Chapter 1, Problem 44FF

a.

To determine

Introduction: Auditor’s independence implies that auditors are required to be independent while conducting audit so that audit opinion is unbiased and is unaffected by the influence of others.

To explain: The reason due to which owning stock in client’s organization is considered as inappropriate.

b.

To determine

Introduction: Auditor’s independence implies that auditors are required to be independent while conducting audit so that the audit opinion is unbiased and is unaffected by the influence of others.

To examine: the reasons due to which it is important that auditors be independent of their clients.

c.

To determine

Introduction: Auditor’s independence implies that auditors are required to be independent while conducting audit so that audit opinion is unbiased and is unaffected by the influence of others.

To explain: The reason due to which Firm D took Auditor F’s actions so seriously.

d.

To determine

Introduction: Opportunity is referred as situations that increases the opportunity for a perpetrator to commit fraud and reduces the risk of getting caught. Weakness in internal controls and complex transactions are the basic factors which increases the opportunity to commit fraud.

To examine: The reasons due to which Auditor F has to make such poor professional and ethical decisions.

e.

To determine

Introduction: Auditor’s independence implies that auditors are required to be independent while conducting audit so that audit opinion is unbiased and is unaffected by the influence of others.

To explain: The procedures that a team member would undertake to report the inappropriate behavior while keeping the career protected.