Phil Scranton is the auditor-in-charge of an audit of corporate research and development of Faecit Metals Company. Phil and his team of two staff auditors have just completed their exit conference with Henry Wilson, director of research and development, and his assistant, Antonio Calontino. The auditors felt that the documentation of the various research projects was inadequate in terms of allocating their costs and identifying future potential benefits. Several specific audit recommendations were given at the exit conference through the presentation of the audit report. Both Wilson and Calontino argued vigorously with Scranton and vowed to ignore the recommendations. They failed to make any response to the audit and continued to conduct the affairs of the research and development center as before. The auditors tried to set up meetings for a follow-up review and to persuade Wilson to respond to the audit in writing. These efforts were ignored. Finally, Wilson told his secretary not to accept any calls from the auditing department and to return any interoffice memoranda or other written communication from the auditing department.

When top management requested information about the conclusion of the audit, the auditors explained that they were meeting stiff opposition from the auditee, who refused to participate in any follow-up procedures. Kell McDugan, vice president of operations, sent word to the director of the internal auditing department that a team of auditors absolutely must visit the R&D center to see what, if anything, was being done to correct the problems found during the audit. Further, McDugan said, if Wilson and Calontino were unwilling to fix the problems, the auditors should undertake their own corrective measures and inform the R&D managers that “McDugan sent word that you can either do what the auditors say or take a permanent walk.”

Required:
Identify which of the four benefits of proper role fulfillment in follow-up reviews are in jeopardy in this case. Explain your answer for each one.