Salim is the audit manager of a team engaged on the audit of a listed company. During his initial discussion with the chief executive officer (CEO) of the company, he was informed that pandemic depressed economic conditions have badly affected the company and its liquidity. Due to uncertainty about the future of the company, certain key employees have left including several staff members of accounting and finance department. Consequently, the accounting records are in a bad shape and the management is making efforts to complete the draft accounts quickly. CEO therefore requested Salim to carry out necessary accounting work and to help prepare the annual financial statements at a fee to be agreed mutually. Do you think there is a kind of threat to the fundamental principles of professional ethics in the above situation? • Explain the extent of support that can be offered by the auditors, in the above situation in guidance of Professional Accountants' code of ethics.

Salim is the audit manager of a team engaged on the audit of a listed company. During his initial discussion with the chief executive officer (CEO) of the company, he was informed that pandemic depressed economic conditions have badly affected the company and its liquidity. Due to uncertainty about the future of the company, certain key employees have left including several staff members of accounting and finance department. Consequently, the accounting records are in a bad shape and the management is making efforts to complete the draft accounts quickly. CEO therefore requested Salim to carry out necessary accounting work and to help prepare the annual financial statements at a fee to be agreed mutually. Do you think there is a kind of threat to the fundamental principles of professional ethics in the above situation? • Explain the extent of support that can be offered by the auditors, in the above situation in guidance of Professional Accountants' code of ethics.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Salim is the audit manager of a team engaged on the audit of a listed company.
During his initial discussion with the chief executive officer (CEO) of the
company, he was informed that pandemic depressed economic conditions have
badly affected the company and its liquidity. Due to uncertainty about the future
of the company, certain key employees have left including several staff members
of accounting and finance department. Consequently, the accounting records are
in a bad shape and the management is making efforts to complete the draft
accounts quickly. CEO therefore requested Salim to carry out necessary
accounting work and to help prepare the
annual financial statements at a fee to be agreed mutually.
Do you think there is a kind of threat to the fundamental principles of
professional ethics in the above situation?
Explain the extent of support that can be offered by the auditors, in the
above situation in guidance of Professional Accountants' code of ethics.

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