Auditing: Ethical Considerations and Responsibilities

This auditing assignment explores key ethical considerations and responsibilities faced by auditors. It delves into threats to auditor independence arising from various situations, including self-interest, social functions with clients, and reliance on client-provided documents. The assignment also examines the auditor's responsibility in identifying misstatements within financial reports and ensuring compliance with legal and accounting standards. Specific examples and scenarios are analyzed to illustrate these concepts.

Running head: AUDITING
Auditing
Name of the student:
Name of the university:
Author note

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Answer 2
a) The particular section of 100.12 of APES 110 self review threat puts an express
limitation to any one member of the audit team. Moreover the limitation is also put on the
audit members towards those works which is already made use by some other person
with respect to audit. It can be considered that Davis is used as a substitute for Leona to
fulfill the auditing purpose of Jenkins Ltd. By Thornleigh Accountant as Lisa was ill. As
per the provisions of the above situation it might lead to a breach of provision. The
reason being that Davis has all the information of the financial condition. That is why
even if she is sent to audit the finance of Jenkins then there would be a threat to self
review provision (Athanasiou 2014).
b) Section 200.8 of the APS stresses on the judgment of the auditor with regard to that the
audit report needs to be independent and not to be manipulated in any way. The situation
that is given here John is employed for auditing the financial statements of Winmalee
Ltd. He also got the responsibility of supporting the valuation of assets with other
documents. But as per the discussion made above the documents cannot be taken into
consideration with his decision as per the valuation of assets. It will be wrong in his part
if he gets manipulated by the documents of Winmalee Ltd. or he will be responsible for
the breach of the section that is discussed above in relation to the independence of the
editors (Carey, Monroe and Shailer 2014).
c) According to the provisions of section 1 10.12 of the APS 110 self-interest track that is
not right on the part of the auditors to have any self interest of any kind as or the client
for whom they are supposed to do the audit work. It has been described in the situation
that is given above that the chocolate company has invited the auditor’s to the social

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functions and other events to although it might be an act of influence by the company so
that the auditor will provide them with a favourable audit report. Moreover if the auditor
things that he has any form of interest or any favour in the company then he is
independent of the judgement and it might get compromised in relation to the audit
opinion. That is why in the situation at is given above if the audit member accents
invitation as per the social functions provided by the company then it would be
immediately and imminent threat to the violation of the discussed section about of the
code of ethics by the auditor (DeFond and Zhang 2014).
Answer 3
a) The responsibility of the auditor is restricted to finding on any miss statement as per the
financial report of the organisation and thus make sure that this compliant with the
current legal and ethical obligations.Until and unless the auditor is able to find any fraud
in the relation to the financial report of the company he does not have the responsibility
of claim to pass any comment as per the report. It has also been provided that corner
company have truly explained through their financial report that they have issues in
repaying the loan as there are not sufficient financial resources available.In such a
situation the company did not involving any fraud or unethical Audi model activities
therefore it is the duty of the auditor to give an unqualified audit opinion as per the
organization (Deumes et al. 2012).
b) It is the responsibility of the organisation to be in compliance with the legal provisions of
the country where they are carrying out their work this legal or legit provisions extends to
the process which is used by the company for making and presenting the financial
statement the situation that is given above has been provided that instead of QA FIFO

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method which is used in Australia and Organisation they will be using the life of method
which is used by the parent company in America that is why the company is not in
compliance with the current legal provisions which it needs to comply with while
operating in Australia in such a situation the auditor is entitled or claims to issue and I
was opinion in relation to the organization (Galit, Sorbe and Metabank 2012)
c) It is the responsibility of the organisation that is carrying out its work in Australia to be in
Richmond UK Top valuation as per the acids such as buildings plant machinery then
others however it has been expressly provided that the Victorian manufacturing company
is not making valuation with respect to its factory located in Australia Melbourne this is
the reason why they are not expecting a change in the price or cost structure but the
assumption of the director might not be true and it might also cause or miss statement in
the financial statement of the company therefore the auditor would not be able to provide
a perfect opinion as per the financial statements where the existing fair value of the land
is not given (Han Fan, Woodbine and Cheng 2013).

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Reference
Athanasiou, A., 2014. Avoiding client persuasion. Taxation in Australia, 48(10), p.601.
Athanasiou, A., 2014. Boy, you're gonna carry that weight a long time!. Taxation in
Australia, 49(2), p.106.
Carey, P.J., Monroe, G.S. and Shailer, G., 2014. Review of Post‐CLERP 9 Australian Auditor
Independence Research. Australian Accounting Review, 24(4), pp.370-380.
DeFond, M. and Zhang, J., 2014. A review of archival auditing research. Journal of Accounting
and Economics, 58(2), pp.275-326.
Deumes, R., Schelleman, C., Vander Bauwhede, H. and Vanstraelen, A., 2012. Audit firm
governance: Do transparency reports reveal audit quality?. Auditing: A Journal of Practice &
Theory, 31(4), pp.193-214.
Galit, S.H. and Sorbe, T., Metabank, 2012. Computerized extension of credit to existing demand
deposit accounts, prepaid cards and lines of credit based on expected tax refund proceeds,
associated systems and computer program products. U.S. Patent 8,090,649.
Han Fan, Y., Woodbine, G. and Cheng, W., 2013. A study of Australian and Chinese
accountants’ attitudes towards independence issues and the impact on ethical judgements. Asian
Review of Accounting, 21(3), pp.205-222.
Kachelmeier, S.J., Schmidt, J.J. and Valentine, K., 2016. The disclaimer effect of disclosing
critical audit matters in the auditor’s report.