angered by the letter and intimidates WiseChoice, stating that if they do not cooperate, they will ensure that WiseChoice will not find any other clients in the industry in the future.
- WiseChoice in response, decides to raise charges of bribery, independence threat and unprofessional code of conduct, on top of an IT security breach that needs to be reported, as they have signed off as the Audit Partner to Harmony Healing.
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