Madison Thorne works in a public accounting firm and hopes to eventually be a partner. The management of Allnet Company invites Thorne to pepare a bid to audit Allnet's financial statements. In discussing the audit fee, allnet's management suggestsua fee range in which the amount depends on the reported profit of Allnet. The higher its profit, the higher will be the audit fee paid to Thorne's firm. 1. Identify the parties potentially affected by this audit and the fee plan proposed. 2. What are the ethical factors in this situation? Explain. 3. Would you recommend that thorne accept this audit fee arrangement? Why or why not? 4. Describe some ethical considerations guiding your recommendation.

Madison Thorne works in a public accounting firm and hopes to eventually be a partner. The management of Allnet Company invites Thorne to pepare a bid to audit Allnet's financial statements. In discussing the audit fee, allnet's management suggestsua fee range in which the amount depends on the reported profit of Allnet. The higher its profit, the higher will be the audit fee paid to Thorne's firm. 1. Identify the parties potentially affected by this audit and the fee plan proposed. 2. What are the ethical factors in this situation? Explain. 3. Would you recommend that thorne accept this audit fee arrangement? Why or why not? 4. Describe some ethical considerations guiding your recommendation.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter20: Corporations: Organization And Capital Stock

Section: Chapter Questions

Problem 1EC

See similar textbooks

Similar questions

Tana Thorne works in a public accounting firm and hopes to eventually be a partner. The managementof Allnet Company invites Thorne to prepare a bid to audit Allnet’s financial statements. In discussingthe audit fee, Allnet’s management suggests a fee range in which the amount depends on thereported profit of Allnet. The higher its profit, the higher will be the audit fee paid to Thorne’s firm. Would you recommend that Thorne accept this audit fee arrangement? Why or why not?
Tana Thorne works in a public accounting firm and hopes to eventually be a partner. The management of Allnet Company invites Thorne to prepare a bid to audit Allnet’s financial statements. In discussing the audit fee, Allnet’s management suggests a fee range in which the amount depends on the reported profit of Allnet. The higher its profit, the higher will be the audit fee paid to Thorne’s firm. Who are the parties potentially affected by this audit and the fee plan proposed? What are the ethical factors in this situation? Explain. Would you recommend that Thorne accept this audit fee arrangement? Why or why not? What are some ethical considerations guiding your recommendation?
Tana Thorne is an accountant who aspires to become a partner in a public accounting company. Thorne is invited by Allnet Company's management to submit a proposal to audit Allnet's financial accounts. When considering the audit charge, Allnet's management offers a price range based on Allnet's reported earnings. The more the profit, the greater the audit fee payable to Thorne's business. What ethical considerations apply to this situation? Explain.
Tana Thorne works in a public accounting firm and hopes to eventually be a partner. The managementof Allnet Company invites Thorne to prepare a bid to audit Allnet’s financial statements. In discussingthe audit fee, Allnet’s management suggests a fee range in which the amount depends on thereported profit of Allnet. The higher its profit, the higher will be the audit fee paid to Thorne’s firm. What are the ethical factors in this situation? Explain.
Tana Thorne works in a public accounting firm and hopes to eventually be a partner. The management of Allnet Company invites Thorne to prepare a bid to audit Allnet’s financial statements. In discussing the audit fee, Allnet’s management suggests a fee range in which the amount depends on the reported profit of Allnet. The higher its profit, the higher will be the audit fee paid to Thorne’s firm. Describe some ethical considerations guiding your recommendation.
Tana Thorne works for a public accounting company and aspires to be a partner one day. Thorne is invited by Allnet Company's management to create a proposal to audit Allnet's financial accounts. When considering the audit charge, Allnet's management offers a price range in which the amount is determined by Allnet's reported earnings. The more the profit, the greater the audit fee paid to Thorne's business. Describe some of the ethical concerns that influenced your recommendation.
Tana Thorne works at a public accounting business and aspires to be a partner one day. Thorne is invited to create a proposal to audit Allnet's financial accounts by the company's management. When considering the audit charge, Allnet's management offers a price range in which the amount relies on Allnet's reported earnings. The larger the profit, the higher the audit fee paid to Thorne's business. Describe any ethical factors that influenced your recommendation.
Tana Thorne works in a public accoungting firm and hopes to eventually be a partner. The management of Allnet Company invites Thorne to prepare a bid to audit Allnet's financial statements. In discussing the audit fee, Allnet's management suggests a fee range in which the amount depends on the reported profit of Allnet. The higher its profit, the higher will be the audit fee paid to Thorne's firm. 1. Identify the parties potentially affected by this audit and the fee plan proposed. 2. What are the ethical factors in this situation? Explain 3. Would you recommend that Thorne accept this audit fee arrangement? Why or why not? 4. Describe some ethical considerations guiding your recommendation.
Madison Thorne works in a public accounting firm and hopes to eventually be a partner. The management of Allnet Company invites Thorne to pepare a bid to audit Allnet's financial statements. In discussing the audit fee, allnet's management suggestsua fee range in which the amount depends on the reported profit of Allnet. The higher its profit, the higher will be the audit fee paid to Thorne's firm. 4. Describe some ethical considerations guiding your recommendation.
Holly works for a firm of chartered accountants who specialise in external audit, tax advice, and retail systems. Most of your clients are small retail direct sales companies. A large national company, Rectic Plc, who operate in the same industry as several of your clients have approached you to work on their external audit after a disagreement and challenges faced with the previous auditor. They have offered a fee that would constitute 20% of the total revenue of your firm, but only on the condition that the work was completed within 2 weeks of their year end. Required: a) State and explain the 5 ethical principles outlined by the IESBA (International Ethics Standards Board for Accountants) with examples. b) If your firm accepts this engagement state five key points that must be covered by the engagement letter per ISA 210, then briefly explain the significance of the engagement letter. c) Discuss four potential ethical and other issues that your firm may face in the…
You are an Audit Manager for a CPA firm that is assigned to audit the ABC company. Near the middle of the audit, you are offered a job with the company you are auditing. As the Chief Financial Officer. What are the implications of this offer assuming ABC is a nonpublic corporation? What are the implications of this offer if ABC is a public company?
You are a senior manager in the audit department of Raven & Co. You are reviewing three situations which have arisen in respect of audit clients, which were recently discussed at the monthly audit managers' meeting:Grouse Co is a significant audit client which develops software packages. Its managing director, Max Partridge, has contacted one of your firm's partners regarding a potential business opportunity. The proposal is that Grouse Co and Raven & Co could jointly develop accounting and tax calculation software, and that revenue from sales of the software would be equally split between the two firms. Max thinks that Raven & Co's audit clients would be a good customer base for the product. Plover Co is a private hospital which provides elective medical services, such as laser eye surgery to improve eyesight. The audit of its financial statements for the year ended 31 March 2012 is currently taking place. The audit senior overheard one of the surgeons who performs laser…