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Auditing Theory and Practice Assignment - doc

   

Added on  2020-05-28

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Running head: AUDITING THEORY AND PRACTICE Auditing theory and practiceName of the StudentName of the UniversityAuthor name
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1AUDITING THEORY AND PRACTICETable of ContentsAnswers of Question 1.....................................................................................................................21 A...............................................................................................................................................21 B................................................................................................................................................21C.................................................................................................................................................31D................................................................................................................................................4Answers of Question 2.....................................................................................................................42 A...............................................................................................................................................42B.................................................................................................................................................52C.................................................................................................................................................6Answers of Question 3.....................................................................................................................63A................................................................................................................................................63B.................................................................................................................................................73C.................................................................................................................................................7References........................................................................................................................................9
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2AUDITING THEORY AND PRACTICEAnswers of Question 11 AFrom the situation provided it can be said that Berowra Accountants are providing aguarantee of the tax refund to their clients via special advertising ways. In this case, it isworthwhile to know the basic concept of tax refund. To explain tax refund, it can be said that it isthe difference between the paid tax and the owed tax. To determine whether a businessorganization will receive a tax refund or not is totally dependent on the factors like the profit,income and the expenses regarding tax of the concerned business organization. It will not bepossible for the auditors to ensure a tax refund (Galit and Metaban 2012). Apart from that themajor responsibility of the auditors are to scrutinize the financial accounting of the businessorganizations to identify the material misstatement and also to check the compliances. Thus itcan be said that it would be definitely a non-audit service in case of tax refund. Due to thisreason as per APES 110 Code of Ethics for Professional Accountants, Section 130, the act ofBerowra Accountants has broke the principle of Professional Competence and Due Care (HanFan, Woodbine and Cheng 2013). According to this act, an auditor can retain their clients bygetting to know the limitations of the professions and in this case the accountants of Berowrahave not been able to do so. 1 BAs per the case study provided, Jamie Harvey, who is an auditor of a charter accountingfirm is been asked to take up the role of the treasurer of a local club and Harvey only does auditof large public organizations. it should be mentioned that the athletic clubs are considered to be
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3AUDITING THEORY AND PRACTICEnon-profit-organizations. As per APES 110 Professional Appointment, Section 210, whileaccepting an appointment of a new client, the auditors should determine whether the acceptanceof the appointment would affect the compliance of the basic ethical principles of audit. In thiscase, if the proposal of becoming the treasurer gets accepted by the auditor, there would not beany breach of principles due to some reasons (Ottaway 2014). The reasons are Harvey is theauditor of a large public concern and there is no relation between the operations of a largebusiness organization and local clubs. Another reason is that no basic ethical principle will beaffected in case of appointment in the organizations which are of non-profit category (Kuan2014). These are the reasons that ensure that there will be no issues which are ethical.1CIn the case provided, there is a situation mentioned where the payment of the auditor,which is payable Accountants is immensely dependent audit opinion that should be appropriateto the audit client Monlec Ltd. It explains that Monlec Ltd is asking for a favorable audit reportfrom the auditors. In this regard, it is worthwhile to mention that the auditors are therepresentatives of investors and the stakeholders; not the organizations. As per APES 110Principle of Objectivity, Section 120, the auditors should not conciliate their professional andbusiness judgment for any type of biasness, influence or any conflict of interest (Athanasiou2014). It explains that the judgment of the auditors must not be manipulated by any types ofbiasness or influence. As per the situation provided, if the audit report provided by the auditor isfavorable for Monlec Ltd, there will be a breach of objectivity principle of auditing. There shallnot be any violation of ethical principles of auditing if the auditors does not provide an opinionthat is biased (Trung 2015).
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