Alternative Courses of Action
- Madison Wells declines or perhaps asks for another audit manager to be the audit manager for
the unexpected engagement with Le Prix.
This is because Madison Wells has assessed this engagement to be high risk in nature. Another
reason is her lack of experience with this type of industry in which any mistakes for this audit
engagement could result in an incorrect audit opinion due to ineffective audit procedures caused
by lack of experience on the oil and gas industry.
- Madison Wells does the audit procedures with more caution considering that the audit
engagement is considered high risk.
As stated in the case, had Madison Wells thoroughly checked the workpapers with the right
document, they would have known about the violations of Le Prix on the revised debt covenants
imposed by the client’s principal lender.
- Madison Wells asks William Blackwell for any significant audit findings as the former
supervising audit senior of the engagement.
With this, Madison Wells might have known more information about Le Prix's debt covenant
during the time William Blackwell made the spreadsheet. Wells could have known about the basis
for Blackwell’s working papers which was the old loan agreement.