Auditing and Assurance Services: Ethical Principles and Violations

Running head: AUDITING AND ASSURANCE SERVICES
Auditing and Assurance Services
Name of the Student
Name of the University
Author’s Note

1AUDITING AND ASSURANCE SERVICES
Table of Contents
Question 1........................................................................................................................................2
Requirement A.............................................................................................................................2
Requirement B.............................................................................................................................2
Requirement C.............................................................................................................................3
Requirement D.............................................................................................................................4
Requirement E.............................................................................................................................4
Requirement F.............................................................................................................................5
Question 2........................................................................................................................................6
Situation 1....................................................................................................................................6
Situation 2....................................................................................................................................7
References........................................................................................................................................8

2AUDITING AND ASSURANCE SERVICES
Question 1
Requirement A
It can be seen from the given situation that Jenny Wang is the auditor of Panania Cars Pty
Ltd for last six years. In the presence of an offer for the long established customers, the company
is allowing Jenny Wang to purchase a card on 20% discount over the discounted prices. This
aspect can lead to the breach of audit ethical principle. According to APES 110, Section 260,
Gifts and Hospitality, there is a potential of the development of threat to non-compliance with
the fundamental ethical auditing principles in case the auditors accept any gift, hospitality or any
beneficial offer (apesb.org.au 2018). More specifically, APES 110, Section 110, Integrity states
that the auditors are needed to be clear-cut and honest in all the business relationships. These
regulations can be connected with the provided situation of Jenny Wang. According to the above
discussion, it can be said that Jenny Wang will be responsible for breaching the APES 110
ethical principles of Integrity in case she accepts the offer to buy a car on 20% discount on the
discounted price from her audit client, Panania Cars Pty Ltd. Overall, it will lead to the volition
of fundamental ethical principles of auditing (Eilifsen et al. 2013).
Requirement B
According to the given scenario, it is the responsibility on Katrina Wearne to conduct the
audit of Lancom Cosmetics for November and December 2018. The provided situation shows
that the company has gifted Katrina Wearne $350 worth cosmetics as Christmas gift. Similarity
of this situation can be seen with the above case. As per APES 110, Section 260.2, Gifts and
Hospitality, in case the client organizations offer or provide any gift to the auditors, this can
contribute towards the creation of threat to audit ethical principles (apesb.org.au 2018). More