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Auditing Negligence Case Study

   

Added on  2020-03-04

12 Pages2753 Words114 Views
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Running head: ACCOUNTING STANDARDS Accounting StandardName of the StudentName of the UniversityAuthor Note
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1ACCOUNTING STANDARDS Executive summary Accountants have to abide by not only ethical guidelines but also legal provisions. Thepurpose of this business report is to address two problems in relation to Miller Yates Howarth(MYH) an accounting firm with offices throughout the major regional centres of NSW andQueensland. The problem is related to one ethical issue and ne legal issue. The ethical issue issolved by the report through the application of the seven step American AccountingAssociation problem solving model. The legal issue in the scenario has been addressedthrough the identification of the issue, discussing the relevant legal provisions as provided byrelevant case laws, applying such provisions to the facts of the scenario and coming to anappropriate solution.
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2ACCOUNTING STANDARDS Table of ContentsQuestion 1..................................................................................................................................3Step 1: Identification of the facts............................................................................................3Step 2: Identification of ethical issues....................................................................................3Step 3: Identification of the relevant norms...........................................................................4Step 4: Stating the alternative course of action which can be taken in this scenario.............4Step 5: Identification of the best possible course of action which can be taken in relation tothe scenario.............................................................................................................................5Step 6: Understanding the consequences which might arise out of the alternative course ofaction......................................................................................................................................5Step 7:Coming to the final decision.......................................................................................6Question 2..................................................................................................................................6Issue........................................................................................................................................6Applicable Law......................................................................................................................6Application.............................................................................................................................8Conclusion..............................................................................................................................9References................................................................................................................................10
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3ACCOUNTING STANDARDS Question 1 American Accounting Association 7 step ethical problem solving model (Horizons,2017).Step 1: Identification of the factsJacqui is one of the senior auditors at MYH Along with accounting knowledge she has knowledge about environmental issueswhich are currently going on in the countryShe has been appointed to Audit the financial report of Morgan fertilizersMorgan fertilizers and one of the most old clients of the firmJacqui has discovered that modern fertilizers have changed their waste managementcontractor to Dumparound Ltd who according to her knowledge are undergoinginvestigation for toxic waste dumping by the local Council.Barry the in charge of audit at the firm has advised Jacqui to only concentrate onproviding a correct financial report as she is not qualified to judge whether a companyis good or not.Step 2: Identification of ethical issues The ethical issues which have been identified in this scenario to be at stake are:Should Jacqui ignore the knowledge she has and only concentrate on providing acorrect financial report to Morgan fertilizers which may result in a significant loss forthemShould Jacqui abide by the principles of the firm as provided by Barry and notindulge in giving any extra advise rather than providing a correct financial reportShould Jacqui ignore the fiduciary duty she may owe to Morgan fertilizers as she isthe professional accountant
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