Principles Of Auditing & Other Assurance Services
21st Edition
ISBN: 9781259916984
Author: WHITTINGTON, Ray, Pany, Kurt
Publisher: Mcgraw-hill Education,
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Question
Chapter 2, Problem 39RDC
a.
To determine
Provide the implications of this illegal act by Company U’s management.
b.
To determine
Explain the course of actions available to the CPA firm for the current case.
c.
To determine
Provide an opinion on the course of appropriate actions by the auditor.
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Hatfield Industries is a large manufacturing conglomerate based in the United States with annual sales in excess of $300 million. Hatfield is currently under investigation by the Securities and Exchange Commission (SEC) for accounting irregularities and possible legal violations in the presentation of the company’s financial statements. A due diligence team from the SEC has been sent to Hatfield’s corporate headquarters in Philadelphia for a complete audit in order to further assess the situation.Several unique circumstances at Hatfield are discovered by the SEC due diligence team during the course of the investigation:∙ Management has been involved in ongoing negotiations with the local labor union, of which approximately 40% of its full-time labor force are members. Labor officials are seeking increased wages and pension benefits, which Hatfield’s management states is not possible at this time due to decreased profitability and a tight cash flow situation. Labor officials have…
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DreamCash & Co., an audit and assurance firm, has been engaged as auditors for the DellMax Bank Ltd, a public limited liability company for some time now. DellMax Bank has sixty branches throughout the country and branches in Mali, Burkina Faso and Nigeria. The Bank is one of the banks in the country which can boast of large landed properties. DreamCash & Co. receives about 20% of its income from this particular client. Before last year’s audit, the bank engaged the audit firm to value its land and buildings in all its branches and headquarters. This work was executed by the audit firm and a report has been issued to management. The report has been incorporated in this year’s financial statements to be audited soon. DreamCash & Co. sees DellMax Bank Ltd. as a very important client whose works are always executed with dispatch.
Required:
1. Identify and evaluate the significance of any threats to the Code of Ethics for Professional Accountants raised in the case.
2.…
Chapter 2 Solutions
Principles Of Auditing & Other Assurance Services
Ch. 2 - Prob. 1RQCh. 2 - Prob. 2RQCh. 2 - Prob. 3RQCh. 2 - Prob. 4RQCh. 2 - Prob. 5RQCh. 2 - Prob. 6RQCh. 2 - Prob. 7RQCh. 2 - Prob. 8RQCh. 2 - Prob. 9RQCh. 2 - Prob. 10RQ
Ch. 2 - Prob. 11RQCh. 2 - Prob. 12RQCh. 2 - Prob. 13RQCh. 2 - Prob. 14RQCh. 2 - Prob. 15RQCh. 2 - Prob. 16RQCh. 2 - Prob. 17RQCh. 2 - Prob. 18RQCh. 2 - Prob. 19RQCh. 2 - Prob. 20RQCh. 2 - Prob. 21RQCh. 2 - Prob. 22RQCh. 2 - Prob. 23RQCh. 2 - Prob. 24RQCh. 2 - Prob. 25QRACh. 2 - Prob. 26QRACh. 2 - Jane Lee, a director of a nonpublic corporation...Ch. 2 - Prob. 28QRACh. 2 - Prob. 29QRACh. 2 - Prob. 30AOQCh. 2 - Prob. 30BOQCh. 2 - Prob. 30COQCh. 2 - Prob. 30DOQCh. 2 - Prob. 30EOQCh. 2 - Prob. 30FOQCh. 2 - Prob. 30GOQCh. 2 - Prob. 30HOQCh. 2 - Prob. 30IOQCh. 2 - Prob. 30JOQCh. 2 - Prob. 30KOQCh. 2 - Prob. 30LOQCh. 2 - Prob. 31OQCh. 2 - Prob. 32OQCh. 2 - Prob. 33OQCh. 2 - Prob. 34OQCh. 2 - Prob. 35OQCh. 2 - Joe Rezzo, a college student majoring in...Ch. 2 - Prob. 37PCh. 2 - Hide-It (HI), a family-owned business based in...Ch. 2 - Prob. 39RDC
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