... a client 2.1. Factors that may lead to potential risks in Murphy's auditing engagement Firstly, there is problem of integrity. Integrity deals with the issue of whether the management of the company possesses adequate integrity to free from material fraud and/or illegal acts (Knechel, 2001). Although there are not directly issues related to integrity problems in MTS, the records of MIC, in which Jake is also a majority shareholder, in the state Insurance Commissioner suggest high possibility of integrity problems existing in MTS as well. Secondly, there are problems of reputation and image. The local auditing firms hold contradictory views regarding the audit engagement of MTS, one firm rejected but another firm took it seriously. That at least indicates MTS does not create a universal accepted good image in the business world. Similarly, while Jake is famous for his success in his professional commercial activities, such as the dramatically profits generated from ...

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