Auditing Assignment

1425 Words Apr 13th, 2015 6 Pages
AYB 301 Audit & Assurance

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Group Ethics Project
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Semester 1, 2015
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Total Word Count: 1250
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This case study will analyse the ethical dilemmas faced by David, audit manager at C & A who is hired to do the financial year-end audit for MAL. The six step ethical framework will be adopted to gain an understanding of principles and obligations for analysing the situation faced by David and arrive to a professional and responsible resolution.

Step 1: Relevant Facts of the Case
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(APESB, 2013) | * David should keep a straightforward and honest relationship with MAL. * David integrity will be compromised if these errors are discovered. | S120 Objectivity S120.1 Professional or business judgement cannot be comprised because of conflict of interest or the undue influence of others. (APESB, 2013) | * Remuneration could compromise David’s professional judgement. * Pressure and threat posed from CFO could lead to unduly influences on David’s judgement. | S140 Confidentiality S140.1 members cannot disclose information outside the firm without proper authority. S140.5 The person from whom advice and assistance is obtained shall respect the Member’s duty of confidentially (APESB, 2013) | * David should not disclose confidential information outside the firm. * If he seeks advice from his friend Peter, he will breach S140.1 & S140.5. * Peter can trade this information to benefit him – affecting MAL. | S150 Professional Behaviour 150.1 Members comply with relevant laws & regulations and avoid any action or omission that they know or should know may discredit the profession. (APESB, 2013) | * David would breach S150 if he fails to prepare a “true and fair” audit report. * If David concedes to believe the CFO but not his own professional judgement, he fails to follow the regulations (S110, S120 and S140). It can adversely affect the good reputation of the profession. | Part B: Members in a Public

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