What steps would you consider taking to investigate claim

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Reference no: EM132194814

The Audit Firm is engaged to audit the financial statements of the Public Company. In the course of the audit, the Audit Firm sees that revenues of $1 million dollars, which comprised 75% of the annual revenues, were recognized on 12/31/2016, which is the last day of the fiscal year. The Audit Firm asks for backup, and is provided with copies of purchase orders, delivery receipts, and invoices from the Public Company's CFO. These documents reflect that the produce was delivered and paid for by 12/31/2016. The Audit Firm sends out confirms to the customer for confirmation. The customer says that the produce was not delivered until January 2, 2017, AND that the customer actually paid $2 million for the product.

1. Identify each relevant SEC statutory provision.

2. In particular, discuss (a) the possible violations; and (b) what you would recommend that the Audit Firm do (and why) if you are asked to provide guidance.

3. What steps would you consider taking to investigate the claim that the customer paid $2 million for the product if you worked for the Audit Firm or a regulator.

Reference no: EM132194814

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