TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3CLARKE & JOHANSON CASE STUDY......................................................................................3a) Evaluation of threats in relation to auditor independence.......................................................3b) Safeguards for identified threats..............................................................................................4CRAMPTON AND HASSAD CASE SCENARIO........................................................................5a) Business risks to MSL.............................................................................................................5b) Audit risk and results to reduce these risks.............................................................................6CONCLUSION................................................................................................................................7REFERENCE...................................................................................................................................92
INTRODUCTIONAuditing and assurance services are essential for gaining organization's actualperformance as well different ideas, guidelines achieved for proper management. However, risksoccur at workplace and solutions to reduce are guided by chartertered accountant or any certifiedpublic accountants. The present report is based on understanding case studies related to auditingand assurance services for Clarke & Johanson as well Crampton and Hassad to present risks/threats including safeguards for them. In this regard, auditor independence and occurred threatsincluding their safeguards are to described. Along with this, business risks and different ideas fordecreasing risks can be expressed through this assignment. Hence, learners are able tounderstand significance of auditing and assurance services for both business entities through thisreport. CLARKE & JOHANSON CASE STUDYa) Evaluation of threats in relation to auditor independenceAuditor independence is an complex approach that considers as independence of auditorsfrom parties that have interest in business that is to be audited. Therefore, different risks andthreats are obtained to present company's efficiency. As per the given case scenario, a businessscenario of Clarke and Johanson (a travel company) is presented (Kend, Houghton and Jubb,2014). Under which, Geoff is audit partner and Chris is CEO of the organization. However, it issuggested for firm re-engaged as auditor for upcoming audit of 30th June 2015 financial report. Inaddition to this, Michel and Anette are auditor's partners who work as first year accountant andCJ's tax advisory department accountant respectively. In this process, Geoff suggested someissues related to auditor's independence by identifying conversations with Chris, Michel andAnnette. However, different threats can be arised for auditing are to be understood as below:-Self interest threat:- In first situation, Chris wants to reappoint CJ as auditor to checkout financial statements of the company for next upcoming auditing. However, there isself interest threat occurred for selecting that auditor who has been audited in previousyears. On the contrary, it can be considered that there is any personal self interestbetween both parties regarding business activities (Sanderson, 2013). Therefore, thiskind of threat can be raised for auditing in next upcoming future auditing.3
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