Principles of Auditing - Assignment
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Added on 2021-06-14
Principles of Auditing - Assignment
Added on 2021-06-14
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Running head: PRINCIPLES OF AUDITINGPrinciples of AuditingName of the StudentName of the UniversityAuthor’s Note
1PRINCIPLES OF AUDITINGTable of ContentsPart A...............................................................................................................................................3Answer to Part A-1......................................................................................................................3Answer to Part A-2......................................................................................................................3Answer to Part A-3......................................................................................................................4Answer to Part A-4......................................................................................................................4Situation 1................................................................................................................................4Situation 2................................................................................................................................5Situation 3................................................................................................................................6Situation 4................................................................................................................................6Part B...............................................................................................................................................7Part C...............................................................................................................................................8Requirement (a).......................................................................................................................8Requirement (b).......................................................................................................................9Requirement (c).......................................................................................................................9Requirement (d).....................................................................................................................10Answer to Part C-2....................................................................................................................10Requirement (a).....................................................................................................................10Requirement (b).....................................................................................................................10
2PRINCIPLES OF AUDITINGRequirement (c).....................................................................................................................11Requirement (d).....................................................................................................................11Part D.............................................................................................................................................11References......................................................................................................................................14
3PRINCIPLES OF AUDITINGPart AAnswer to Part A-1As per APES 110, Section 210, Professional Appointment, while accepting the auditengagement, it is necessary for the auditors to determine whether there is any negative effect ofthis engagement on the ethical and fundamental principles of the profession or not (Chapple etal. 2014). This aspect leads the auditors to obtain sufficient understanding and knowledge aboutthe client and its management for ascertaining any corporate governance or ethical issue. As perthis standard, the auditor of Billing and Associates is required to take into consideration twoethical aspects. First, the auditor is required to take into consideration the toxic chemical spillfrom the manufacturing process into the river. Second, the auditor also needs to considerPharmaceuticals management’s involvement in covering up the unethical situation. Thus, boththe scenario clearly shows breach of ethical code of conduct that has negative impact on thefundamental as well as ethical principles of auditing (Chapple et al. 2014). Answer to Part A-2The next step for the auditor of Pharmaceuticals after identifying the errors and controlweakness is to suggest the management of Pharmaceuticals on how they can strengthen theinternal control so that the repeat in the errors can be avoided. The next step is the issue ofqualified audit opinion that is not much different from the unqualified audit report. The main aimof the issue of qualified audit opinion is to inform the key stakeholders of Pharmaceuticals aboutthe hedging related issues faced by Pharmaceuticals. As a part of qualified audit opinion, theauditor will provide the explanation of issuing qualified audit opinion in the audit report(Czerney, Schmidt and Thompson 2014).
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