When a dispute arises between an audit client and its auditor regarding the proper accounting treatment for a transaction or other item, the audit client will sometimes retain another accounting firm to issue a report, previously known as a SAS No. 50 report; on the proper accounting treatment for the given item [see AU Section 625 and AU-C Section 915]. Identify the potential ethical dilemmas that may result from allowing accounting firms to issue such reports to non-audit clients.
Answer to relevant QuestionsShould auditors insist that their clients accept all proposed audit adjustments, even those that have an “immaterial” effect on the given financial statements? Defend your answer.Bermuda’s Minister of Finance retained KPMG to “audit” the business affairs of IPOC to determine whether the company was a criminal enterprise or a legitimate business operation. What type of professional service was ...What is the purpose of “attorneys’ letters” obtained during the course of an audit? If attorneys are aware that these letters can be routinely subpoenaed, how does this fact likely affect the quality of the audit ...Did Richard have a responsibility to make the two client executives aware of his presence when he was outside of Russell’s office? Why or why not?What measures can accounting firms take to ensure that time budgets do not interfere with the successful completion of an audit or become dysfunctional in other ways?
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