Great Deal! Get Instant $10 FREE in Account on First Order + 10% Cashback on Every Order Order Now

ACC305 INDIVIDUAL ASSIGNMENT QUESTION 1 (24 MARKS) The following situations may or may not breach the ethical requirements of APES 110. You need to state whether they are...

1 answer below »



ACC305 INDIVIDUAL ASSIGNMENT



QUESTION 1 (24 MARKS)

The following situations may or may not breach the ethical requirements of APES 110.
You need to state whether they are or are not a breach of the ethical requirements of APES110
and if they are a breach of the ethical requirements state which ethical principle has been breached :
(a)The Mortdale Accounting firm had carried out several audits of public companies in the last year. It now provided the working papers to the Penshurst Accountants who were carrying out a peer
review of the audits by Mortdale Accounting. The Mortdale Accounting firm does not advise its clients of these reviews.
(b) Jan Dungog, a CPA, applies to a local public accounting firm of Chartered Accountants, for a position ,but asks the local public accounting firm not to contact her current employer. The local public accounting firm do not contact her contact her current employer but hire her without contacting them or her other referees.
(c)Wendal Sailor, a chartered accountant, acquires an insurance and superannuation business as well as conducting audits. During audits Wendal Sailor frequently contacts the firms during the audit advising them of their other services prior to providing their final Audit Opinion.
(d) Judith Durham is the partner on an audit of a not for profit charitable organisation. She is also a member of the Board of Directors but this position is honorary and does not involve her performing
any management function.
(e) Ernie Dengate sells his accounting practice which includes bookkeeping, tax and auditing. He obtains permission for the release of tax working papers but does not request permission for the others. He releases all the working papers from these functions to the new accountant, Jago, who has
bought the practice.
(f) Fred Nerk, a public accountant in a small country town, provides tax services, management advisory services and does audits for the same clients. Sometimes the same person provides all these
services.
(g)The Allgood Chartered Accounting firm maintains its records on various computers in its office. It does audits on the Branch Company and the Branch Company has found its computer facilities are inadequate for its needs and so the Allgood Chartered Accounting firm has maintained certain of the
accounting records of Branch Company on its computers.
(h)James Jameson, a public accountant, stays too long at the annual Christmas party of his firm, the Balgowlah Accountants and consumes too much alcohol and drugs. He subsequently goes into town and is involved in a fight and is charged with assault on a person at a hotel as well as drunken and disorderly behaviour when he attempts to drive off. He is subsequently convicted and sentenced to 3 month in gaol as well as having his license suspended for 1 year.
QUESTION 2 (16 MARKS)

Indicate the type of opinion that should be expressed in each of the following situations, providing reasons for your choice .
(a) The auditor was unable to obtain confirmations from eight of the client’s major customers that
were included in the sample however the auditor was able to satisfy himself about the balances of these accounts using other audit procedures.
(b)The client restricted the auditor from carrying out procedures to verify the property ,plant and equipment .The property, plant and equipment comprises 35% of total assets..
(c) Management have excluded from the financial report the necessary disclosures in relation to
a contingent liability .If this becomes an actual liability it will have a material effect on the financial
report when it becomes an actual liability.
(d) A significant proportion of a retailer’s sales are made on a cash basis but the internal controls are inadequate and the value of these cannot be verified . There are no audit tests that can be done to assure yourself that cash sales are being recorded or are correct
(e)You have been asked to do the audit for a new client this financial year .While you are satisfied that there appears to be no material misstatements for the information during the current financial year the client will not provide any information about the opening balances of accounts at the start of the financial year.
(f) You have just started auditing the financial statements of a client which has not been following the Australian Accounting Standards since it began operating four years ago.
(g) A client has been using the LIFO method of accounting for inventory which is disallowed under
the Australian Accounting Standards. This has had a material effect on the financial statements
however its effect is currently limited to the effect on the Inventory value
(h) The auditor of Numark has just completed the audit and is satisfied that there are no material misstatements however the client’s continuation as a going concern is in extreme doubt as its major
customer has gone into liquidation and it appears very unlikely that other customers will take its place due to the highly specialised nature of its products.

Requirement:

Font size is 12, word limit is from XXXXXXXXXX.

Harvard reference system

Due time is at 23.55PM on Friday in week 5, no extension will be given. One day late, 5% deduction on your assignment until zero.

Similarity rate must be lower than 20%, otherwise you will receive penalty, over than 40%, you will receive zero mark.

You must register your own account with turn-it-in, after you log in, you use the following information to submit your assignment.

To submit your assignment, please use the class ID and password to enrol the subject on Turnitin.

http://turnitin.com/

The Class ID and Password will be posted on Moodle interface by Week 2.

Answered Same Day Mar 30, 2020 ACC305

Solution

Abr Writing answered on Apr 02 2020
126 Votes
Auditing and Assurance
Answer 1
a.Peer review is conducted by an independent evaluator to determine the quality of the work done by the audit firms is not compromised. Peer review is a mechanism where the audit of one firm is done by another firm. Every audit firms maintained the working papers which are collected by them during the audit. These working papers are analyzed by the peer reviewer to determine their quality of services. The confidential information of the client is handed over to the other audit firms for peer review that does not mean it
eaks the ethical requirements of APES 110.
. Integrity and objectivity is the fundamental principle of audit which states that the auditor has to conduct his audit work in a honest way. His approach during the audit remains straight forward. Jan Dungog applies for job in a public accounting firm and tell them to not to ask their past employers. There is not complete information is given by Jon Dungog about his resignation from the old firm. It is clear that the principle of integrity has
eached in this case (AASB, 2002).
c.The section of companies act states that the auditor cannot give other services to the client that is described in the actWendal sailor is a chartered accountant and conducting audits. He also advises them about his other business. It is clear that he is not eligible to give other services to client as it is prohibited in the act. He
eaches the ethical principle of audit.
d.If a person is an auditor of a firm then he cannot become the member of the board of directors of the firm. It is clearly stated in the act that certain persons are disqualified to be appointed as an auditor of the company and one of them is board of directors. Judith Durham cannot become the partner in the audit firm unless she resigns from his position of board of directors.
e.Audit working papers are collected by an auditor during the course of audit. It is also known as audit documentation. The working paper contained the confidential information of the business of the client. He cannot disclose them without the approval of the client or there is a requirement of law. Ernie Dengate sells all the tax working papers to Jago who purchases the practice of Ernie Dengate. She took permission but she does not take permission from the others for the release of the audit working papers. She fails to maintain the rule of confidentiality...
SOLUTION.PDF

Answer To This Question Is Available To Download

Related Questions & Answers

More Questions »

Submit New Assignment

Copy and Paste Your Assignment Here