The case of the incendiary audit
Ethics
Charles Selcer, CPA, MBA | April/May 2023 Footnote
Editor's note: Updated March 29, 2023
Arson Welles is a very creative entrepreneur. His latest idea was to open an amusement park, Arson Welles’ Pyro Park. It’s a place where people who greatly enjoy lighting things on fire can — for an admittance fee of $100 — receive large farmer’s matches and can, from a safe location, toss lit matches at different venues (a barn, a house, a bus, a warehouse or a CPA office) and watch them ignite into explosive flames. After 45 seconds, an automatic system extinguishes the flames.
The amusement park cost quite a bit to construct and the bank that provided financing asked for an audited financial statement.
During its audit, the CPA firm noted that flammable compounds were improperly stored and flushed into the soil.
Q. Is this beyond the scope of the audit?
A. No. On the face, this appears to be a NOCLAR, which includes environmental protection laws as an item auditors should consider. See 1.180.010. The NOCLAR section of the Code is effective June 30, 2023, with early implementation allowed.
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