Reviewing unusual entries to expense accounts is an important audit procedure that is sometimes overlooked, or that is not conducted with professional skepticism. Refer to the Auditing in Practice feature "WorldCom and Unusual Adjusting Entries," which explains how WorldCom executives used unusual journal entries to perpetrate their fraud.
a. What is unusual about the journal entry in this Auditing in Practice feature?
b. If confronted, do you think that management at WorldCom would have some reasonable, or at least plausible, explanation for the entry? Explain.
c. Imagine yourself as a young auditor that discovers this unusual entry and inquires about it with someone at the client. What factors might cause you to lack professional skepticism in evaluating the client's explanation?