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- 5. Chapter 7 Solutions Auditing Information Technology-Based Processes Turner/Accounting Information Systems, 2e Solutions Manual Chapter 7 Concept Check 1. b 2. b 3. d 4. c 5. b 6. a 7. c 8. b 9. d 10.a 11.a 12.c 13.c 14.d 15.c 16.a 17.c 18.a 19.a 20.c 21.d Discussion Questions 22.(SO 1) What are assurance services? What value do assurance services provide? Assurance services are accounting services that improve the quality of information. Many services performed by accountants are valued because they lend credibility to financial information. 23.(SO 2) Differentiate between a compliance audit and an operational audit. A compliance audit is a form of assurance service that involves accumulating and analyzing information to determine whether a company has complied with regulations and policies established by contractual agreements, governmental agencies, company management, or other high authority. Operational audits assess operating policies and procedures for efficiency and effectiveness.
- 6. Chapter 7 Solutions Auditing Information Technology-Based Processes 24.(SO 2) Which type of audit is most likely to be performed by government auditors? Which type of audit is most likely to be performed by internal auditors? Governmental auditors are most likely to perform compliance audits, and internal auditors are most likely to perform operational audits. 25.(SO 2) Identify the three areas of an auditor’s work that are significantly impacted by the presence of IT accounting systems. The IT environment plays a key role in how auditors conduct their work in the following areas: • consideration of risk • determination of audit procedures to be used to obtain knowledge of the accounting and internal control systems • design and performance of audit tests. 26.(SO 3) Describe the three causes of information risk. Information risk is caused by: • Remote information; for instance, when the source of information is removed from the decision maker, it stands a greater chance of being misstated. • Large volumes of information or complex information. • Variations in viewpoints or incentives of the preparer. 27.(SO 3) Explain how an audit trail might get “lost” within a computerized system. Loss of an audit trail occurs when there is a lack of physical evidence to view in support of a transaction. This may occur when the details of accounting transactions are entered directly into the computer system, with no supporting paper documents. If there is a system failure, database destruction, unauthorized access, or environmental damage, the information processed under such a system may be lost or altered. 28.(SO 3) Explain how the presence of IT processes can improve the quality of information that management uses for decision making. IT processes tend to provide information in a timely and efficient manner. This enhances management’s ability to make effective decisions, which is the essence of quality of information. 29.(SO 4) Distinguish among the focuses of the GAAS standards of fieldwork and standards of reporting. The standards of fieldwork provide general guidelines for performing the audit. They address the importance of planning and supervision, understanding internal controls, and evidence accumulation. The standards of reporting address the auditor’s requirements for communicating the audit results in writing, including the reference to GAAP, consistency, adequate disclosures, and the expression of an overall opinion on the fairness of financial statements. 30.(SO 4) Which professional standard-setting organization provides guidance on the conduct of an IT audit? The Information Systems Audit and Control Association (ISACA) is responsible for issuing Information Systems Auditing Standards (ISASs), which provide guidelines for conducting an IT audit. 31.(SO 5) If management is responsible for its own financial statements, why are auditors important? Auditors are important because they are responsible for analyzing financial statements to decide whether they are fairly stated and presented in accordance with GAAP. Since the financial statements are prepared by managers of the company, the role of auditors is to reduce information risk associated with those financial statements. To accomplish this, auditors design tests to analyze information supporting the financial statements in order to determine whether management’s assertions are valid.
- 7. Chapter 7 Solutions Auditing Information Technology-Based Processes 32.(SO 6) List the techniques used for gathering evidence. The techniques used for gathering evidence include the following: • physically examining or inspecting assets or supporting documentation • obtaining written confirmation from an independent source • rechecking or recalculating information • observing activities • making inquiries of company personnel • analyzing financial relationships and making comparisons to determine reasonableness 33.(SO 6) During which phase of an audit would an auditor consider risk assessment and materiality? Risk assessment and materiality are considered during the planning phase of an audit. 34.(SO 7) Distinguish between auditing through the computer and auditing with the computer. When are auditors required to audit through the computer as opposed to auditing around the computer? Auditing through the computer involves directly testing internal controls within the IT system, which requires the auditors to understand the computer system logic. Auditing through the computer is necessary when the auditor wants to test computer controls as a basis for evaluating risk and reducing the amount of audit testing required, and when supporting documents are available only in electronic form. Auditing with the computer involves auditors using their own systems, software, and computer-assisted audit techniques to help conduct an audit. 35.(SO 8) Explain why it is customary to complete the testing of general controls before testing application controls. Since general controls are the automated controls that affect all computer applications, the reliability of general controls must be established before application controls are tested. The effectiveness of general controls is considered the foundation for the IT control environment. If there are problems with the effectiveness of general controls, auditors will not devote attention to the testing of application controls; rather, they will reevaluate the audit approach with reduced reliance on controls. 36.(SO 8) Identify four important aspects of administrative control in an IT environment. Four important aspects of administrative control include: • personal accountability and segregation of incompatible responsibilities • job descriptions and clear lines of authority • computer security and virus protection • IT systems documentation 37.(SO 8) Explain why Benford’s Law is useful to auditors in the detection of fraud. Benford’s Law recognizes nonuniform patterns in the frequency of numbers occurring in a list, so it is useful to auditors in the identification of fabricated data within account balances such as sales, accounts receivable, accounts payable, cash disbursements, income taxes, etc. If fraudulent data are presented, they would not likely follow the natural distribution that Benford’s Law sets forth. 38.(SO 8) Think about a place you have worked where computers were present. What are some physical and environmental controls that you have observed in the workplace? Provide at least two examples of each from your personal experience. Student’s responses are likely to vary greatly. Examples of physical controls may
- 8. Chapter 7 Solutions Auditing Information Technology-Based Processes include card keys and configuration tables, as well as other physical security features such as locked doors, etc. Environmental controls may include temperature and humidity controls, fire, flood, earthquake controls, or measures to ensure a consistent power supply. 39.(SO 8) Batch totals and hash totals are common input controls. Considering the fact that hash totals can be used with batch processing, differentiate between these two types of controls. Both batch totals and hash totals are mathematical sums of data that can be used to determine whether there may be missing data. However, batch totals are meaningful because they provide summations of dollar amounts or item counts for a journal entry used in the financial accounting system, whereas hash totals are not relevant to the financial accounting system (i.e., the hash totals are used only for their control purpose and have no other numerical significance). 40.(SO 8) The test data method and an integrated test facility are similar in that they are both tests of applications controls and they both rely on the use of test data. Explain the difference between these two audit techniques. The test data method tests the processing accuracy of software applications by using the company’s own computer system to process fictitious information developed by the auditors. The results of the test must be compared with predicted results. An integrated test facility also tests processing applications, but can accomplish this without disrupting the company’s operations. An integrated test facility inputs fictitious data along with the company’s actual data, and tests it using the client’s own computer system. The testing occurs simultaneously with the company’s actual transaction processing. 41.(SO 9) Explain the necessity for performing substantive testing even for audit clients with strong internal controls and sophisticated IT systems. Since substantive testing determines whether financial information is accurate, it is necessary for all financial statement audits. Control testing establishes whether the system promotes accuracy, while substantive testing verifies the monetary amounts of transactions and account balances. Even if controls are found to be effective, there still needs to be some testing to make sure that the amounts of transactions and account balances have actually been recorded fairly. 42.(SO 9) What kinds of audit tools are used to perform routine tests on electronic data files taken from databases? List the types of tests that can be performed with these tools. CPA firms use generalized audit software (GAS) or data analysis software (DAS) to perform audit tests on electronic data files taken from commonly used database systems. These tools help auditors perform routine testing in an efficient manner. The types of tests that can be performed using GAS or DAS include: • mathematical and statistical calculations • data queries • identification of missing items in a sequence • stratification and comparison of data items • selection of items of interest from the data files • summarization of testing results into a useful format for decision making 43.(SO 10) Which of the four types of audit reports is the most favorable for an audit client? Which is the least favorable? An unqualified audit report is the most favorable because it expresses reasonable assurance that the underlying financial statements are fairly stated in all material respects. On the other hand, an adverse
- 9. Chapter 7 Solutions Auditing Information Technology-Based Processes opinion is the least favorable report because it indicates the presence of material misstatements in the underlying financial statements. 44.(SO 10) Why is it so important to obtain a letter of representations from an audit client? The letter of representations is so important because it is management’s acknowledgement of its primary responsibility for the fair presentation of the financial statements. In this letter, management must declare that it has provided complete and accurate information to its auditors during all phases of the audit. This serves as a significant piece of audit evidence. 45.(SO 11) How can auditors evaluate internal controls when their clients use IT outsourcing? When a company uses IT outsourcing, auditors must still evaluate internal controls. This may be accomplished by relying upon a third-party report from the independent auditor of the outsourcing center, or it can audit around the computer, or it can test controls at the outsourcing center. 46.(SO 12) An auditor’s characteristic of professional skepticism is most closely associated with which ethical principle of the AICPA Code of Professional Conduct? Professional skepticism is most closely associated with the principle of Objectivity and Independence. Professional skepticism means that auditors should have a questioning mind and a persistent approach for evaluating financial information for the possibility of misstatements. This is closely related to the notion of objectivity and independence in its requirements for being free of conflicts of interest. Brief Exercises 47.(SO 2) Why is it necessary for a CPA to be prohibited from having financial or personal connections with a client? Provide an example of how a financial connection to a company would impair an auditor’s objectivity. Provide an example of how a personal relationship might impair an auditor’s objectivity. An auditor should not have any financial or personal connections with a client company because they could impair his/her objectivity. It would be difficult for an auditor to be free of bias if he/she were to have a financial or personal relationship with the company or one of its associates. For example, if an auditor owned stock in a client company, the auditor would stand to benefit financially if the company’s financial statements included and unqualified audit report, as this favorable opinion could lead to favorable results for the company such as paying a dividend, obtaining financing, etc. Additionally, if an auditor had a family member or other close personal relationship with someone who works for the company, the auditor’s independence may be impaired due to the knowledge that the family member or other person may be financially dependent upon the company or may have played a significant role in the preparation of the financial statements. 48.(SO 3) From an internal control perspective, discuss the advantages and disadvantages of using IT-based accounting systems. The advantages of using IT- based accounting systems are the improvements in internal control due to the reduction of human error and increase in speed. The disadvantages include the loss of audit trail visibility, increased likelihood of lost or altered data, lack of segregation of duties, and fewer opportunities for authorization and review of transactions.
- 10. Chapter 7 Solutions Auditing Information Technology-Based Processes 49.(SO 4) Explain why standards of fieldwork for GAAS are not particularly helpful to an auditor who is trying to determine the types of testing to be used on an audit engagement. GAAS provides a general framework that is not specific enough to provide specific guidance in the actual performance of an audit. For detailed guidance, auditors rely upon standards issued by the PCAOB, the ASB, the IAPC, and ISACA. 50.(SO 5) Ping and Pong are assigned to perform the audit of Paddle Company. During the audit, it was discovered that the amount of sales reported on Paddle’s income statement was understated because one week’s sales transactions were not recorded due to a computer glitch. Ping claims that this problem represents a violation of the management assertion regarding existence, because the reported account balance was not real. Pong argues that the completeness assertion was violated, because relevant data was omitted from the records. Which auditor is correct? Explain your answer. The completeness assertion is concerned with possible omissions from the accounting records and the related understatements of financial information; in other words, it asserts that all valid transactions have been recorded. Accordingly, Pong’s argument is correct. Ping’s argument is not correct because the existence assertion is concerned with the possibility of fictitious transactions and the related overstatements of financial information. 51.(SO 6) One of the most important tasks of the planning phase is for the auditor to gain an understanding of internal controls. How does this differ from the tasks performed during the tests of controls phase? During the planning phase of an audit, auditors must gain an understanding of internal controls in order to determine whether the controls can be relied upon as a basis for reducing the extent of substantive testing to be performed. Understanding of internal controls is the basis for the fundamental decision regarding the strategy of the audit. It also impacts the auditor’s risk assessment and establishment of materiality. During the tests of controls phase, the auditor goes beyond the understanding of the internal controls and actually evaluates the effectiveness of those controls. 52.(SO 8) How is it possible that a review of computer logs can be used to test for both internal access controls and external access controls? Other than reviewing the computer logs, identify and describe two types of audit procedures performed to test internal access controls, and two types of audit procedures performed to test external access controls. Internal access controls can be evaluated by reviewing computer logs for the existence of login failures or unusual activity, and to gauge access times for reasonableness in light of the types of tasks performed. Internal access controls can also be tested by reviewing the company’s policies regarding segregation of IT duties and other IT controls, and can test those controls to determine whether access is being limited in accordance with the company’s policies. In addition, auditors may perform authenticity testing to evaluate the authority tables and determine whether only authorized employees are provided access to IT systems. Computer logs can also be reviewed to evaluate external access controls, as the logs may identify unauthorized users and failed access attempts. External access controls may also be tested through authenticity tests, penetrations tests, and vulnerability assessments. Authenticity tests, as described above, determine
- 11. Chapter 7 Solutions Auditing Information Technology-Based Processes whether access has been limited to those included in the company’s authority tables. Penetration tests involve the auditor trying to gain unauthorized access to the client’s system, by attempting to penetrate its firewall. Vulnerability assessments are tests aimed at identifying weak points in the company’s IT systems where unauthorized access may occur, such as through a firewall or due to problems in the encryption techniques. 53.(SO 9) Explain why continuous auditing is growing in popularity. Identify and describe a computer-assisted audit technique useful for continuous auditing. Continuous auditing has increased in popularity due to the increase in e-commerce. Real-time financial reporting has created the need for continuous auditing, whereby auditors continuously analyze evidence and provide assurance on the related financial information as soon as it occurs or shortly thereafter. The embedded audit module is a computer-assisted audit technique that accomplishes continuous auditing. The embedded audit module approach involves placing special audit testing programs within a company’s operating system. These test modules search the data and analyze transactions or account balances that meet specified conditions of interest to the auditor. 54.(SO 11) Distinguish between the various service organization controls (SOC) reporting options available to auditors who evaluate cloud computing service providers. The SOC 1 report addresses internal controls over financial reporting. A SOC 1Type I report contains management’s assessment and the auditor’s opinion on the operating design of internal controls over financial reporting. A SOC 1 Type II report is an extension of the Type I report in that it also evaluates the operating effectiveness of those internal controls. A SOC 2 report considers controls over compliance and operations, including the Trust Services Principles. Similar to SOC 1 reports, SOC 2 reporting options also allow for a Type I or Type II conclusion depending upon whether the auditor consider suitability of design or operating effectiveness of those controls, respectively. Finally, a SOC 3 report is an unaudited report that is available to the general public containing a CPA firm’s conclusion on the elements of the Trust Services Principles. Problems 55.(SO 4) Given is a list of standard-setting bodies and a description of their purpose. Match each standard-setting body with its purpose. I. c. II. a. III. d. IV. b. 56.(SO 8) Identify whether audit tests are used to evaluate internal access controls (I), external access controls (E), or both (B). • Authenticity tests (B) • Penetration tests (E) • Vulnerability assessments (E)
- 12. Chapter 7 Solutions Auditing Information Technology-Based Processes • Review of access logs (B) • Review of policies concerning the issuance of passwords and security tokens (I) 57.(SO 9) Refer to the notes payable audit program excerpt presented in Exhibit 7-3. If an auditor had a copy of his client’s data file for its notes receivable, how could a general audit software or data analysis software package be used to assist with these audit tests? GAS and DAS could assist auditors in testing notes payable by performing mathematical calculations of interest amounts, stratification of amounts into current and long-term categories according to maturity dates, and performing ratio calculations as may be needed to assess compliance with restrictions. 58.(SO 11) In order to preserve auditor independence, the Sarbanes-Oxley Act of 2002 restricts the types of nonaudit services that auditors can perform for their public- company audit clients. The list includes nine types of services that are prohibited because they are deemed to impair an auditor’s independence. Included in the list are the following: • financial information systems design and implementation • internal audit outsourcing Describe how an auditor’s independence could be impaired if she performed IT design and implementation functions for her audit client. Likewise, how could an auditor’s involvement with internal audit outsourcing impair her independence with respect to auditing the same company? Both of these scenarios would place the auditor in a position of auditing his/her own work. Auditors could not maintain independence if they are involved in both the IT design and implementation as well as the financial statement audit. To the extent that the IT system impacts financial reporting, an auditor could not possibly be unbiased with respect to a system that he/she had designed and implemented. Likewise, auditors are not likely to be unbiased with respect to performing a financial statement audit for the same company as he/she performed internal audit work. Any evaluations performed during the internal audit engagement are likely to have a bearing on the auditor’s professional attitude while performing the financial statement audit. 59.(SO 2) Visit the AICPA website at www.aicpa.org and select the tab for Career Paths. Click on “This Way to CPA” to locate information on audit careers. The AICPA website presents information on various career paths, including public accounting (audit, taxation, financial planning, etc.), business and industry, governmental accounting, not-for-profit accounting, education, and entrepreneurship. Some specialty areas include forensic accounting, environmental accounting, and showbiz accounting. 60.(SO 4, 9) Visit the ISACA website at www.isaca.org and click on the Knowledge Center tab, then select ITAF (Information Technology Assurance Framework) and click on the IT Audit Basics tab to find articles covering topics concerning the audit process. Locate an article on each of the following topics and answer the related question:
- 13. Chapter 7 Solutions Auditing Information Technology-Based Processes a. Identify and briefly describe the four categories of CAATs used to support IT auditing. The four categories include1: • data analysis software, including GAS and DAS • Network security evaluation software/utilities • OS and DBMS security evaluation software/utilities • Software and code testing tools b. List three possible procedures to be performed by auditors who are evaluating controls pertaining to the backup and recovery of a client’s data. The three procedures include2: • Review or observe backup procedures • Review documentation of a successful restore within the period • Personally verify restoration when risk is high or when restoration is an audit objective. 61. (SO 8) Locate the stock tables for the two major stock exchanges in any issue of the Wall Street Journal. Beginning from any point within the table, prepare a list of the first digits of the daily volume for 100 stocks. Determine whether the listed numbers conform to Benford’s Law. Student responses will vary depending upon the timing of carrying out this requirement and the starting point used. However, students should determine whether the number 1 is represented as the first digit of the volume figures for approximately 33% of the items within the list. If so, then the data conform to Benford’s Law. 62.(SO 12) Perform an Internet search to determine the nature of Xerox Corporation’s management fraud scheme and to find out what happened to the company after the problems were discovered. Xerox’s fraud involved earnings management or manipulation of the financial statements in order to boost earnings. This occurred at Xerox to the tune of hundreds of millions of dollars and involved various accounting tricks to hide the company’s true financial performance so that it would meet or beat Wall Street expectations. The most significant trick was the premature recording of revenues. Upon discovery of the fraud, the SEC filed a $10 million civil suit against Xerox, the largest fine in SEC history. In addition, Xerox had to restate its earnings from 1997 through 2001. Cases 63. Internal Controls and CAATs for a Wholesale client. a. What tests of controls would be effective in helping Draker determine whether Palitt’s vendor database was susceptible to fraud? The following tests of controls could be used: • Verify that the database is physically secure and that programs and data files are password protected to prevent unauthorized access. 1 “Using CAATs to Support IS Audit” by S. Anantha Sayana for Information Systems Control Journal, Vol. 1, 2003. 2 “What Every IT Auditor Should Know About Backup and Recovery” by Tommie W. Singleton for ISACA Journal, Vol, 6, 2011.
- 14. Chapter 7 Solutions Auditing Information Technology-Based Processes Since this situation involves an internal breach of authority, access logs should be reviewed for activity at unusual times (non-business hours). • Make sure that system programmers do not have access to database operations so that there is no opportunity to alter source code and the related operational data. • Ascertain that database inputs are being compared with system- generated outputs. • Determine whether run-to-run totals are being generated and reviewed to evaluate the possibility of lost or altered data. • Ascertain that computer-generated reports are regularly reviewed by management. • Determine whether the client’s field checks, validity checks, and reasonableness checks are all working effectively. b. What computer-assisted audit technique would be effective in helping Draker determine whether Palitt’s vendor database had actually been falsified? Draker could use GAS or DAS to perform audit testing on electronic data files taken from Lea’s database system. Several types of audit tests commonly performed by GAS or DAS systems could be used in this case, including data queries, stratification and comparison of data items, and selection of items of interest. In addition, the following tests can be performed to test the propriety of inputs to the system: • Financial control totals can be used to determine whether total dollar amounts or item counts are consistent with journal entry amounts. This can detect whether additions have been made during processing. • Validation checks can be performed to scan entries for bogus information. Depending on the type of IT system, a validity check of the vendor number field may prevent the entry of fictitious vendors. • Field checks can be performed to identify unrecognized data. If the bogus transactions are being entered during processing, the auditor may use program tracing to evaluate program logic for possible points of entering fraudulent information. Run-to-run totals may also be used to determine whether data have been altered during processing. In addition, output controls such as reasonableness tests could be performed to review the output against authorized inputs, and/or audit trail tests could be performed to trace transactions through the system to determine if changes occurred along the way. 64. Issues with the client representation letter. a. Would it be appropriate for Pannor to reopen the audit testing phases in order to expand procedures, in light of the lack of representative evidence from management? Why or why not? No, Pannor should not expand testing procedures. The purpose of the client’s representations letter is for management to acknowledge its primary responsibility for the fair presentation of the financial statements and the accuracy of evidence provided to the auditors. It is considered the most significant piece of audit
- 15. Chapter 7 Solutions Auditing Information Technology-Based Processes evidence. Obtaining additional evidence would not compensate for a failure to secure a letter of representations; in fact, it is likely that additional testing would be meaningless unless management represents that the evidence it supplies is accurate. b. Will Pannor’s firm still be able to issue an unqualified audit report if it does not receive the representations letter? Research the standard wording to be included in an unqualified audit report, as well as the typical wording included in a client representations letter. Base your answer on your findings. No, an unqualified report is no longer possible due to the failure to obtain written representations from management. This constitutes a limitation in the scope of the audit. Pannor’s firm may either withdraw from the engagement or issue a disclaimer. The standard wording for a client representations letter can be found in AU section 333. The standard wording for an unqualified audit report can be found in AU section 508.
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- 17. 29 shot. The beast was roaring its rage and was headed straight for the two young hunters. “Run for your life!” cried Dick, “it’s the bear’s mate!” As fast as they could run Dick and Sandy set off along the shore ice, exceeding all previous records. They could hear the rattle of the bear’s claws on the ice as it came on in pursuit, and with each second the angry growls sounded nearer. Presently, Sandy began to fall behind in the race. Frantically, Dick urged him on, slackening his own pace to equal that of his slower chum, and while he ran like a frightened deer, all Dick’s narrow escapes ran through his mind in swift succession, for he believed that he and Sandy were doomed at last. In a last desperate effort to save himself and Sandy, Dick determined to make a stand with the last two cartridges in his rifle. It was a plan born of despair, he knew, for two shots at a running target hardly could stop a beast of such massive strength and vitality and in such a ferocious mood. It was then that the boys noticed a change in the sounds of pursuit. The bear seemed to have fallen behind, his growls gurgling strangely in his throat. With renewed hope they ran on until a loud, familiar shout pierced the icy air from a point behind them. They looked back over their shoulders and came to a staggering halt. A hundred yards behind, the bear lay struggling his last, the shaft of a harpoon protruding from its side, while above on the slope stood an Eskimo beckoning to them.
- 18. 30 The gratitude of Dick and Sandy could not be expressed as they hurried toward the Eskimo who had doubtless saved their lives. Coming closer to the native, they recognized him as Sipsa, who had proved so exceptionally friendly at the village. He seemed to understand when the boys tried to thank him, and conveyed by means of many signs how he had been scouting for walrus and seal when he had discovered the danger Dick and Sandy had fallen into. The boys followed Sipsa to the dead polar bear, and watched him draw out the harpoon. So forcibly had the weapon been driven that it had passed almost entirely through the bear’s thick body. Dick and Sandy shivered as they examined the mighty jaws and terrible claws that but for Sipsa’s timely intervention might have crushed and torn them to shreds. “Angekok, Angekok,” Sipsa began repeating, while pointing at the dead bear. Sandy looked blankly at Dick, who was searching his mind for the meaning of the word. At last he recalled it. “He means ‘devil.’ Angekok is the Eskimo word for ‘almighty devil.’ They believe in evil spirits, and he’s trying to tell us there was a devil in this bear.” “I guess he’s not far from right,” Sandy declared with genuine sincerity. Presently the Eskimo managed to convey to the boys that they must return to the village and get sledges with which to haul in the meat of the two bears.
- 19. 31 Feeling they had had plenty of hunting for that day, the boys were glad to consent to this, and all three started back toward camp, led by Sipsa, who had gained the great respect of Dick and Sandy. Tired, hungry and cold, the chums at last reached the Eskimo village, only to find all in a state of confusion and uproar. Toma met them with an explanation of the excitement tumbling from his ordinarily reticent lips. “Somebody steal um dog team an’ sledge,” said Toma. “I in igloo, get um meat cooked for supper. All Eskimo down by big water, ketch um seal. When I come out I see not so many dogs, an’ one sledge not there. I hurry up, tell um Eskimos. They take dog team an’ go after this fella who steal dog team.” “And you didn’t see the thief at all?” asked Dick, gravely concerned. Toma shook his head vigorously. “Him come an’ go like bad spirit. No hear, no see. I no like that kind thief.” Dick was puzzled at first, then spoke: “Sandy, I have an idea this is more of the white Eskimo’s work. He could have got away pretty quietly if he was a good hand with dogs, as I suppose he is. I’m certain now that Fred Mistak and the ‘white Eskimo’ are the same person. We’ll find out.” “In the meantime, let’s eat,” said Sandy. Dick discovered that he had as keen an appetite as Sandy when in their cozy igloo he found a tasty meal prepared by Toma. Both boys were too tired to join the Eskimos, who in spite of the theft of the dog team, set out to skin and cut up the polar bears, leaving the camp
- 20. 32 deserted except for the three boys. Dick and Sandy were later to learn that not even a funeral could stand between an Eskimo and his hunting. When there was meat to be had the natives dropped everything until the last bit of it was safely stored away. For wild meat was their only staple diet—all that kept them from starving to death, and during the real winter they could hunt but little. The boys had finished their supper and were relating to Toma, in detail, their narrow escape from the mad polar bear, when the barking dogs and the sound of familiar voices interrupted them. They tumbled out of the igloo to find Corporal McCarthy and Constable Sloan. The policemen had just returned from a long, fruitless trek eastward, and the Corporal had frosted his feet. What the boys had to say about the stolen dog team was of especial interest to the officers. “Without a doubt Fred Mistak is hiding near here,” commented Corporal McCarthy, when comfortably seated in the boys’ igloo, with his bare feet in a pan of snow to draw out the frost. “So far, I’ll have to admit we’ve done little better than nothing, but we’ll hope for better luck tomorrow——” Corporal McCarthy did not finish his sentence. A hoarse cry at the entrance of the igloo was the interruption, and into their midst tumbled an Eskimo, gibbering in a frightful manner, and groveling on the floor as if he had lost his mind. In the jumble of native words was audible the frequent ejaculation: “Angekok! Angekok!”
- 21. 33 “Him one them three go after fella what steal dog team!” Toma suddenly exclaimed. “What!” cried Corporal McCarthy. “Sloan,” he wheeled toward the Constable, “go out and see if the other two have returned alright.” Constable Sloan was out and back in a few moments. “Not a sign of anyone around—no dog team either,” the Constable reported quietly. McCarthy’s face took on a grave expression, and his jaws hardened. “Ask the Eskimo what scared him?” he directed Constable Sloan. By this time the Eskimo had somewhat recovered his natural calm, yet he frequently looked fearfully toward the igloo entrance, as if he feared something was coming in to get him. The Constable’s questions were brief and the Eskimo’s answers prompt, though his voice trembled from fright. “The Eskimo says it was the ‘white Eskimo’ that attacked them,” Constable Sloan reported presently. “He says his two companions were killed and the dogs taken.” A deep silence fell upon all who had heard Constable Sloan’s words. It was several seconds before Corporal McCarthy spoke rapidly: “Get ready for the trail. We leave here just as soon as we get a few hours’ sleep. I’m going to enlist Sipsa as a guide, and I’ll get my man if I have to trail him clear to the North Pole!”
- 22. 34 35 CHAPTER IV THE WHITE ESKIMO It was thirty below zero the following morning when two teams of twelve dogs, each drawing sledges, loaded with supplies, departed from the little village of igloos. The warm breath from man and dog turned to vapor in the freezing air, and all were enveloped in a cloud of steam as they trekked eastward along the coastline. Corporal McCarthy had found Sipsa willing to lead the party and had also enlisted the aid of two Eskimo dog drivers, Okewah and Ootanega. The policeman had promised all of them large rewards in tools, rifles, and tents, provided they served him faithfully in pursuit of the “white Eskimo.” “I wonder how soon we’ll pick up the trail,” Sandy spoke from the depths of his frost-rimmed parka. “No telling,” replied Dick through a cloud of steam, “we’re now following the tracks made by the Eskimo who came in last half scared to death. Corporal McCarthy believes these tracks will lead to the place where the white Eskimo and his men attacked those three Eskimos who went after the stolen dog team.”
- 23. 36 The boys said no more then for the fast pace at which they were traveling took all their breath. For two hours they drove eastward across the snowfields under a gray cloud filmed sky. At the end of this time they came to a narrow defile between huge blocks of ice that had been thrown up by the waves at high tide. They threaded their way among the ice cakes for about a hundred yards when they came upon the scene of a terrible tragedy. “It’s the two Eskimos that failed to come back last night!” Dick’s horrified exclamation was echoed by Sandy while the two policemen and the Eskimos bent over the two huddled forms in the snow. The Eskimos had been killed, and all about them were signs of a deadly struggle. One sledge had been crushed, and its packing torn up and rifled of supplies. Two dogs lay dead, and prowling foxes had torn them to bits. “If this isn’t the work of Fred Mistak, then I don’t know my name!” Corporal McCarthy cried, shaking his fist at the white silent hills. “But we’ll get him, we’ll get him, and he’ll pay a big price!” Dick and Sandy thrilled at the words, and hastened to lend a hand to the burial of the bodies. Two typical Eskimo graves were made by heaping small boulders upon the dead natives in a cairn-like mound, which would keep away the foxes, which had as yet scarcely harmed them, probably because the dogs had satisfied them for the present. To agree with the superstitions of the Eskimos the sledges, weapons and
- 24. 37 other paraphernalia of the deceased were buried with the dead. “Now that sorry business is over,” Corporal McCarthy addressed the somber company, “we’ll pick up Mistak’s trail and see how fast we can mush. Every man of you keep watch for an ambush. This fellow is about as desperate as they make them, and we’ve already had a taste of his treachery. It’s our hide or his and let’s be careful it’s his. Mush on!” Once more the dogs buckled into the harness and the long Eskimo whips lashed and crackled over many bobbing, white tails. But it was a weary, half-frozen company that camped late that night without sighting the mysterious person they pursued. Dick and Sandy were almost too tired to be hungry once they had thrown up their tupik, or Eskimo tent made of sealskins. Not until they had drunk several cups of hot tea, an indispensable drink in the far north, did they feel anywhere near themselves, and could discuss the doings of the day while munching hard biscuit and pemmican. “I wonder where this trail will end?” Sandy ventured dubiously. “Wish I knew,” rejoined Dick, “but I think the ‘white Eskimo’ will lead us on a real old wild goose chase. He knows more about this country than any of us, and I wouldn’t be surprised if he knew the lay of the land better than any of these Eskimo guides. Anyway the Eskimos can’t be of much use in tracking that fellow because they believe the ‘white Eskimo’ is an Angekok, or devil. They’re so superstitious that if we once got
- 25. 38 very close to the fellow we’re chasing, they’d probably lead us astray or run off and leave us alone.” “I guess they believe in ghosts alright,” agreed Sandy, pouring another cup of tea. Dick was about to continue the discussion, when he chanced to look through the opening of their tupik. “Look at that!” he grasped Sandy’s arm tensely. What Dick saw was their three Eskimo hands gathered before their tupik in a private council of some secret purpose. The native drivers were gesturing excitedly with their hands and heads, evidently arguing with Sipsa, the guide. “The drivers seem to be ready to quit right now, the way they act,” observed Sandy. “Well, we can’t go far without them, at least, without a guide. I ought to tell Corporal McCarthy about this.” However, no more were the words out of Dick’s mouth than the police Corporal approached the three Eskimos and scattered them to various tasks. Presently the Corporal joined the boys in their tent and confirmed their fears. “I’m afraid these Eskimos will desert us if we don’t keep close watch of them,” said the policeman. “We’ll all have to take turns on watch tonight, tired as we are. I think Sipsa still is loyal, but the other two are doing their best to make him desert. The ‘white Eskimo’ certainly has them scared.” It was twelve o’clock when Dick Kent’s turn came to stand watch, and it was with some difficulty that he
- 26. 39 shook the sleep out of his eyes when Constable Sloan spoke to him. “Don’t think we’ll have any trouble tonight after all,” the Constable reassured him. “The Eskimos seem pretty quiet, but be ready for anything and don’t hesitate to call McCarthy and me if anything unusual turns up. Good night.” Dick shivered as he took his post at the entrance of the tupik with rifle in his mittened hands. The dogs were quarreling among themselves where they were leashed to the sledges, and from the Eskimos’ tupik came the muffled sound of voices. They did not seem as quiet now as Constable Sloan had reported them. They were speaking in their native tongue and Dick could not understand what they were talking about. “I’ll just keep close watch of their tent,” he murmured to himself. “If any of them try to sneak away I’ll call the policemen.” An hour passed, the Eskimos quieting down and apparently falling asleep. The vast silence of the far north brooded over the little encampment, when Dick detected, out of the corner of his eye, a movement beyond the huddled dogs. It was like a small animal that had moved across the top of a snowdrift. Dick’s heart skipped a beat as he strained his eyes to catch sight of whatever had appeared. A dog growled, and Dick spoke quietly to the big huskies, getting up and going to them. The leader of the team, a giant malemute, was sitting up, his ears alert, and his nose wriggling as he sniffed the air uneasily.
- 27. 40 “What is it, old boy?” whispered Dick. “What do you see?” The malemute growled ominously in answer, his hair rising along his back as he scented some sort of danger. Dick looked carefully about camp again, seeking the cause for the dog’s uneasiness, but all seemed peaceful enough. Impulsively, he decided to walk out to the drift where he had seen the suspicious movement, thinking he would find there the tracks of some animal. The drift was only about fifty yards from the sledges where the dogs were tied, and Dick soon reached it. About to go around the drift and investigate, a weird, low call from behind him brought him to an abrupt halt, the blood congealing in his veins at the strangeness of the sound. He turned and looked back at camp. There came a soft swishing sound from the snowdrift he had been about to inspect, and he whirled to see a dark form bearing down upon him. His startled cry was cut off sharply as something hard descended forcefully upon his head and he went down in the snow, thousands of stars blazing before his eyes. But Dick had not been knocked entirely unconscious. He lay still a moment until his senses came back to him, feeling the person who had attacked him leap over him and toward camp. Then came the cries of the aroused camp, mingled with the barking dogs, and above all the shriek of a frightened Eskimo, followed by a wail of fear. Struggling to his feet, Dick saw Corporal McCarthy taking aim at two fleeing figures, and heard his rifle crack. But the policeman was firing into the air, merely to frighten the attackers.
- 28. 41 Sipsa was struggling in the strong arms of Constable Sloan, and from the mouthings of the frightened native Dick could make out that Sipsa had seen the “white Eskimo.” “Where are the drivers?” Dick shouted to Sandy who was standing as if stunned, his rifle held in his hands. Sandy seemed to regain his wits at that and dived for the Eskimos’ tupik along with Dick. They almost collided with Toma coming out of the tent. “Um gone,” said Toma, “Um run away when seen um ‘white Eskimo.’” The truth of Toma’s statement was soon revealed when a search of the camp and the vicinity revealed no sign of the two drivers, other than their tracks in the snow. “Well,” said Corporal McCarthy, “I guess the ‘white Eskimo’ knows how to scare the wits out of the natives. I don’t suppose there’s any use for us to chase our guides. They’d be of no further use anyway. I hope Sipsa doesn’t take it into his head to follow them when he gets a chance to break away.” “We’re lucky to have whole skins,” Constable Sloan remarked. “My head feels as if it was too big for my parka,” said Dick, manfully fighting off a dizzy spell. “Hurry into your tent and I’ll get the medicine kit,” said Corporal McCarthy. “I want to get going again in an hour anyway. We ought to locate some more drivers tomorrow, and if possible, overtake Mistak, the ‘white Eskimo,’ before he gets another lead on us.”
- 29. 42 Dick’s head wound proved not serious. His heavy parka had protected his scalp from the blow, which had probably been made with a spear butt. There was, however, a large lump about the size of an egg over his left temple, and it was rather sore. But the young northman would not think of delaying the pursuit, and speedily forgot his slight wound as he hustled about making tea, while Sandy and Toma lent willing hands with the packs and dog harnesses. Within an hour dog and man had partaken of an early breakfast and were mushing grimly along a fresh trail under the midnight sun. “This was a wise move on our part,” Dick told Sandy as they woddled along on their snowshoes. “Mistak won’t expect us to start out so soon and we’ve a good chance to overtake him.” “I get the creeps whenever I think of that Eskimo stealing into camp that way,” rejoined Sandy. “Suppose he is a kind of a devil.” “Nonsense,” replied Dick, “just because these poor, superstitious Eskimos are frightened is no sign you should be. I’ll admit he’s a dangerous character, but he’s no more than a human being, and the mounted will get him in the end.” Sandy was about to reply when an exclamation from one of the policemen silenced him. They had come out on the rim of an ice-bound ridge and below them stretched a vast valley bounded by the sea on the north and filled with age-old ice formations.
- 30. 43 44 Directly below them were two dog teams, the drivers of which had apparently not yet detected the mounted police. Dick and Sandy could not forbear a cheer as Corporal McCarthy called for full speed ahead and they drove the dogs yelping down the slope toward the fugitives from justice. At that moment it looked very much as if Fred Mistak’s career of outlawry were doomed already, and the boys prepared themselves for a battle.
- 31. CHAPTER V AT SEA IN KAYACKS When Dick and Sandy sighted the dog team of what they believed to be the “white Eskimo,” it could not have been more than a half a mile away, though distances in the north are deceptive. “We ought to catch up with them in twenty minutes,” Constable Sloan had said. But they were not so fortunate. Either the “white Eskimo” had seen his pursuers and was therefore driving faster, or his dogs were faster at a normal pace of travel than the police dogs. At any rate, after thirty minutes, fast driving they were bumping along over a rough ice floor, the team ahead nowhere in sight. “It can’t be far to the sea shore now, can it?” panted Sandy. “No,” Dick replied, “we are probably traveling across a frozen bay now. The ice may be hundreds of feet thick here, you know, and the sun never gets warm enough to melt that much ice.” “It takes awfully cold weather to freeze salt water,” Sandy opined.
- 32. 45 46 “I should say it does!” agreed Dick emphatically, “but you know most of the ice around here is from old glaciers, and is fresh water ice. The glaciers slide down to the sea shore and break off, making ice-bergs and huge ice floes.” “Hey! Look out!” Sandy’s cry of warning came too late. Dick had been so interested in his explanation of the ice formations that he had not noticed how close he was to a treacherous slope of glassy ice. He slipped, and before he could catch himself he had whizzed down, flat on his back, to come up with a bump in a hard snowdrift at the bottom of the slope. “Are you hurt?” called Sandy anxiously, as Dick crawled out of the snow, sat up and began shaking himself. “No, but I’ve got my parka full of snow,” Dick called back, “and it’s not a very pleasant feeling with melted snow trickling down your chest.” The policemen had stopped upon seeing Dick’s accident, and they now waited until he had climbed back up the slippery slope before they went on. Dick was not much the worse for the spill in the snow, since the heat of his body under the warm clothing soon dried up the snow that had seeped in. He forgot the accident in anticipation of the excitement ahead, for at any moment all hands expected to sight the dog team of Fred Mistak. A breeze had sprung up, blowing in their faces, and they all could feel the nearness of the sea by the dampness in the air. Then, suddenly, they rounded a huge heap of snow-covered ice to come upon a vast bay of open water and a most discouraging sight. A mile out
- 33. 47 to sea, in native boats, they could see their quarry vanishing toward a snow-capped, rocky island. Even as they watched they saw one tiny figure raise up and wave a defiant hand at them. “Well, he’s flown the coop this time,” said Corporal McCarthy through his teeth, “but we’re not beaten yet— not by a long shot. Sloan, bring Sipsa here.” Dick and Sandy followed the Constable and the Eskimo guide to Corporal McCarthy’s side. “Tell Sipsa we must get Eskimo boats immediately,” was the policeman’s command. “Enough boats to carry all of us along with our provisions, dogs, and sledges.” When Sloan had explained this to Sipsa, the Eskimo shook his head at first, but finally seemed to offer some encouragement. “He says he’s not sure he can find any Eskimos very near here,” Sloan turned to Corporal McCarthy. “But he’ll try. He says we’ll have to take a chance following the coast line.” “Alright, then, we’ll take the chance. We’ve got to have boats.” But luck was with them, for they had not gone on a mile when they came upon a dozen igloos in a sheltered nook. The tribesmen were at sea, hunting seals, and the women were scattered along the shore skinning and cutting up the meat. “We are in luck in some ways,” called Constable Sloan, cheerfully, as they drew up at the igloos. “Now if we can
- 34. 48 only trade these fellows out of a few native boats, we’ll be luckier still. Here comes a couple of men.” The two Eskimos approaching from the beach, were evidently not at all afraid of the white men, for they came up smiling, perfectly unconscious that they put forth a bad appearance with their clothing covered with seal blubber, grease and blood. Sipsa immediately began talking with them, Sloan permitting him to do the dickering for the boats. When the policemen had opened one of the packs and revealed some fine, shiney knives, kettles, and axes, the Eskimos became greatly interested, and one of them ran off to call the rest of the tribe. Presently they were all down at the sea shore looking over the native boats, or kayacks. Corporal McCarthy picked out one serviceable looking kayack, and two umiacks, or large boats, for the dogs and supplies. The kayack was about twenty feet long and twenty inches wide, covered with water proofed skins, and made to seat one person in a hole in the center, over which was a flap that could be buttoned around the chin, making the boat almost water tight, even though it were capsized. The umiacks were, however, flat-bottomed, hollow, and were ordinarily used in transporting women, children, and household goods by water. Corporal McCarthy gave the Eskimo owners a large collection of knives, pots and hatchets for the boats and they seemed very well pleased with the trade. “I’ll take the kayack,” instructed Corporal McCarthy. “Sloan, you and the Indian lad take one of the umiacks and Dick, Sandy, and Sipsa the other. If we get a move
- 35. 49 on we can get our equipment loaded before Mistak gets too much of a start. He took his dogs so we’ll have to take ours.” Not more than a half hour later Dick and Sandy and the Eskimo guide put to sea in their umiack, a crude sail of caribou hide stiffening in the breeze, while they plied a paddle to add to their speed. Constable Sloan and Toma followed immediately in the other umiack, while the Corporal settled himself in the kayack, the last of the three. Corporal McCarthy soon passed the heavily loaded umiacks in his faster and lighter boat and signaled them to follow him. “Watch out for the ice bergs and floes,” called the corporal. “If you see a walrus, don’t shoot unless you’re attacked.” The three boats strung out in a line headed toward the glacial island where they believed Mistak would land. In Dick and Sandy’s boat were half the dogs and the two sledges, along with the stoves and liquid fuel. It was a heavy load for the unwieldy umiack, and Dick was not long in discovering that the dangers in arctic navigation were not to be scoffed at. Though from a distance the water seemed free from ice, close at hand the bergs could be seen rolling along, either submerged, or just above the water. Sipsa took a position in the prow of the umiack, where, with a long pole, he fended off the larger ice blocks. In the stern Dick plied a paddle, while in the center Sandy took care of the dogs and saw that the cargo did not slip to one side and capsize the craft.
- 36. 50 All went well until they reached rougher water a quarter mile from the shore. Here an ocean current carried them eastward in spite of all they could do. Sandy fashioned himself a paddle from a snow shoe covered with a piece of seal skin, and did all he could to help Dick in the uneven struggle, but they moved steadily eastward toward a low headland that marked that boundary of the bay. The island that was their destination now lay several miles northwest of them, and a floe separated the two umiacks. Corporal McCarthy was having all he could do to manage his kayack, which was being considerably buffeted about by the waves and ice. “Maybe we’ll strike another current when we get close to that headland east of us,” called Dick from the stern. “I hope so,” replied Sandy dubiously. “This sail isn’t doing us much good now though. The wind seems to have gone down suddenly.” At that moment Sipsa, the Eskimo guide, rammed his pole at a submerged ice berg, and the pole slipped down into the water, forcing Sipsa to lose his balance. Dick’s cry of warning did no good. The Eskimo did the best he could to keep his balance, then toppled head foremost into the chilly water. “Quick, help him in, Sandy!” cried Dick, “while I hold the boat as steady as I can.” Sandy dropped his paddle and hurried to the prow where Sipsa was struggling about in the water. The Eskimo still retained a tight grip on his pole, which had been the cause of his fall, and Sandy got a grip on this.
- 37. 51 Soon Sipsa crawled, gasping and gurgling, into the umiack. “Whew, close shave that!” exclaimed Sandy. “And maybe he’ll freeze to death from that wetting,” Dick added. “Sandy, you’d better get one of the heaters started so he can dry off.” But Sipsa, hardy Eskimo that he was, made it known, by various signs, that he needed no heater, and took up his former position as if nothing had happened. While the ducking might have been fatal for Dick or Sandy, it meant little to the guide since the season was what he called summer. Once off the headland the current swept them northward as they had hoped, and also a breeze sprang up from the open sea. The sail filled and they began to make time toward the island. The floe which had separated the umiacks had passed on and Dick and Sandy could see Toma and Constable Sloan coming along safely a quarter mile behind. Corporal McCarthy was within speaking distance again and his voice boomed out over the water. “Watch out for walrus! There’s a big bull in here somewhere. Steer clear of him if you can.” The moment was a tense one for Dick and Sandy. Many a story they had heard of these giant inhabitants of the Polar Sea, and to meet one in his native haunts was something they feared, yet hoped to experience. Dick’s eyes were fixed upon the water near at hand when something dark welled up out of the clear blue depths and shot past the boat.