Auditing Assignment Question Answer 2022

Running head: AUDITING ASSIGNMENT
Auditing Assignment
Name of the Student
Name of the University
Author’s Note

1AUDITING ASSIGNMENT
Table of Contents
Answer to Question 1a.........................................................................................................2
Answer to Question 1b........................................................................................................2
Answer to Question 1c.........................................................................................................3
Answer to Question 1d........................................................................................................3
Answer to Question 1e.........................................................................................................4
Answer to Question 1f.........................................................................................................5
Answer to Question 2a.........................................................................................................5
Answer to Question 2b........................................................................................................6
Answer to Question 2c.........................................................................................................7
Answer to Question 2d........................................................................................................7
References............................................................................................................................9

2AUDITING ASSIGNMENT
Answer to Question 1a
As per “APES 110 Code of Ethics for Professional Accountants”, the relevant part
applicable for the given situation is seen with “Part B – Members In Public Practice”. This
section informs the clients for writing of commission received and referral fees. Based on the
given situation Alred Jarmon has frequently recommended the clients to take service from
Computer Service Ltd. Moreover, Computer Service Ltd. has decided to pay a commission of
10% as referral leads. This is directly associated to breach of “Section 210 Professional
Appointment”. This section obligates the members in public practice for accepting an
engagement in professional appointment. A similar breach may be inferred in terms of “CPA
Australia’s Client Relationship Guide”. The breach of code of ethics may be also considered
with “Section 280 Objectivity – All Services”. This section states that while providing any
professional service the members in public practice are required for determining whether there is
any instance of threat of compliance. For instance, in this case the threat of objectivity may be
created having a close relationship Computer Service Ltd. with Alfred Jarmon (Barth 2015).
Answer to Question 1b
Based on the fundamental principle of the code of confidentiality, the given issue needs
to be resolved. The principle of confidentiality shows that in order respect the confidentiality of
information, professional and business relationships shall not disclose any information pertaining
to third parties. This cannot be done without approval of an appropriate authority unless
professional or legal guide is involved for disclosing any information for personal advantage
associated to the members of third parties. In the given case it is clearly seen that Wrench and
company allows its clients for using the computers as per their requirement (Yao, Percy and Hu
2015). These clients can be referred as third-party members. The company has also permitted the

3AUDITING ASSIGNMENT
staff from the audit section to assist input of data for such clients. This can be referred with
“Section 350 Inducements” which restricts the members of any business to influence the
judgement or decision making for the purpose of gathering confidential information. The breach
of confidentiality can be further inferred with “Section 220 Conflicts of Interest”. This prevents
the members to manipulate any information for personal gains (Benson et al. 2015).
Answer to Question 1c
Based on APES 110 the relevant section applicable for the given case is seen with section
“Part C – Members in Business”. This section states that even if members in business are
employed in a not-for-profit sector, they are liable to encounter serious threat of breaching
fundamental code of ethics. This part explains that threats may be encountered for safeguarding
the legislation, regulation or the work environment. As per the given case Katrina Ng is a
manager on conducting the audit for not for profit entity (Horngren and Harrison 2015).
Additionally, she is also regarded as a member of the board of directors, due to this she is not
able to involve herself in the management capacity of not-for-profit firm. This is directly
identified as a breach of “Part C – Members in Business” and the correct treatment for this
needs to be proceeded with including her acting in the not-for-profit firm. She may also consider
obtaining of legal advice in case it is believed with adoption of unethical behaviour. Due to the
application of this section she is also take the decision to resign from the employing organization
(Linnenluecke, Birt and Griffiths 2015).
Answer to Question 1d
In the given situation it can be clearly inferred that there has been breach of principle of
integrity. This principle expects the members of the organization to be straightforward and
honest in building professional business relationships. As per APES 110, “Sections 290 And