Bundle: Auditing: A Risk Based-approach, 11th + Mindtap Accounting, 1 Term (6 Months) Printed Access Card
Bundle: Auditing: A Risk Based-approach, 11th + Mindtap Accounting, 1 Term (6 Months) Printed Access Card
11th Edition
ISBN: 9781337734455
Author: Karla M Johnstone-zehms, Audrey A. Gramling, Larry E. Rittenberg
Publisher: Cengage Learning
Question
Book Icon
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.

Blurred answer
Students have asked these similar questions
Directions: Read the case below and answer the questions that follow.Whitehead, CPA, is planning the audit of a newly obtained client, Henderson Energy Corporation, for the year ended December 31, 2016. Henderson Energy is regulated by the state utility commission, and because it is a publicly traded company the audited financial statements must be filed with the Securities and Exchange Commission (SEC).Henderson Energy is considerably more profitable than many of its competitors, largely due to its extensive investment in information technologies used in its energy distribution and other key business processes. Recent growth into rural markets, however, has placed some strain on 2016 operations. Additionally, Henderson Energy expanded its investments into speculative markets and is also making greater use of derivative and hedging transactions to mitigate some of its investment risks. Because of the complexities of the underlying accounting associated with these activities, Henderson…
you have recently been appointed as auditor to Johnson Plc; a company whose shares are traded on the Stock Exchange. The Directors of Johnson Plc have recommended that you perform the following services . (i) The statutory audit of the annual financial statements. (ii) Taxation services, and (iii) Consistency services in respect of the implementation of a new information technology system Your firm has not acted for Johnson Plc before but does act as auditor for one of the major competitors. (a) Identify and explain the professional and ethical issues that should have been identified by your firm in relation to the provision of the services outlined above, and describe the safeguards that should be in place in order to address these issues. (including Citations/references) (b) What are the fundamental principles of ethics? Briefly explain their meaning (including Citations/references) (c) A client’s affairs should not be disclosed to third parties. However where a client has been…
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 systemYour 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…

Chapter 1 Solutions

Bundle: Auditing: A Risk Based-approach, 11th + Mindtap Accounting, 1 Term (6 Months) Printed Access Card

Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub
Text book image
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning