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Your firm is the auditor of Happy Days, an entity that provides hospitality packages at racecourses around a single country. The managing director of Happy Days has suggested the following to your managing partner: i. All members of the audit team to be offered two free tickets to a major event at the racecourse of their choice, ii. last year’s audit senior should be seconded to the organization for a six-month period. The current year’s audit is not yet underway, iii. the firm also provides internal audit services. Discuss which, if any of the above proposals would be acceptable to your firm and (if not state why not), and set out the main safeguards, if any, which would be required.

Your firm is the auditor of Happy Days, an entity that provides hospitality packages at racecourses around a single country. The managing director of Happy Days has suggested the following to your managing partner: i. All members of the audit team to be offered two free tickets to a major event at the racecourse of their choice, ii. last year’s audit senior should be seconded to the organization for a six-month period. The current year’s audit is not yet underway, iii. the firm also provides internal audit services. Discuss which, if any of the above proposals would be acceptable to your firm and (if not state why not), and set out the main safeguards, if any, which would be required.

Auditing: A Risk Based-Approach (MindTap Course List)
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter9: Auditing The Revenue Cycle.
Section: Chapter Questions
Problem 15RQSC
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Your firm is the auditor of Happy Days, an entity that provides hospitality packages at racecourses around a single country. The managing director of Happy Days has suggested the following to your managing partner:
i. All members of the audit team to be offered two free tickets to a major event at the racecourse of their choice,
ii. last year’s audit senior should be seconded to the organization for a six-month period. The current year’s audit is not yet underway,
iii. the firm also provides internal audit services.

Discuss which, if any of the above proposals would be acceptable to your firm and (if not state why not), and set out the main safeguards, if any, which would be required.

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