Question: Refer to the Auditing in Practice feature The PCAOB Position

Refer to the Auditing in Practice feature, "The PCAOB Position on Management Bias in Correcting Detected Misstatements." The PCAOB guidance alerts auditors to situations in which management may resist auditor attempts to convince them to correct misstatements, including biases in which: (1) management selectively corrects misstatements to achieve a financial reporting objective (such as correcting only those that result in increases to net income) and in which (2) management searches for offsetting misstatements after the auditor has identified existing misstatements.
How do such actions and biases on the part of management reflect on their integrity and ethics? What would management likely use as an explanation for such actions, particularly in the second case? How would management's actions affect the auditor's professional skepticism?

Sale on SolutionInn
  • CreatedSeptember 22, 2014
  • Files Included
Post your question