Auditing and Assurance Doc

Running head: AUDITING AND ASSURANCE
Auditing and Assurance
Name of the Student
Name of the University
Author’s Note

1AUDITING AND ASSURANCE
Table of Contents
Answer for 1st question....................................................................................................................2
(a).................................................................................................................................................2
(b).................................................................................................................................................2
(c).................................................................................................................................................3
(d).................................................................................................................................................3
Answer to the 2nd question...............................................................................................................4
(a).................................................................................................................................................4
(b).................................................................................................................................................5
(c).................................................................................................................................................5
Answer to the 3rd question...............................................................................................................6
(a).................................................................................................................................................6
(b).................................................................................................................................................7
(c).................................................................................................................................................7
References........................................................................................................................................9

2AUDITING AND ASSURANCE
Answer for 1st question
(a)
With respect to the case study it can be stated that tax guarantee is being provide by
Berowra Accountants to their clients with reference to a special advertisement. Thus this
situation mandates the understanding in relation to the tax fund concept. The difference between
tax owed and tax paid is terms as tax refund. In addition tax refund may be availed by an
organization in situation where the tax liability is lower than tax paid by them. The profit ,
income and tax expenses of the organization are used to determine its eligibility for tax refunds.
No auditor can thus make an express guarantee for tax refund. In addition the auditors have the
responsibility of locating any misstatement in relation to financial accounting. Thus in case of
tax refund the service is of non-audit nature. Therefore under APES 110 Code of Ethics for
Professional Accountants, Section 130 actions of Berowra Accountants is a violation of
Competence and Due Care principle. They failed to stay within professional limits in relation to
their actions in accordance to the provisions of the profession al code of conduct.
(b)
It has been stated through the facts of the case study that a local club has asked Jamie to
act as the treasurer of their club. Jamie is also a professional auditor at a charter accounting firm.
He is also accustomed of auditing only large organizations. The categorization of athletic clubs is
done under non-profit societies (Galit and Metaban 2012).. As per the provisions of section 210
APES 110 Professional Appointment when an auditor is accepting an appointment by a new
client it has to be determined by him that whether the appointment is going to be a hindrance in
compliance of basic principles of audit towards ethics. In the given situation no breach of ethical

3AUDITING AND ASSURANCE
principles can be foreseen where Jamie accepts the proposal of the local club. There is no
identified connection between the work of Jamie as an auditor of large public organizations and a
treasurer of the local club. In addition appointment as a treasurer of a nonprofit organization does
not affect any ethical principles. Thus the action of Jamie is to be considered within the limits of
ethics (Han Fan, Woodbine and Cheng 2013).
(c)
The provided situation states that whether or not payment would be made to the auditors
who in this case are Pymble Accountants relies upon the appropriateness of the audit opinion in
relation to the audit clients who in this case are Monlec Ltd. In addition it a demand of an audit
report which is favorable to them has been demanded from the client Monlec Ltd. However the
auditors in this context must consider that through the virtue of their profession they actually
have to represent the shareholders and investors and not their clients. With respect to the
provisions of section 120 of the APES 110 Principle of Objectivity the auditors have the duty of
not manipulating their reasonable judgment under any form or pressure and avoid a situation
resulting in a conflict of interest. Thus the auditors must not change their audit report under any
biasness or influence (Kuan 2014). The principle of objectivity of auditing would be expressly
violated by the auditors in case they indulge in providing a report to the clients which is in their
favor unreasonably. On the other hand no ethical or legal principle will be violated if the auditors
act with integrity and make a reasonable and correct audit.
(d)
In relation to this part it has been given through the facts of the case that all papers and
report of Motoring services have been provided by Winton Accountants to Chadwick Chartered
Accountants. In this situation it is the responsibility of Chadwick Chartered Accountants to