Boston Public School Follow-Up Audit Case
1. Prescriptive
Issue: Should the follow-up audits be done to ensure the foundation used by Boston Public School are clear, publicly, available guidelines on how it spends its money in the future?
Conclusion：Yes, the the follow-up audits should be done to ensure the foundation used by Boston Public Scholl are clear, publicly, available guidelines on how it spends its money in the future.
Reasons: 1. Once the money was in the charity’s accounts, it was not subject to the same level of scrutiny as the system’s general fund. So, the Boston public school’s use of funds had a troubling lack of oversight. 2. Although the BPS solved the problems by setting up special revolving funds, the foundation still exists and raises money …show more content…
2. When fraud is discovered, clients may question why a CPA did not discover the frauds earlier. While adherence to professional standards assists CPAs in defending these claims, there is no guarantee that such a defense will be successful. 3. The lack of an engagement letter memorializing the scope and limitations of services performed and management’s responsibilities was detrimental to the CPA’s defense. 4. CPAs can use several techniques to protect themselves against risk exposures related to failure to detect theft and fraud. a CPAs can regularly evaluate the risk of the client and the engagement to protect themselves against risk exposures related to failure to detect theft and fraud. b A well crafted engagement letter can help reduce expectation gaps and can serve as key evidence in the defense of a professional liability claim. So, CPAs can use engagement letters on all engagements to protect themselves against risk exposures related to failure to detect theft and fraud. c CPAs can stay within the scope of an engagement to protect themselves against risk exposures related to failure to detect theft and
Issue: Should the follow-up audits be done to ensure the foundation used by Boston Public School are clear, publicly, available guidelines on how it spends its money in the future?
Conclusion：Yes, the the follow-up audits should be done to ensure the foundation used by Boston Public Scholl are clear, publicly, available guidelines on how it spends its money in the future.
Reasons: 1. Once the money was in the charity’s accounts, it was not subject to the same level of scrutiny as the system’s general fund. So, the Boston public school’s use of funds had a troubling lack of oversight. 2. Although the BPS solved the problems by setting up special revolving funds, the foundation still exists and raises money …show more content…
2. When fraud is discovered, clients may question why a CPA did not discover the frauds earlier. While adherence to professional standards assists CPAs in defending these claims, there is no guarantee that such a defense will be successful. 3. The lack of an engagement letter memorializing the scope and limitations of services performed and management’s responsibilities was detrimental to the CPA’s defense. 4. CPAs can use several techniques to protect themselves against risk exposures related to failure to detect theft and fraud. a CPAs can regularly evaluate the risk of the client and the engagement to protect themselves against risk exposures related to failure to detect theft and fraud. b A well crafted engagement letter can help reduce expectation gaps and can serve as key evidence in the defense of a professional liability claim. So, CPAs can use engagement letters on all engagements to protect themselves against risk exposures related to failure to detect theft and fraud. c CPAs can stay within the scope of an engagement to protect themselves against risk exposures related to failure to detect theft and