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Question 1 James Bromley Disclosure of Tax Information and Helpful Information to a New Account is not Violation of Ethics Standards

   

Added on  2020-04-07

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Question 1 James Bromley Disclosure of Tax Information and Helpful Information to a New Account is not Violation of Ethics Standards_1
Question 1a)James Bromley disclosing tax information and helpful information to a new account is not violation of ethical standards. James has permission from his client to reveal the auditand tax information to the Jayne Godfrey who will be the new auditor. James providing other information information regarding the client product, services and potential servicesis within the auditing standards of professionalism. This practice doesn’t interfere with the integrity, independence, and objectivity of the auditing standards. James orderly handover to Jayne will enhance professional competence which is within his due care. This professional behavior by James to disclose important information about the firm to be audited is in accordance with Auditing Standards section 304 and 204 on knowledge of the business and terms of enganagement respectively.b) Fred Hingarra who is an auditor coming back to practice auditing after spending several years in another profession is a violation of ethical principles. Fred violets the principle of being professionally competent after being away from the industry for six years. Six years is a long time to lose competence in undertaking auditing of a public company. Secondly, Fred action to get a professional indemnity insurance for his work is against the due care princinple of auditing. The auditor should be ready to take duty of care of hisactions and opinion (Carey, Subramaniam, and Ching, 2006). c)Asquith Accountants advertising in a local paper is a violation of auditing ethics and principles. The firm giving special offer to clients is a form of persuading them to get the job of auditing. An advertisement in a local paper by an auditing firm to provide tax refund within 10days violates the principles of integrity through unprofessional behavior. The advertisement to appeal to a client also violets the principle of objectivity that cautions auditors from participating in activities that can impair or presume to impair unbiased assessment. d)Amy Harris taking a role of treasurer in a local not for profit business is not a violation ofethical principles. The local athletic club is not audited by the company that Amy works for. This shows that Amy Harris taking this position will not interference with her ability to execute her job as an auditor. The independence of an auditor will not be threaten by a post of treasurer in a not for profit organization. Therefore, there will be no violation of
Question 1 James Bromley Disclosure of Tax Information and Helpful Information to a New Account is not Violation of Ethics Standards_2
the auditing ethical principle of Amy taking the position and continuing her job as an auditor.e)Simtec Ltd advice to Gordan Accountants firm about the appropriateness of the final report is a violation of the ethical principles. First, the advise violets the independence of the auditors. The auditors’ independence to present the true and fair opinion of the financial statements of the company is threatened. This means that the Gordon Accountants actions and opinion will be influenced to one side. The auditor will be required to give a certain opinion in order to get his pay. Secondly, there is violation of the objectivity principle where the auditor is being involved in activities that are likely to impair unbiased opinion (O'Leary, and Stewart, 2007). This means that the auditor will be forced to give a biased opinion. This will also impair the professional judgment of an auditor. Lastly, the management of Simtec violent the terms of engagement with the auditing firm as stipulated in the Auditing standards AUS 710. f)David Dale entering into contact with Cheap Insurance Company is a violation of ethical principles. David’s action violates the ethical principle of confidentiality. The Cheap Insurance Company wants David to use the information he has from the auditing process to recommend clients. First, this will lead to David using the information from the audited firms without their authority. Secondly, the David uses the audited information for personal benefits. The Cheap Insurance Company is promising 5% for every client that David will get. This is against the confidentiality principle that requires respect the value of information they acquire in the process of auditing (Craswell, Stokes, and Laughton, 2002). The auditor should protect the information acquired. Lastly, it against the law and objectives for an auditor to use audit information for personal gain. Therefore, David will be violating confidentiality ethical principle.Question 2a)Ellen Davis taking the role in the audit team that will audit Jenkins Ltd threats the independence of the auditing process. Ellen Davis worked as a senior accounts manager for Jenkins Ltd and therefore can be used to audit the financial statements
Question 1 James Bromley Disclosure of Tax Information and Helpful Information to a New Account is not Violation of Ethics Standards_3

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