Assume the controller is very defensive and fails to provide acceptable responses to the questions raised by Norris. Norris is concerned about the ability of the firm to complete the audit on time and under budget. She knows she has to do something to alleviate the tension that has developed with the controller and ensure that the audit comes to a successful conclusion. However, she is not sure how best to get it done. Answer the following questions:
• What role does ethical leadership play in the way Norris deals with the conflict? Consider how the way she handles the matter might influence the behavior of members of the firm.
• What levers can Norris use to convince the controller of the need for better cooperation to ensure successful completion of the audit?
• Why wasn't $1 million revenue recorded in 2016 for a December 31, 2016, transaction whereby Rhody agreed to sell $1 million of software to Ocean State Electronics in return for a stock issuance of that company? Ocean State, in return, agreed to sell $1 million of similar software to Rhody on January 5, 2017, in return for a stock issuance from Rhody.
• Why does the firm need to do additional testing of the collectability of receivables beyond that included in the original audit plan?
• Why has the firm hired a consultant to help with the audit of the company's information systems?
• What are the most persuasive arguments Norris can make of the reasons and rationalizations that may be provided by the controller in discussing/defending his positions?