ABSTRACT
On her own, a young auditor implements a new, more robust revenue recognition cut-off test not in the audit plan that shows a multi-million-dollar error in her client’s annual revenue number. But neither her client nor the partner in her firm believes her results, in large part because a problem like that would have gone on undetected for many years in the client’s financial statements. Even after repeated tests with different and larger samples but similar results, she is unable to convince either the client or her partner of the problem. The stakes are high because the client is in the process of launching an initial public offering (IPO). What should she do?
