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As an auditor, what issues would you have identified at this point and why?

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Did the audit team do a good job up to this point of the audit? Is there anything you would have done differently if you would to assume any role in the audit team? Why?

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What are some ethical issues noted from this part of the movie?

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What is your takeaway from this movie?

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Valuation Assertion lol

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-impairment due to technology becoming obsolete

-difficulties in getting large cashflow

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-there was no written assurance that one of the director had no connection to primetel

-board of directors are having office politics clouding judgement (biasness)

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impairment of assets/technology

S1A to C

Fraud

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The external auditor say they find professional IT people then the 3 products are similar then the internal people say they are not similar

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high audit risk due to management taking risks about the technology safety (control risk)

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one of the directors has a suspicious connection with a company?

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problems in obtaining big cashflow

high inherent risk

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the audit head was only given verbal assurance by the IT expert, and brushed it off without really understanding the severity and complexity of the problem

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inherent risk that is too high and may seem like mistake is done on purpose

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-The auditing team should have looked further into Premintel. Especially about the assurances brought up during the drinks party

-The auditing team should have also probed further the company about their ability to pay on time

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Potential Issues with Board Governance

1. Lack of Disclosure:

There was no written assurance provided regarding a director's potential connection to Primetel.

2. Board Dynamics:

The board of directors appears to be affected by office politics.

This situation may be clouding their judgment and leading to biased decision-making

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impairment for S1A

whether it is reasonable for the development of S1A to use funds from the proceeds of S1B and S1C

cash flow issues

possibility of CEO committing fraudulent activities

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During like the drinking thing they had they oni had a verbal assurance instead of getting original document to prove payments for premantel

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-organisation plans to use the donation funds for their debt payments

Internal control risks

Impairment of S1A, S1B, S1C were not factored in

No proper of Segregation of duties ( Control risk)

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Fraud

The existence of Shell Company

Lack of funding / funding issues

No written assurances (eg report)

Unstable management leadership among Board of Directors members

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Impairment loss, Cyber Attack, Lack of funding

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Group 1

Sales for S1A is below expectations and lead to a write down .

Company engaged independent firm to test their product and found 50 issues.

Board of directors was incompetent in technology.

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Board of directors are experiencing tension between themselves and this leads to them being unable to come to a consensus.

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Bias was amongst the directors

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During the whole discussion, there was no written documents/ evidence that was presented and it was all verbal communication.

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Same company was in charge of setting up and testing the cyber defense system. This leads to a high risk that the system would not be able to defend from attacks. The system is high in value to the company. The IT dept also found 50 serious flaws in the systems.
As compared to the high revenue from S1A, S1B and S1C showed a trend of decreasing revenue. The management seems to have some pressure to maintain the sales of B and C.
The last part showed that the management is pressured to put their hands on the charitable donations.

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There is an inherent risk as there is a lack of integrity in the company’s management.

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Inherent risk : Risk that the company may included profit from elsewhere to make them look more profitable

Audit risk: The auditors never check for documentation, only did inquiry and nothing else. Doesnt answer assertions

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There was serious funding issues for S1A

Primentel might have some fraud 🚨

Impairment loss of S1A is calculated correctly

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lack of disclosure, no written assurance, impairment loss

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Impairment loss issue of software due to reduced valuation.

Assurance paperwork was not properly filed.

Verbal documentations instead of paperwork

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Time consuming doing the spreadsheets as that is part of the auditor's work scope as calculations for things were needed to be properly checked before submitting them

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Impairment of S1A and cash flow issues

Risk to cyber attacks

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Verbal assurance.

The company relied solely on verbal assurances without obtaining any physical evidence to substantiate the claimsThus, these verbal confirmations cannot be deemed reliable. Verbal assurances are inherently less dependable because they lack tangible proof and can be subject to misinterpretation. For an assurance to be credible, it should be supported by concrete evidence such as documents, records, or other verifiable data. Hence this poses a significant audit risk.

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Sam didnt go thru all the reports and lied about it

Maybe got fraud

The 2 people kissing might be the sister and the ex bro in law and if they still have some sussy relationship then got COI.

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No as cross check wasn’t done properly

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The audit team as a whole did a good job.

Dan should not have skipped out on report checking.

Development delay for D. Share value drops

Write down of tech value.

Picture taken of shareholder’s sister + Premintal’s Board of Director. Allegedly no family relations or connections. Divorce proof?

Premintel is a “supplier” that is a shell company

Integrity concern with family links and ownership of the company unclear. Are reports being produced for the amount paid or just a justification for money going though?

Never checked if the tech written in the reports make sense to be worth the cost justified especially when the payments increased this FY.

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we don't think the audit team did a good job

they are not communicating very well as a team and did not discuss before clarifying / talking to the client

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Did not do a good job. More check ins with the team should be done and more research should have been done before inquiry to ensure information received is actually useful and reliable.

Clearer instructions on what should have been done for the spreadsheets should also be given as the poor fella had no clue about what to do

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the auditor exercised professional skepticism

files were not thoroughly checked

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the guy should have checked the report instead of saying that he did when he didn’t

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The audit team did not do a good job because they relied a lot on inquiries instead of vouching to supporting documentation like reports and payment vouchers. If we were in the audit team, we would have asked for copies of all of the reports besides the verbal information received from the client itself.

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- Auditing team searched for document online instead of asking company members directly, which may be inaccurate as the documents may have been tampered before uploading online

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No, there were many questions unanswered and the client was rude and uncooperative. Audit team esp the higher position ppl should be more careful and meticulus.

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Did an okay job. Could have done more research especially about the family and ensure that the information recieved is usefula nd reliable before inquiry

The last guy did not check properly before coming up with a conclusion

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they did not communicate with their higher ups before making the next move, there was alot of miscommunications

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The auditors were inconsistent and still couldn't come to a consensus regarding the matter.

They only took into account the verbal confirmation and didn't investigate further.

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-Sarah shouldnt hv confronted the man so directly, she should have done more research and not depended on her colleagues research only.

-Dan did not finish his research properly so there might be chance for audit risk and he lied to his Joy that he was done giving a chance to potential audit risk.

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they should get Premintel to send back confirmation letters

the guy didnt read through the reports but said he did

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- the junior auditor did not finish reviewing the reports, and he reviewed it all by himself.

- guy kept assuring that he has no connection w premintel, but someone snap photo of the scandal

Audit team invited tech people from another company, not part of the audit team

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Independent technology expert to analyse the new carrying amount of the system

More payments made to Premintel
Searched ownership of Premintel after realising the abnormal payments.

The girl is not supposed to discuss confidential information in the hallway. She should find somewhere more official and then ask. For example, an office.

One of the members was still very unsure of what to do but after getting a call, he said that everything was done next morning. He might not have finished the report properly.

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Premintel

Audit firm did not receive reports from last yr.

When they Received assurances from the one of the directors that there were no family connection.

The audit firm should not have used word of mouth as reliable info for the audit .

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Family connections within the company were not declared. In the previous year audits, ownership of company were unknown as with relevant reports but the auditors did not flag out the issue.

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no the brother never finish looking through the documents but told his boss that he was done and the files were not checked properly before coming to a conclusion.

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The accountant did not go through the report fully and throughly, and left the reports out when he left “early” he then came in the next day and lied about going through it and said there was no problems.

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Auditor should check if there's no conflict of interest between parties, read and sign off all documents before leaving, check for written agreement rather than verbal

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The audit team should have assigned more than the one person, Dan, to perform auditing checks. Having multiple auditors would increase the likelihood of identifying errors and reduce the chances of overlooking potential mistakes. Additionally, the emotional involvement of Richard, who may have let emotions influence his judgment, might have introduced bias into the audit process, further increasing the risk of errors. Employing a more diverse team helps to mitigate these risks by providing a broader range of perspectives and minimising the impact of any individual biases.

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No they did not as they didnt submit the audit report on time as there was a delay and violated integrity. We should set a timeline for it so that it would be submitted on time and be honest about things as this would help our company have a good reputation.

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No reports were received by the company and should not have used word-of-mouth assurance

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Audit firm did not receive reports from the client after assurances from the client that there were no family connections .

Audit firm was pressured by the client to not look into the company.

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it was good that sarah had called up an independent tech expert to consult with the company's IT head.

however, the team should have verified with more information before asking the director such assertive & direct questions.

one of the audit members left & didn't finish his audit work.

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No as the communication among the team was not going well and there were still many questions are not answered by the client. One of the member did not check the reports but he told others everything was ok.

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Audit Team Performance

1. Overall Team Performance:

The audit team demonstrated commendable work as a collective unit.

2. Individual Responsibility:

Dan's decision to forgo the report verification process was an oversight.

This omission in Dan's duties stands out as an area for improvement

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bribe

blackmail

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Bribes over extramarital affairs and also to keep the stock price high.

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Ethic issues

Premintel is a shell company to be used for bribing interested companies to pick their product.

Using different agent to secure deals, trustable? No history we can

External auditors to uncover… nothing

Order cancellations due to?

Data is being stolen? From Dan’s reports that he didn’t check and left out.

February data attacks linked to order cancellation?

IT Project invoice? Different explanations for reasons to draw money out

Sighting of location of contractor office

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Tom was blackmailing Kris. Kris had conflict of interest.

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-blackmail

-sent reconfirmation to the 6 countries

-Report was not fully complete

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Blackmail ⚫️ ✉️

Bribery

Suppliers were not legitimate

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There was blackmail and falsification of transactions, along with the use of fake suppliers.

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the guy didn't go through the reports fully and lied about it

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blackmail

bribery

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- bribe

- blackmail

- bogus transactions with suppliers

- guy accepted contracts to generate revenue and keep stocks high

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An ethical concern was that the auditor must maintain independence from audit clients, this was not the case as Chris was threatened to comply. Chris was not objective in this case.

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kris was blackmailed because if his extramarital relationship and was made to approve a contract to make payments to another supplier

tom denied knowing about the payments to bogus suppliers

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bribery

blackmail

fraud

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Chris got blackmailed by tom and tom took bribes

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Richard and Tom with the bribery

Tom with his blackmailing of pictures

Richard authorising Tom to do it because of the pressure of the profits not making it

There was also opportunity for it to happen

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there was some form of bribery and fraud

they threatened & blackmailed Kris

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blackmail in order to get a contract

corruption

confidentiality

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Receive bribe

Blackmailing

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There was black mailing going in the company.

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Some shareholders only care about the profits they can receive.
Audit team just move on even when realising some was suspicious.
People could be threatened to fraud because of certain misconducts they have made.

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Bribery to official to secure contracts

Blackmail

Fraud company does not exist

Lying

Company feels pressured to keep up with high stock prizes

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The IT head was blackmailed.

There was bribery involved.

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Some members in the company are dishonest. Management board relied heavily on judgements and faith in employees. Possibility of blackmailing and bribery was ignored.

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the company using different agents is not trustable

bribery

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blackmail on that guy having an affair.

false suppliers that turn out to be fictional.

incomplete audit work.

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Bribery and discrimination

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corruption and bribery are involved

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Blackmail

Receiving bribes

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Learnt a lot about Audit in real life Situations, and to trust your instincts to flag things and cross check

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don’t do shady things, it’ll bite you on your a**

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We should work well as a team by communicating consistently with each other. We must have integrity and be honest about our task progress with our teammates.

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an auditor’s job is very crucial as it cross checks and makes sure that all accounts and amounts are correct

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i learned about the difference between an accountant and an chartered accountant

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I learnt the importance of being an independent and objective accountant.

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Don't do things that will affect yourself as well as others :D

Say no to blackmailing :DDD

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i learnt more about unethical behaviour in audit

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In the real world many things could happen and many unethical things could happen. Must be cautious and careful when performing audit