Auditing Assignment- Confidentiality Principle

   

Added on  2020-04-07

10 Pages2734 Words78 Views
AUDITING ASSIGNMENT
Auditing Assignment- Confidentiality Principle_1
AuditAnswer-1a)Confidentiality principle- Non-ViolationJames Bromley is an auditor who is about to retire in a few days and has obtained permission from his clients to reveal only the tax details to the new accountant purchasing his practice. Apart from tax details, James has also provided some other helpful information to Jayne about products, services, and potential services.In this case, there is no violation of the ethical principle of confidentiality. The principle of confidentiality required that the professional should not disclose any such information with the third parties which can be advantageous to the professional or the third party without client’s permission unless there is professional right or duty to disclose such information (Gay & Simnet, 2015). If any information is provided to a third party, it will lead to a breach of the code of conduct thereby questioning the integrity of the auditor. In the given case, James had shared the said information only to help Jayne in carrying out the audit and other services fluently after James retires and this information has been shared as a part of his professional duty (Elder et. al, 2010). Hence, there has been no violation in this scenario.b)Professional Competence and Due Care- ViolationIt is the duty of the professional to possess professional knowledge for every related aspect and also to ensure his clients of competence of professional services being provided to them. Moreover, it is the duty of the professional to provide the accurate and updated knowledge to the client so that the work is not hampered. Also, he must be aware of the current developments in practice and all recent updates with regard to his profession (Gay & Simnet, 2015). In the given case, Fred has not been into practice for 6 years and was not doing anything related to his professional field. He was pursuing some sports activity on a professional level. Hence, he is not up to date with the current legislation and laws and as such, it can be said that he is not professionally competent enough at present to undertake any audit work. Hence, it is a violation of ethical principles (Roach, 2010).2
Auditing Assignment- Confidentiality Principle_2
Auditc)Professional Behavior- Non-ViolationAccording to the professional behavior ethical principle, the professional should ensure tofollow the relevant laws and regulations and not to do any such activity which may bring disrespect to the profession. If any disrespect is brought to the profession then such a matter can be questioned and the violation can lead to termination or cancellation of the degree. In all probability, the professional should maintain the integrity so that there is nocase of a violation (Heeler, 2009). In marketing about the profession, the professional should not make any announcements regarding the fees charged by them or make exaggerated claims about the services he offers or makes comparisons with other professionals’ work. The Asquith Accountants are advertising an exaggerated statement in the local paper that they guarantee to provide their clients with a tax refund within 10 days. Hence this is a violation of ethical principles.d)No Violation of Ethical Principle Amy Harriss is an Auditor for a chartered accounting firm and has been asked to be the treasurer of the local athletics club which is a not for profit institution. The firm in which Amy is an auditor does not audit the athletics club. A professional cannot accept any work position in the organization for which he is an auditor as there occurs a threat to his audit independence (Johnstone et. al, 2014). But in the given case, Amy has been offered a membership from a non-client and hence there is no violation provided that he intimatessuch appointment to the regulating institute as per the relevant laws.e)Objectivity- Non ViolationObjectivity principle requires the professional that he should not be biased in his opinion or there should not be a conflict of interest or his opinion should not be based on any undue influence. This implies that an independent decision should be provided and there should be no cases of influence (Wood, 2011). The Gordan Accountants carried out the Audit of Simtec Ltd from July 7th to the 2ndSeptember 2016 and Simtec have advised Gordan Accountants that the final payment is dependent upon receiving an “appropriate” final report. If Gordan Accountants accept the terms of the client, then it will be a violation of objectivity principle because he is under an undue influence from a client for not getting fees until he issues a report favoring the client.3
Auditing Assignment- Confidentiality Principle_3

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Ethical Principles and Audit Report Contents
|4
|1056
|490

Code of Ethics for Professional Accountant
|3
|1100
|103

Question 1 James Bromley Disclosure of Tax Information and Helpful Information to a New Account is not Violation of Ethics Standards
|7
|2411
|129

Question 1: Ernie Dengate breached the principle of Confidentiality
|4
|1172
|342

Ethical Principles and Independence in Audit - Desklib
|11
|2597
|277

Ethical Principles Assignment
|5
|666
|147