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Auditing and Assurance Services (pdf)

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Added on  2021-06-17

Auditing and Assurance Services (pdf)

   Added on 2021-06-17

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Running head: AUDITING AND ASSURANCE SERVICESAuditing and Assurance ServicesName of the StudentName of the UniversityAuthor’s Note
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1AUDITING AND ASSURANCE SERVICESTable of ContentsQuestion 1........................................................................................................................................2Requirement A.............................................................................................................................2Requirement B.............................................................................................................................2Requirement C.............................................................................................................................3Requirement D.............................................................................................................................4Requirement E.............................................................................................................................4Requirement F.............................................................................................................................5Question 2........................................................................................................................................6Situation 1....................................................................................................................................6Situation 2....................................................................................................................................7References........................................................................................................................................9
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2AUDITING AND ASSURANCE SERVICESQuestion 1Requirement AAs per the provided situation, Jenny Wang has been conducting the audit operations ofPanania Cars Pty Ltd for last six years. Due to a sales offer for the long established customers,the company is proposing an offer to the auditor to a car on twenty percent offer. As per APES110, Section 260, Gifts and Hospitality, in case the auditor is offered with an gift, hospitality oroffer from the audit client, there may be creation of audit threat to compliance with thefundamental principles of auditing (apesb.org.au 2018). Thus, in case the auditor accepts theoffer or gift or hospitality from the client, a threat to audit objectivity principle can be created.The present case can be explained with the light of this principle (George, Jones and Harvey2014). As per this principle, Jenny Wang is not supposed to accept the offer from Panania CarsPty Ltd as the auditors are not required to receive any kind of offers from the clients. In caseJenny Wang accepts the offer, there can be a potential threat of Objectivity principle(Athanasiou 2014).Requirement BAs per the provided situation, Katrina Wearne is conducting the audit operations ofLancom Cosmetics for November and December 2008. Katrina Wearne has received a Christmasgift of $350 cosmetics from the company. The essence of this case is similar to the abovesituation. According to APES 110, Section 260, Gifts and Hospitality, the audit clients mayoffer gifts to the auditor and this type of offer can create the threat of non-compliance with therequired auditing principles (apesb.org.au 2018). Moreover, there is a chance of the creation ofthe self-interest threat to the audit objectivity principle in case the auditors accept the gifts. In the
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3AUDITING AND ASSURANCE SERVICESpresence of this threat, the members of public practice need to evaluate the significance of thelevel of threat for the application of correct safeguards. The provided case can be explained fromthe perspective of this regulation. The application of this regulation imply that Katrina Wearne isnot supposed to accept the gift of $350 worth cosmetics from the company as it can lead to theviolation of the audit objectivity principle. Thus, it can be concluded that Katrina Wearne hasviolated the ethical principle of audit Objectivity by accepting the gift (apesb.org.au 2018). Requirement CFrom the provided situation, it can be seen that D. Marron has been engaged in anorganization as a computer consultant for carry out the review program of the company and theclient has required him to review the installation of a new computer system in order to maintainthe production and inventory records. However, in the presence of lack of required technicalknowledge, D. Marron is not able to review the installation program and permits the company togo for the installation. As per APES 110, Section 130, Professional Competence and DueCare, the auditor re required to have sufficient professional knowledge and skill to provide theclients with the required auditing services (apesb.org.au 2018). For this reason, the auditors arerequired to act diligently in accordance with the required technical and professional standards atthe time of providing the audit services. By applying this regulation in the current situation, itcan be said that D. Marron should not have taken the review program of the company in theabsence of required technical knowledge (Trung 2015). In addition, he should not have providedthe permit to go ahead with the installing without reviewing the situation. Thus, this totalscenario violated the principle of Professional Competence and Due Care (Clayton and Staden2015).
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