A company's accounting department implements a new system to track liabilities for capital assets.

The new accounting system implemented by the company's accounting department excludes some important indirect procurement data, leading to incomplete reports. The best course of action is to notify senior management about the potential understatement of the company's debts and assets. This ensures transparency and allows senior management to take necessary steps to address the issue, such as integrating the data from the other system or adjusting their decision-making processes accordingly.

References

Financial Accounting Standards Board (FASB). Reporting standards and guidelines.

COSO (Committee of Sponsoring Organizations of the Treadway Commission). Internal Control-Integrated Framework.