For each situation below identify the threat and one fundamental principle that is comprised. a) An auditor has shares in a company which is an audit client of theirs. b) An accountant has compiled the financial statements for a client and was requested to also audit the statements. c) The financial director of Baboo Ltd is very aggressive and dismissive of the audit function and audit team d) A chartered accountant values a client’s shares and then leads the negotiations on the sale of the client’s company e) The chartered accountant fails to report a fraud at a client because the perpetrator is a close friend and he is sympathetic to the interest of his friend.
For each situation below identify the threat and one fundamental principle that is comprised. a) An auditor has shares in a company which is an audit client of theirs. b) An accountant has compiled the financial statements for a client and was requested to also audit the statements. c) The financial director of Baboo Ltd is very aggressive and dismissive of the audit function and audit team d) A chartered accountant values a client’s shares and then leads the negotiations on the sale of the client’s company e) The chartered accountant fails to report a fraud at a client because the perpetrator is a close friend and he is sympathetic to the interest of his friend.
Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter10: Auditing Cash And Marketable Securities
Section: Chapter Questions
Problem 67RSCQ
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For each situation below identify the threat and one fundamental principle that is comprised.
a) An auditor has shares in a company which is an audit client of theirs.
b) An accountant has compiled the financial statements for a client and was requested to also audit the statements.
c) The financial director of Baboo Ltd is very aggressive and dismissive of the audit function and audit team
d) A chartered accountant values a client’s shares and then leads the negotiations on the sale of the client’s company
e) The chartered accountant fails to report a fraud at a client because the perpetrator is a close friend and he is
sympathetic to the interest of his friend.
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