Carolina Wilderness Outfitters Case Study

The case study depicted several issues that raised many questions unanswered especially regarding the recent termination case. In accordance to the case study, Tel & Tel (Carolina Wilderness Outfitters’ hotline service) received a call from a former employee trying to report discrimination issue in the management and also hinted a fraudulent act. Therefore it is wise for Ramos to investigate further into the matter. She should perform necessary audit procedures and collect all possible evidence to resolve problem.
First of all, Ramos should start with Koster as she is the one who brought up the issue she had with the management. She also implied what seems to be a fraudulent act was exercised by some of top employees of the company. Koster
As the head of Internal Audit department, every course of action make by Ramos will resulted in the reaction of Dawson (CEO). This is because Dawson is the leader of executive team in Carolina Wilderness Outfitters (CWO) as she has the ultimate responsible for making the strategic decision in the company. However, in this case of red flags situation Ramos should not consider how Dawson might react towards her course of action. The reasons for this decision are as stated below. The first reason is because of the role of audit committee. The choice of Ramos is to bring those red flags to the attention of audit committee, it is the correct reporting pathway. This is because the internal audit functions have a functional reporting relationship to the audit committee as stated in charters of internal audit. Audit committee main responsibility is to monitor the financial policies and procedures of the organization such as accounting policies and internal controls. Audit committee is the one that will review and approve the audit plan of internal audit function. As long as Ramos has prepare a formal report regarding to matters of concern to the audit committee and approved, she can be sure that audit committee will bring up those red flags to the Board and management during meetings. Dawson will be informed by audit committee regarding the red flags raised. Hence, it is not necessary for Ramos to consider the reaction
If Dawson support Ramos, she may have more resources to collect all the evidence. If Dawson not support and request Ramos to stop, Ramos should consider alternative ways to collect the required data from other sources. This is depicted in the case of Worldcom Saga. The vice president of internal audit – Cynthia Cooper decided to investigate anomalies in the company’s accounting entries. Although, the CFO – Scott Sullivan had chided Cynthia for snooping around the accounting treatment, but she and her team still working on it behind the closed door. Ultimately, her team had successfully revealed the massive fraud that result in the biggest bankruptcy in U.S