Case 1 Mark Proctor, a registered auditor arranged with some of his clients to pay the fees that he charged for audit services, in cash. For clients who agreed to do so, no VAT was charged and a discount was given. Case 2 Because the budget for the audit of Afrimat Ltd would be exceeded and because he felt that, he had a competent audit team, A Smith the registered auditor in charge of the audit decided not to spend the necessary time on reviewing the work papers of the audit team. Case 3 Clark Parker the registered auditor in charge of the audit of Datatec Ltd, made racist comments concerning the client’s staff during the audit planning session. Case 4 Peter Kent the registered auditor in charge of the audit of Advetech Ltd, charged the client a fee for audit procedures that he knew had not actually been carried out. Case 5 Scott Temple, the registered auditor in charge of the audit of Crookes Brothers Ltd, failed to identify the misapplication by the client of an important accounting policy. The misapplication resulted in a material overstatement of the company’s profit. Case 6 During the planning stage of the audit of Delta Financial Services Ltd, a company which invests money on behalf of its clients, Andre Richter the registered auditor in charge of the audit, was given access to the investment strategy which the company intended to adopt. Andre noted the listed shares which Delta Financial Services Ltd intended to purchase and instructed his own stockbroker to immediately purchase a number of these shares for Andre Richter’s family trust. REQUIRED 1.2 Identify, with a brief explanation which of the fundamental principles have not been complied with in each of the situations above.(Each situation may amount to non-compliance with more than one principle)
Case 1
Mark Proctor, a registered auditor arranged with some of his clients to pay the fees that he charged for audit
services, in cash. For clients who agreed to do so, no VAT was charged and a discount was given.
Case 2
Because the budget for the audit of Afrimat Ltd would be exceeded and because he felt that, he had a
competent audit team, A Smith the registered auditor in charge of the audit decided not to spend the
necessary time on reviewing the work papers of the audit team.
Case 3
Clark Parker the registered auditor in charge of the audit of Datatec Ltd, made racist comments concerning
the client’s staff during the audit planning session.
Case 4
Peter Kent the registered auditor in charge of the audit of Advetech Ltd, charged the client a fee for audit
procedures that he knew had not actually been carried out.
Case 5
Scott Temple, the registered auditor in charge of the audit of Crookes Brothers Ltd, failed to identify the
misapplication by the client of an important accounting policy. The misapplication resulted in a material
overstatement of the company’s profit.
Case 6
During the planning stage of the audit of Delta Financial Services Ltd, a company which invests money on
behalf of its clients, Andre Richter the registered auditor in charge of the audit, was given access to the
investment strategy which
the company intended to adopt. Andre noted the listed shares which Delta Financial Services Ltd intended to
purchase and instructed his own stockbroker to immediately purchase a number of these shares for Andre
Richter’s family trust.
REQUIRED
1.2 Identify, with a brief explanation which of the fundamental principles have not been complied with in each
of the situations above.(Each situation may amount to non-compliance with more than one principle)
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