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 fe
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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?
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- Ginnian and Fitch, a regional accounting firm, performs yearly audits on a number of different for-profit and not-for-profit entities. Two years ago, Luisa Mellina, Ginnians partner in charge of operations, became concerned about the amount of audit time required by not-for-profit entities. As a result, she instituted a series of training programs focusing on the auditing of not-forprofit entities. Now, she would like to see if the training seemed to work. So, she ran a multiple regression on 22 months of data for Ginnian for three variables: the total monthly cost of audit professional time, the number of not-for-profit audits, and the hours of training in the audit of not-for-profit entities. The following printout was obtained: Required: 1. Write out the cost equation for Ginnians audit professional time. 2. If Ginnian expects to have 9 audits of not-for-profits next month and expects that audit professionals will have a total of 130 hours of not-for-profit training, what is the anticipated cost of professional time? 3. Are the hours spent auditing not-for-profit entities positively or negatively correlated with audit professional costs? Is percentage of experienced team members positively or negatively correlated with audit professional cost? 4. What does R2 mean in this equation? Overall, what is your evaluation of the cost equation that was developed for the cost of audit professionals?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 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. Identify the parties potentially affected by this audit and the fee plan proposed.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 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. Q. What are some ethical considerations guiding 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. 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.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…
