Advance Auditing: Global Communications Case - Ethical Considerations

This report provides a comprehensive analysis of the Global Communications case, where MMPA, a chartered accountant firm, serves as the external auditor. The case involves the firm's engagement with Global Communications, a Canadian media company, and discusses the firm's potential expansion of services beyond the standard financial statement audit. The analysis focuses on the objectives of determining MMPA's eligibility to provide additional services, considering the fundamental principle of auditor independence and its relation to conflicts of interest. The report outlines what actions MMPA should take, emphasizing the importance of maintaining independence and avoiding engagements that could compromise it, such as bookkeeping or tax return preparation. The discussion covers the ethical requirements for auditors, including integrity, objectivity, and professional competence, as defined by Canadian regulatory bodies. The analysis identifies various threats to auditor independence, such as self-interest, self-review, advocacy, familiarity, and intimidation threats. The report concludes with recommendations for MMPA, stressing the need to adhere to ethical codes and regulations to maintain independence and objectivity, and to decline engagements that could compromise these principles. The conclusion emphasizes the importance of unbiased opinions for financial statement users and the potential undue influence from clients. The provided references include relevant books, journals, and online resources related to auditing and auditor independence.