2â38. Hide-It (HI), a family-owned business based in Tombstone, Arizona, builds custom homes with special features, such as hidden rooms and hidden wall safes. Hide-It has been an audit client for three years. You are about to sign off on a âcleanâ opinion on HIâs current annual financial statements when Art Hyde, the VP-Finance, calls to tell you that the Arizona Department of Revenue has seized control of a Hide-It bank account that includes about $450,000 of company funds;the account is not currently recorded in the accounting system and you had been unaware of it. In response to your questions about the origin of the funds, Art assures you that the funds,though not recorded as revenue, had been obtained legitimately. He explains that all of the money came from seperately billed but unrecorded change orders to items in contracts completed before you became HI’s audit orm and before he or any members of current management became involved with the company.
