Accounting & Finance - Auditing Question 6:Your audit firm has an advertising policy that any audit process will not take more than 20 days for any client. You start reviewing the audit files of your client ALB plc which you audit for eight years and you find the following notes.The audit team included a manager who owns 1% of the ALB’s shares. The executive partner believes that the 1% is too small and it will not affect the manager experience.Your firm offered this client a bookkeeping service for this year.One of the audit team received a high salary offer to be appointed in the client’s internal audit department as a head of department.The finance director was recently working as an auditor in your audit firm.ALB plc intends to increase its capital by issuing more shares in the stock market and the financial manager is asking your firm to manage this process. Required: Identify and explain FIVE ethical threats which arise from the above actions and for each ethical threat explain the steps which your audit firm should adopt to reduce the threats arising. Note: Prepare your answer using three columns headed The Issue, Ethical threats and Auditor’s response respectively

Following is the required chart

Answered: Accounting & Finance - Auditing…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Accounting & Finance - Auditing

Question 6:

Your audit firm has an advertising policy that any audit process will not take more than 20 days for any client. You start reviewing the audit files of your client ALB plc which you audit for eight years and you find the following notes.
- The audit team included a manager who owns 1% of the ALB’s shares. The executive partner believes that the 1% is too small and it will not affect the manager experience.
- Your firm offered this client a bookkeeping service for this year.
- One of the audit team received a high salary offer to be appointed in the client’s internal audit department as a head of department.
- The finance director was recently working as an auditor in your audit firm.
- ALB plc intends to increase its capital by issuing more shares in the stock market and the financial manager is asking your firm to manage this process.

Required:

Identify and explain FIVE ethical threats which arise from the above actions and for each ethical threat explain the steps which your audit firm should adopt to reduce the threats arising. Note: Prepare your answer using three columns headed The Issue, Ethical threats and Auditor’s response respectively

Expert Solution

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions