The Directors of Aspen PLC have recently appointed your audit firm to act as their external auditor. Aspen PLC is a FTSE-250 fast growth company specialising in cloud computing solutions. As part of the audit services, you have been requested by the Directors of Aspen PLC to undertake the following services: ▪ the external audit of the company’s annual financial statement ▪ taxation services; and ▪ consultancy services relating to the trialling and implementation of a new, stateof-the-art information technology system Your audit firm has not worked for Aspen PLC before but does act as auditor for its biggest rival, another FTSE-250 company Priory Mason PLC. Required: (a) Identify and explain the professional and ethical issues that your firm should consider with regards to the services requested by Aspen PLC, stated above. What safeguards should be implemented to address these issues
The Directors of Aspen PLC have recently appointed your audit firm to act as their
external auditor. Aspen PLC is a FTSE-250 fast growth company specialising in cloud
computing solutions.
As part of the audit services, you have been requested by the Directors of Aspen PLC
to undertake the following services:
▪ the external audit of the company’s annual financial statement
▪
▪ consultancy services relating to the trialling and implementation of a new, stateof-the-art information technology system
Your audit firm has not worked for Aspen PLC before but does act as auditor for its
biggest rival, another FTSE-250 company Priory Mason PLC.
Required:
(a) Identify and explain the professional and ethical issues that your firm should
consider with regards to the services requested by Aspen PLC, stated above. What
safeguards should be implemented to address these issues?
(b) Critically discuss the five key principles of ethics.
(c) An auditor must never disclose a client’s affairs to a third party. To whom shall the
auditor disclose the information if the client company has been found guilty of an
unlawful act?
Audit is an independent examination of financial information of an entity.
Auditor should always behave independently, to ensure that the audit is conducted in the best possible way.
Independent is a state of mind and appearance.
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