ACC300 Auditing Assignment

ACC300 AUDITING ASSIGNMENT
Question 1
(a)
The principle of objectivity says that members should avoid any forms of conflicts of interest or bias
that will affect their judgements. Alfred Jarmon has created a self-review threat by providing
additional services not related to audit. The reason is these additional services may have a
significant effect on the business financial statements that he will audit. Therefore, his independence
has been threatened
The principle of objectivity has been violated.
(b)
It is possible that the information stored on Wrench’s systems may be accessed by third parties who
are not the intended recipients. For example, at any time, the information can be accessed by any of
the company’s clients. Secondly, Wrench’s audit branch has access to the same information, and
may use this information in unethical ways. Therefore, the principle of confidentiality has been
violated.
(c )
The principle of objectivity has been violated.
Katrina has multiple roles within the Non-profit organisation. She is the manager to on an audit firm
to which audits the Non-profit organization. Furthermore, she is sited on the board of the non-profit
as a Director. Because of these multiple roles, it may prevent her ability to make an objective
decision. In other words, when Katrina is deciding a making a decision in relation to the organization,
if she does not provide proper safeguards, it may not be easy for her to remain objective.
The code of ethics says that Katrina should not accept offers which may threaten her independence.
Otherwise, she would breach the principle of objectivity.
(d)
Peter has multiple roles and therefore may be confronted with conflicts of interest when performing
his own accounting/auditing job. In addition he has other additional roles not related to audit. To
avoid these situations, Peter should implement appropriate safeguards in his firm. Examples of these
safeguards include setting chinese walls or employing separate teams for advisory and audit.
The principle of objectivity has been violated.