Question 1: Ernie Dengate breached the principle of Confidentiality

Question 1.
a. Ernie Dengate breached the principle of Confidentiality – The member having sought
only the permission to release tax working papers, he wasn’t supposed to disclose the
other working papers to the new accountant, Jago. Section 140 of Australian Accounting
Standards, requires all members to refrain from disclosing information confidential to an
organization unless seeking relevant information from the client or by the court order
legal proceeding. Even after members’ service termination with the client, is not
supposed to disclose any information unless permitted or has the professional duty to
do so. In this, Ernie should have obtained the relevant permission before disclosing the
other working papers, (Louwers, et.al., 2015).
b. In regards to Fred Nerk, a public accountant case, it may lead to creating a conflict of
interest which can consequently result in a threat to objectivity or professional
behavior. The auditing standards require the independent auditor to ascertain and
provide an assurance to the books of account. But in this case, the same member doing
the bookkeeping is doing the audit, this can adversely affect the opinion of the report by
compromising their professional judgment.
c. All good does not guarantee the information confidentiality for its client "Branch
Company" since the information stored in different computers can easily leak. Thus, the
principle of confidentiality is not observed.
d. The accounting and auditing body requires all members be it on the line of duty or
representing the public conduct themselves in a manner which does not disrespect or
disrepute the profession. In this case, James Jameson wasn't on the line of duty and
therefore he does not violate the code of ethics. Alternatively, Jame Jameson and its
company represent the public image and therefore he should have not conducted
himself in a manner which may create a bad image for the company and therefore
violating the principle of professional behavior.
e. It is unethical for an Australian auditing firm to disclose the clients’ information without
its consent. As it is required, confidentiality should be always maintained and the
Mortdale Accounting firm should not have provided the working papers to the

Penshurst Accountants for peer review without consent from its clients. Alternatively, in
this case of the peer review, the member has the professional right to disclose the
information for quality review if not prohibited by the law. Please note, Australian legal
and regulatory advises members to first seek consent, (Deegan, 2012).
f. Local public accounting firm by not contacting Jan's current employer may create the
threat to integrity. The practicing member should be trustworthy and honest. In the
event of an appointment of the member, the employer shall obtain appointee
information in order to safeguard violation of such fundamental principles and also
securing clients' images.
g. Regular contacting of clients’ firm by the Wendal Sailor can create self- interest threat
which can compromise the fundamental ethical principles. By selling other services to
the same clients, creates a business relationship which to the same level affects the
professional services.
h. Judith being a partner on an audit of not for a profit charitable organization and the
same time an honorary board member inflict the fundamental principles of accounting
and auditing. In this case, she creates familiarity and self-interest threats which can
consequently influence and affect professional audit outcome. This also damages the
principle of objectivity since Judith engagement with an organization compromises the
audit functions, (Flood, 2012).
Question 2
a. Unqualified opinion /clear opinion – With no material misstatement presented, and
with an assurance that no additional information is held for future, and having all
information required given and the financial statement presenting a free and fair
view. Then, the auditor can give the unqualified opinion in this case.
b. Advance opinion – Having the client not adhering with the Australian accounting
standard, does not guarantee to present a free and fair view of the financial
statement. Non-adherence with the standards signifies presentation of the