Your firm is the auditor of Happy Days, an entity that provides hospitality packages at racecourses around a single country. The managing director of Happy Days has suggested the following to your managing partner: i. All members of the audit team to be offered two free tickets to a major event at the racecourse of their choice, ii. last year’s audit senior should be seconded to the organization for a six-month period. The current year’s audit is not yet underway, iii. the firm also provides internal audit services. Discuss which, if any of the above proposals would be acceptable to your firm and (if not state why not), and set out the main safeguards, if any, which would be required.

Your firm is the auditor of Happy Days, an entity that provides hospitality packages at racecourses around a single country. The managing director of Happy Days has suggested the following to your managing partner: i. All members of the audit team to be offered two free tickets to a major event at the racecourse of their choice, ii. last year’s audit senior should be seconded to the organization for a six-month period. The current year’s audit is not yet underway, iii. the firm also provides internal audit services. Discuss which, if any of the above proposals would be acceptable to your firm and (if not state why not), and set out the main safeguards, if any, which would be required.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 22E: Ginnian and Fitch, a regional accounting firm, performs yearly audits on a number of different...

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Your firm is the auditor of Happy Days, an entity which provides hospitality packages atracecourses around a single country. The managing director of Happy Days has suggested thefollowing to your managing partner:i. All members of the audit team to be offered two free tickets to a major event at theracecourse of their choice,ii. last year’s audit senior should be seconded to the organization for a six-month period.The current year’s audit is not yet underway,iii. iii. the firm also provide internal audit services. RequiredDiscuss which, if any of the above proposals would be acceptable to your firm and (if not statewhy not), and set out the main safeguards, if any, which would be required.
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You are the audit senior responsible for the audit of Sampson Limited. You are currently planning the audit for the year ended 31 December 20X7. During your initial planning meeting held with the financial controller, he told you of the following changes in the company’s operations.(i) Due to the financial controller’s workload, the company has employed a treasurer. The financial controller is excited about the appointment because in the two months that the treasurer has been with the company he has realised a small profit for the company through foreign-exchange transactions in yen.(ii) Sampson has planned to close an inefficient factory in country New South Wales before the end of 20X7. It is expected that the redeployment and disposal of the factory’s assets will not be completed until the end of the following year. However, the financial controller is confident that he will be able to determine reasonably accurate closure provisions.(iii) To help achieve the budgeted sales for the…
For each of the following situations involving relations between auditors and the companies they audit, indicate whether it violates IFAC’s Code of Ethics for Professional Accountants and the rationale for the applicable guideline. a) Paul Asante, CPA, discloses confidential information in a peer review of the firm’s quality control procedures. b) Frank Smith, CPA, is auditing a company in Ghana, which has offered to send him and his wife on a holiday in Hawaii for two weeks. c) Tabula Gonzales, CPA, says in an interview in the local paper that Emilio Rios, CPA, misleads his clients about the quality of his audit work. Additional information: Please add references or citations.
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