1. The ethical requirements of APES 110 have been breached in this scenario as the professional ethics does not allow the practicing firm to disclose the information collected during the audit and assurance procedure about the client without taking prior permission from him.
Mortdale accounting firm has conducted audit of several public companies from where he has collected working papers of the client. He has shared the information collected during the assurance procedure to peer reviewer Penshurst accountants for carrying out the assurance activity of mortdale. Although the information given was to conduct the working procedure of the firm and to check that all the procedure necessary for carrying out audit is being fulfilled but it should not be shared without the permission of the clients.
Therefore mortdale should have taken prior permission from his clients before providing the working papers to his peer reviewer.
Yes, the ethical requirements of APES 110 have been breached by the CPA as well as by the accounting firm. The accounting firm should not wholly rely on the words of the candidate applying to the entity rather should try to collect information about his past engagements. It is also important to know whether his interests are not in conflict with the objectives of the organization.
In this scenario the local accounting firm should have made research about Jan Dungog, a CPA before providing him job in the organization. The firm should have tried of taking information from his previous employer for the reasons about leaving his past job. By collecting this information the firm should have been able to get information about the true reasons for the dissociation of the person with his previous job and get to know about the strength and weakness.
So, the firm should have contacted the previous employer before employing Jan for the position.
In this case wendal sailor contacted the firm in which he was providing audit and assurance services for considering about the other services which he provides apart from providing audit opinion before giving his final audit opinion for the entity. This was against the ethical standards of the professional accountant because this will affect the independent opinion formation about the actual picture of the engaging firm in exchange of other benefits of the accountant.
Judith Durham is at the honorary position of the respective Non Profit organization which is not at anywhere related to the decision making position and can form independent view while providing audit opinion. Honorary position is where a person occupies a position for giving him honor but he does not have any power in making decision.
So from the above discussion it is proved that he can perform audit procedure in the organization as he is not in any way affecting his independence.
On acquisition of the firm, Ernie Dengate should have taken permission of his clients about the transfer of the working papers related to the audit procedure. Although he has taken permission before transfer of taxation working papers, he should also sought permission for the audit documents also. Therefore it can be said that the ethical requirements were breached.
In this scenario Fred provides management services along with taxation and audit procedures and if providing management services affects the independence while providing audit and taxation services then it will be against the professional standards.
Therefore a professional accountant should not provide management services along with taxation and auditing engagement. Hence we can say he has breached the standard.
In this scenario all good chartered accounting firm has provided assistance in maintaining accounting records of the branch company. The branch company has inadequate computer facilities because of which proper records are not prepared. Therefore accounting firm has taken the services of maintaining the records of Branch Company. As the firm is not providing the assurance services to the branch company so the firm can provide the services for maintaining the accounting records for the same. If the firm was providing book keeping services along with auditing engagements then it affects the independence if the accountant.
Professional accountant has breached the standards as per APES 110 under section 150. Where the professional accountant indulges in illegal activities by which he brings disrepute to his profession it will be said that the person has adversely affects the reputation of the profession. In this the public accountant James Jameson is involved in fight and has assaulted a person in the drunken state. Also he has acted in disorderly behavior while attempting drive off. Because of this behavior he was convicted and been sentenced for three months and his licensed has been suspended for 1 year. Therefore it can be said that the accountant has breached the standard of professional behavior by which we can say that he had not act diligently has brought the profession into disrepute. Hence we can conclude that there has been breach of professional standard by the accountant.
2. Upon looking into the case we can say that the auditor can form a non qualified opinion on the issue as he has taken all the necessary steps in order to grab the information about the consumer position reflecting in the accounts where he was unable to take confirmations from them on the same. He has undertaken other audit procedure in order to confirm the consumer position that was in included in the sample. Undergoing the procedure he was satisfied about the true and fair position of the accounts. So we can say that a non qualified opinion can be expressed in this situation.
References
Newberry, S. (2015). Public Sector Accounting: Shifting Concepts Of Accountability. Public Money & Management, 35(5), 371-376.
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