In: Accounting
In July, 2006, a member of the audit team auditing Belhaven University’s annual report was carrying his laptop while walking to his car parked in the street. He was mugged and his wallet and laptop was stolen. The laptop contained audit documentation with sensitive personal information about employees, including their social security numbers. According to Belhaven’s president, Roger Parrott, the stolen computer had “several sophisticated levels of security” and it was unlikely that the thief would be able to extract any information. (1) Do you think that the auditors violated GAAS by allowing the information to be stolen? Why or why not? (2) Since a laptop might get stolen (or simply crash), what steps do you think an auditor should take to prevent losing the information in it?
GASS (Generally Accepted Auditing Standards) contain three types of standards:
A General Standards:
B. Standards of Field Work
C. Standards of Reporting:
The auditors did not violate GAAS . As per GASS they need to take due professional care which they had taken. Loss of laptop was beyond their control.
(2) To prevent loss or theftof laptop , the auditors shouldmaintain a backup .
Everyday after completion of work and before leaving the office they can take a backupin a separate medium like CD or removablehard disk. This can be kept under lockand key in the office or carried by another partner separately