Auditing and Assurance Service

Running head: AUDITING AND ASSURANCE SERVICE
Auditing and assurance service
Name of the student
Name of the university
Student ID
Author note

1AUDITING AND ASSURANCE SERVICE
Table of Contents
Answer for question 1................................................................................................................2
Answer (a)..............................................................................................................................2
Answer (b)..............................................................................................................................2
Answer (c)..............................................................................................................................2
Answer (d)..............................................................................................................................3
Answer (e)..............................................................................................................................3
Answer (f)..............................................................................................................................3
Answer for question 2................................................................................................................5
Answer (a)..............................................................................................................................5
Answer (b)..............................................................................................................................5
Answer (c)..............................................................................................................................5
Answer (d)..............................................................................................................................6
Reference....................................................................................................................................7

2AUDITING AND ASSURANCE SERVICE
Answer for question 1
Ethical principal for the members under different circumstanced is provided in APES
110 - Code of Ethics for Professional Accountants. The code includes 3 parts – recognizing
threat, assessing the significance of recognised threat and (iii) applying safeguards for the
threats, wherever needed (Accounting Professional & Ethical Standards Board 2019).
Answer (a)
As per the requirement of APES 110 the accounting professional is not allowed to
promote any product while providing audit service. In the given scenario, the professional
accountant provides various services like preparation of tax returns, book keepings and
management services. During the period when it was providing the services advising its client
to purchase the computer from Computer Service Ltd that will offer 10% commission if the
accountant’s referral helps it to sell the computer. Such referral commission or fee will create
self –interest threat to objectivity as well as professional competence and due care of the
professional (Martinov-Bennie and Mladenovic 2015).
Answer (b)
The auditor is not allowed to provide any suggestion for financial statement
preparation ant not incorporating their judgements that may have significance influence on
the preparation of financial statement. However, the auditor may assist the client in various
matters like converting the reporting framework to any other framework or provide assistance
for complying with accounting policies and these will not breach the ethical principal of the
auditor. Further, allowing the clients to use its computer where client record is maintained
will not breach the ethical principal unless the information is disclosed to the client
(Aasb.gov.au 2017).
Answer (c)
Members involved in public practice must ensure that while providing the services to
client it does not create any type of threat against the principal of fundamental objectivity.
For assuring this the auditor shall not establish any relationship with the client, its business,
employees or executives. In the given scenario, Katrina Ng, manager of the audit firm for non
profit entity. In addition to being the manager of audit firm, she also holds the honorary
position of board of directors of the client company. All Australian members shall be
complied with APES 110 even when the service provided is in honorary capacity. Otherwise