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Brett, in his first year as a CPA with the firm Dewy, Cheatem, and Howe, is auditing a bank client. Last month Brett audited another firm called HoBoy Distributors. As Brett works on his bank audit, he notices that there are discrepancies between the financial statements supporting a bank loan to HoBoy Distributors and what he saw on his audit of that company. When Brett calls the CFO for HoBoy and informs him of the discrepancies, the CFO becomes evasive. The next day HoBoy’s CFO informs Dewey, Cheatem, and Howe that their company has decided to engage another CPA firm. Brett should: Pick one of the following answers and briefly explain to justify your answer.
a. call the CFO and try to persuade him to change the loan application.
b. alert his bank client of his suspicions.
c. do nothing.
d. hint to the bank of his suspicions.
e. report the information to Dewey, Cheatem, and Howe.
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