Auditing and Assurance in Australia | Case Studies

Running head: AUDITING AND ASSURANCE IN AUSTRALIA
Auditing and Assurance in Australia
Name of the Student
Name of the University
Author’s Note

1AUDITING AND ASSURANCE IN AUSTRALIA
Table of Contents
Case (a).......................................................................................................................................2
Case (b)......................................................................................................................................2
Case (c).......................................................................................................................................3
References..................................................................................................................................5

2AUDITING AND ASSURANCE IN AUSTRALIA
Case (a)
1. As per the provided case, Shar provides certain additional non-assurance services to
Marina apart from the audit of financial statements; they are management consultancy
and tax planning. As per Paragraph 290.164, providing consultancy services to the
management is not considers as management responsibility and this does not violate
any auditing principle (apesb.org.au 2019). As per Paragraph 290.182 of APES 110,
providing taxation services can contribute to the generation of self-review and
advocacy threat of audit independence (apesb.org.au 2019). Moreover, Shar is
involved in providing consultancy services to Marina that includes the introduction of
internal control system. This contributes to the formation of self-review threat because
of the possibility the results of the internal audit services will be used by Shar in the
absence of appropriate evaluation of the results or without employing the same extent
of professional scepticism as would be employed by the individuals in the procedures
of internal audit.
2. In case of tax planning, the safeguards available are to use the professionals that are
not member of the audit team for performing the audit, to have a tax professional who
does not have any inclusion in providing the tax planning services, to acquire advice
from an outside tax professional and to obtain pre-clearance or advice from tax
authorities. In case of providing internal control related services, the safeguard is to
use the professionals who are not the part of the audit team for performing the internal
audit services (cpaaustralia.com.au 2019).
Case (b)
1. Shar has a long-standing relationship with Carter, but there is not any kind of threat or
ethical issue as there has been constant change in the senior audit manager. However,