Reference no: EM133149555

Question - Cash Won't Balance - You are the outside CPA of a hospital. Part of your duties is to reconcile co-payments from patients and their families to what was deposited in the bank and to the general ledger. You are very careful and always balance to the penny. Or so you thought.

One Friday before a holiday weekend it was particularly busy and, as usual, at the end of the day, you balance the cash. This time, however, you find that the balance is exactly $1,000 short of what was expected. Since it is Friday afternoon, there is nobody in the office to call and the financial statements are due on Monday morning. Perhaps there is a reasonable explanation, but you need to do some research in order to discover what it may be. In order to understand the mystery, you attempt to contact the cashier, who, naturally, just left for the long weekend. If you report the shortage, the cashier most likely will be terminated. If you do not reflect the shortage on the financial statements, they will be misleading. How would you handle this delicate situation?