The Knottyville Country Clud wants to construct an $8 million addition to the clubhouse. They have approached ABC Bank. The bank required the Club to get an external audit done by a CPA firm for years 2005 and 2006. You have been hired as the auditor. Hint: Read SAS No. 99 first.
A. List the risk factors(red flags) for asset misaapropiation that are present in the case.
B. What audit procedures would you perform to make sure that there was no embezzelment?