ACC300 Audit: Ethical Requirements and Audit Opinions

This assignment solution addresses two key questions related to auditing practices and ethical standards. Question 1 analyzes two scenarios, determining whether they breach the ethical requirements of APES 110. The first scenario examines Ernie Dengate's sale of his accounting practice and the release of working papers without proper permission, while the second scenario assesses Fred Nerk's provision of tax, management advisory, and audit services to the same clients, highlighting potential conflicts of interest. The solution identifies the specific ethical principles breached in each case. Question 2 focuses on audit opinions, requiring the student to determine the appropriate opinion type (e.g., qualified, adverse) for two situations. The first involves a new audit client and the absence of financial information on opening balances, while the second considers a scenario where the company does not comply with financial standards. The solution provides reasoned justifications for the chosen opinions, referencing relevant auditing standards like ASA 700.

Running head: AUDIT
Audit
Name of the Student
Name of the University
Author’s Note

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Table of Contents
Answers 1........................................................................................................................................2
Requirement [e]...........................................................................................................................2
Requirement [f]............................................................................................................................2
Answer 2..........................................................................................................................................3
Requirement [e]...........................................................................................................................3
Requirement [f]............................................................................................................................3
References........................................................................................................................................4

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Answers 1
Requirement [e]
The contracts of APES Code of Ethics with Expert Accountants
The components of the accounting practices of Ernie Debgate are taxation, secretarial
work and reviewing that he sold. He sold all these papers in the presence of his permission and
approval, but he does not have the required permission for others. Jago acquired the practices
from him and also gained all the papers of operation.
An auditor must comply with the norms of privacy. In case the subordinate is allowable
or obligatory, the nature of appointment needs to be taken into consideration at the time of
international trading of a client with a prospect bookkeeper; another two important factors are a)
in case there is approval from the client; or b) The legal as well as ethical aspects related to this
specific infrastructure as well as exposure can vary based on the authority. Thus, on the basis of
the above discussion, it can be said that he does not have any right for transferring the papers in
the absence of proper approval (apesb.org.au 2018).
For the above reason, Ernie Debgate will be responsible as well as liable as per Section
210 (apesb.org.au 2018).
Requirement [f]
As per the provided information, Fred Nark involves in delivering taxation services and
services for organizational advisory; at the same time, he conducts audit for the same firms. An
auditor does not have any right to provide the audit services to a firm along with providing other
non-audit or consultancy services. It needs to be mentioned that the maker of the financial

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statements cannot be the checker of the same. For this reason, Fred Nark will be responsible for
wrongdoing in the audit profession and will be held accountable as per Section 290 (apesb.org.au
2018).
Answer 2
Requirement [e]
According to the appointment in the new company as an auditor, it can be observed that
there is absence of any material misstatements in the financial statements of the present financial
year. For this reason, the audit client in not providing any financial information on the opening
balances due to the fact that there is not any material misstatement.
There is not any basis to accept the above matter. It is the right of the auditors for
checking the opening balances of the accounts even in the absence of any material misstatements
in the financial statements. According to the regulations of ASA 700 Forming an Opinion and
Reporting on a Financial Report, the auditors are responsible for providing the correct audit
opinion (auasb.gov.au 2018). For this reason, the auditor has all the rights for issuing an adverse
or disclaimer opinion in case the audit client is reluctant in providing any financial information.
As the client is not providing the appropriate financial information, the auditors are liable for
issuing adverse audit opinion (apesb.org.au 2018).
Requirement [f]
It is the prime responsibility of the auditors for verifying the compliance of the company
with the required financial standards and regulations in the process of financial reporting. After
conducting the required compliance check, the auditors can provide the audit opinion of the

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financial statements. For this reason, the auditor has the right for providing the qualified audit
opinion (apesb.org.au 2018).
References
Apesb.org.au., 2018. APES 110 Code of Ethics for Professional Accountants. [online] Available
at: https://www.apesb.org.au/uploads/standards/apesb_standards/standard1.pdf [Accessed 27
Nov. 2018]
Auasb.gov.au., 2018. Auditing Standard ASA 700 Forming an Opinion and Reporting on a
Financial Report. [online] Available at:
https://www.auasb.gov.au/admin/file/content102/c3/Jul13_Compiled_Auditing_Standard_ASA_
700.pdf [Accessed 27 Nov. 2018].