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Part 1 You are an internal auditor for Trek Sdn Bhd (Trek), a local, nonpublic company involved in the manufacturing of trek bikes. During
Part 1 You are an internal auditor for Trek Sdn Bhd (Trek), a local, nonpublic company involved in the manufacturing of trek bikes. During the current year under audit, you verified the cost of fixtures installed in Trek by examining purchase orders, invoices and other documents. The verification brings to light an understated invoice received earlier during the year in which a clerical error by the overseas supplier, Western Showcase, Inc., caused the total of the invoice to read USD28,893.62 when it should have read USD82,893.62. The invoice was paid immediately upon receipt without any notice of the error, and subsequent statements and correspondences from Western Showcase, Inc. showed the account with Trek had been paid in full. Required: a) What would you do (if any) in this situation? Explain your answer. (5 marks) b) If Western Showcase's external auditors failed to detect the misstated invoice during their present interim audit, assuming that the management of Trek Sdn Bhd is highly unethical, will Trek Sdn Bhd be able to escape paying for the under-billing if this invoice is later on discovered by their external auditors? Explain your answer. (Ignore materiality). (6 marks) c) Assuming that you decided not to do anything in (a) above, if, later during the year, you resigned from Trek Sdn Bhd and migrated to the United States and joined Western Showcase, Inc., would you utilize the information gained while working for Trek Sdn Bhd to initiate a reopening of the case with Trek Sdn Bhd? Explain your answer. Part 2 (4 marks) Finish at
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