73% D ....o T-Mobile LTE 8:19 PM CASE 6.4 Tommy O'Connell,Audit Senior Tommy OConnell had been a senior with a Big Five accounting firm for less than one month when he was assigned to the audit engagement for the Altamesa Manufacturing Company Tommy worked out of his firm's Fort Worth, Texas, office, while Altamesa was headquartered in Amarillo, the capital of the Texas Panhandle. The young senior realized that being assigned to the tough Altamesa engagement gnaled that Jack Morrison, the Altamesa audit partner and the office managing partner, regarded his work highly Serving as the audit senior on the Altamesa job would allow Tommy to become better acquainted with Morrison. Despite the challenges and opportunities posed by his new assignment, Tommy did not look forward to spending three months in Amarillo, a five-hour drive from Fort Worth.This would be his first assignment outside of Fort Worth since his marriage six months earlier He dreaded breaking the news to his wife, Suzie, who often complained about the long hours his job required Altamesa manufactured steel girders used in the construction and renovation of bridges in West Texas, New Mexico, Colorado, and Oklahoma The company's business was very cyclical and linked closely to the funding available to municipalities in Altamesas fourstate market area. To learn more about the company and its personnel, Tommy arranged to have lunch with Casi McCall, the audit senior on the Altamesa job the two previous years.According to Casi,Altamesa's management took aggressive positions regard yearend expense accruals and revenue recognition The company used the percen ompletion method to recognize revenue, since its sales contracts extended over two to five years. Casi recounted seve disputes with the company's chief accountant regarding the estimated stage of completion of jobs in progress. In an effort to "front-load'as much of the profit o jobs as possible, the chief accountant typically insisted that jobs were further along han they actually were. Speaking with Casi made Tommy even more apprehensive about tackling the an excellent chance to he realized that the job gave hi Altamesa engagemen rengthen his fast-track image within his office. To reach his goal of being promoted manager by his fifth year with the firm, Tommy needed to prove himself on to difficult assignments such as the Altamesa engagement. An Unpleasant Surprise for Tommy It was late May, just two weeks before Tommy would be leaving for Amari the Altamesa audit-the a company had June 30 fiscal yearend. Tommy Jack Morrison, and an audit manager were having lunch at the Cattleman's Restaurant i n district of north Fort Worth "Tommy I've decided to send Carl with you out to Amarillo, ls that okay asked Jack Morrison hh ...sure, Jack Yeah, that'll be fine Tommy replied The facts of this case were reconstnacted from an actual series of events Names and certain lommation have been changed to conceal the identities of the individuals involved