Reference no: EM131713347

Question: Almost Over the Line? The accounting firm of Glofry and Tammar (G&T) has been asked to arrange for a $2 million loan for Tang Enterprises by its client Ted Hoover at Hoover Company. Hoover Company is involved in a number of different business operations and has a net worth of $20 million. A senior partner at G&T instructed Henry Morgan, a G&T accountant, to make sure that the loan was secured by collateral. Tang forwarded ownership shares from a foreign company as collateral for the loan. Upon investigation, it was determined that these shares were worthless. Tang Enterprises then sent prime bank guarantees that-had a fair value of $5 million. Upon the receipt of the guarantees, Glofry and Tammar arranged for the transfer of the money to Tang. A month after the money had been transferred to Tang, Ted Hoover asked G&T for a letter to certify the authenticity of the bank guarantees so that they could be sold. What should the accounting firm of Glofry and Tammar do under these circumstances?