The Head of the accounting department, Mr. Rajah Singh, is a self-made accountant with an only a grade 9 school leaving certificate and 30 years' experience as an accountant in the business. Mr Rajah Singh receives his technical support on business and financial reporting matters from his trusted high school teacher who has retired some 10 years ago. The senior staff in the accounting department is appointed based on sanguine (blood) linage and generation hierarchy of the family tree. Often the development of these appointments is under the tutelage and mentorship of Mr Rajah Singh. There has been continued resistance from Mr. Rajah Singh to implement a fully automated accounting information system despite requests by the board to look at a more integrated accounting solution that feeds into the business as whole. (a) Discuss the potential financial reporting risks associated with the employment of staff and the structure of the accounting department. (b) Discuss the factors that must be taken into consideration when determining whether the company requires a compilation, independent review, or audit to comply with the financial reporting requirements (c) Discuss whether the Professional Accountants provide "assurance" when performing a compilation of financial statements as part of the Agreed upon Engagement with their clients
The Head of the accounting department, Mr. Rajah Singh, is a self-made accountant with an only a grade 9 school leaving certificate and 30 years' experience as an accountant in the business. Mr Rajah Singh receives his technical support on business and financial reporting matters from his trusted high school teacher who has retired some 10 years ago. The senior staff in the accounting department is appointed based on sanguine (blood) linage and generation hierarchy of the family tree. Often the development of these appointments is under the tutelage and mentorship of Mr Rajah Singh. There has been continued resistance from Mr. Rajah Singh to implement a fully automated
(a) Discuss the potential financial reporting risks associated with the employment of staff and the structure of the accounting department.
(b) Discuss the factors that must be taken into consideration when determining whether the company requires a compilation, independent review, or audit to comply with the financial reporting requirements
(c) Discuss whether the Professional Accountants provide "assurance" when performing a compilation of financial statements as part of the Agreed upon Engagement with their clients
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