14: Remaining Skeptical and Firm Dr. Donald L. Ariail, CPA, CGMA, CFF Southern Polytechnic State University 111 LEARNING OBJECTIVES After completing and discussing this case, you should be able to Appreciate the value of being skeptical. Understand the process of an inventory count. Observe the pressures placed upon an auditor. A young staff accountant, Sam Adder, was assigned to observe a year-end inven- tory count. The client under audit was in the business of selling oil packaged in standard sized drums. On arriving for the inventory observation and counting as prescribed by Generally Accepted Auditing Standards (American Institute of Certified Public Accountants, 2011, AU Section, 331), the young accountant found a warehouse full of sealed drums stacked from floor to ceiling. The CPA firm's observation procedures specified that not only must the count be observed, but also that a spot check must be made of a small sample of the drums to verify that they actually contained an oil-like substance. After observing the inventory count, Sam randomly selected a few easily reachable drums for the content check. The warehouse manager assigned to as- sist with the observation reluctantly broke the seals on the selected drums, and the accountant verified that they held a substance which appeared to be oil. The accountant then requested that a forklift be used to remove a stack of drums so that one close to the bottom of a stack could be opened and checked. The ware- house manager, who had worked for the client company for many years and was much older and more experienced than the accountant, refused to dismantle the stack and stated that he had already broken enough seals and that it was a waste of time and money for him to break any more. He declared that prior auditors from the accounting firm had never been so unreasonable, and he implied that request was due to the accountant's inexperience. He told the accountant to with what you have." the "just go What should Sam do