Group Paper Coca Colla Industry Analysis

The auditor¡¦s responsibility is to the client and not the third parties the client plans to distribute the financial statements to. The auditor does however consider the third parties when completing the audit. There is no direct responsibility to the third parties.

The factor that plays the greatest role in determining auditor independence is independence in mind. Auditors may or may not appear to be independent, but if the auditor is truly independent in mind, then the auditor can remain objective and unbiased. The profession should consider tightening the Code of Professional Conduct to address the issue of an audit team member knowing a close friend that holds any position at the audit client. If this scenario arises, the firm can still audit the client, but the audit member with the close relationship won’t be able to be on the audit team.

There are two defences to an action in negligence: contributory negligence and voluntary assumption of risk. (FoBL, 2005, p83) This case only involves contributory negligence.

Robert Chuckrow Construction Company (Chuckrow) was employed as the general contractor to build a Kinney Shoe Store. Chuckrow employed Ralph Gough to perform the carpentry work on the store. The contract with Gough stipulated that he was to provide all labor, materials, tools, equipment, scaffolding, and other items necessary to complete the carpentry work. Gough’s employees erected 38 trusses at the job site. The next day, 32 of the trusses fell off the building. The reason for the trusses having fallen was unexplained, and evidence showed that it was not due to Chuckrow’s fault or a deficiency in the building plans. Chuckrow told Gough that he would pay him to reerect the trusses and continue work. When the job was complete, Chuckrow paid Gough the original contract price but refused to pay him for the additional cost of reerecting the trusses. Gough sued Chuckrow for this expense. Can Gough recover?

The defendant, in my opinion, does not have a case, at all. Although, one ruling cited the timing of the filing as an issue and the company argued

One principle that is relevant to this case is the Sarbanes-Oxley Act that was discussed

Issue: Should the Court rule as time-barred the Plaintiff’s claims which he makes under the Massachusetts ‘Blue Sky’ securities fraud statute and as lacking as a matter of law the Plaintiff’s claim on the Defendants’ unfair trade practices?

Yes. This is due to the fact that reasonable precautions were taken by having the products liability team examine each document, and furthermore, having a paralegal sit in with Mr. Beene while he was sifting through the documents. The second and third factors are not being disputed solely for the reason that the inadvertent disclosures occurred once, and the extent of them was very

6. When a CPA firm has two audit clients that transact business with each other should the two audit teams be allowed to share information regarding their clients?

Title II of Sarbanes-Oxley covers Auditor independence, it contains nine sections all covering different aspects of auditors’ independence. Section 201, Services outside the Scope of Practice of Auditors, details what activities are not allowed to be performed by auditors for a client if they are to be performing an audit for that client. Detailed in section 201 as prohibited in order to maintain auditor independence are legal and expert services unrelated to the audit, any investment advisement, investment banking services, management or human resource functions, internal audit outsourcing services, actuarial services, appraisal or valuation services, financial

From the aspect of the regulatory framework, it is not wrong to assign Jack to perform the audit in Top Enterprise. “Under the Companies Act, a person is prohibited from accepting an appointment as auditor of the company if he is an employee of an officer of the company” (Messier/Glover/ Prawitt Margaret Boh). But officer generally means that auditor who can sign the audit report, not audit staff. Thus, Jack does not fall under any disqualification of auditors that stated by Companies Act.

B) According to SOX external auditors are prohibited from providing certain services to clients: book keeping or other things related to the accounting records or financial statements of the audit client, they are not allowed to design and implement financial information, appraisal or evaluation services, internal audit outsourcing services, investment banking services, legal services and expert services unrelated to the audit.

Auditors are precluded from discussing confidential information obtained in the course of an engagement unless the client consents to the disclosure. Abernethy and Chapman must therefore have Rodgers permission to have this communication. If Rogers prohibits Abernethy and Chapman from meeting with the predecessor auditor, even after it was fully explained the importance and necessity of the procedure, then the CPA firm should reject the new engagement.  (PCAOB)

An audit partner cannot receive compensation based on selling engagements to the client for services other than audit, review, and attest services.

Perhaps the greatest insight provided by my colleague's discussion is the deconstruction of the process by which the concept of negligence did ultimately emerge as a new tort standard. Here, the discussion illustrates the challenge before a judicial body when a legal conflict appears to bring about a new and previously unforeseen point of contention. In this case, as my colleague highlights so effectively, the charge of fraud would be the only theretofore existent way of legally addressing liability for a business or organization such as the defendant in this case. The great insight provided by my colleague is in acknowledgement of the exhaustive review of existing legal documents engaged by the ruling parties and arguing parties. This process demonstrates well that even where no precedent existing for what would become the charge of negligence,