Sweet & Lowe are auditors of McColl Holdings plc, a chemical manufacturer. The financial director has left

Question:

Sweet & Lowe are auditors of McColl Holdings plc, a chemical manufacturer. The financial director has left the company recently to take up another post and McColl have so far been unable to find a suitable replacement. They have therefore asked Sweet & Lowe to be responsible for the preparation of the financial statements for the year ending 31 December 20X2 as part of the audit.
McColl have also asked Sweet & Lowe to:
• Help in designing and selecting a new computerized management accounting system
Assist in finding a new financial director and
Discuss at a board meeting the dividend to be paid.
The company is also subject to a probable takeover bid and wants Sweet & Lowe to act for them in rebutting statements made by the takeover bidder. During the audit, the audit team find that the company is systematically breaching safety guidelines on chemicals shipped to a developing country and they suspect some bank transactions with an offshore-based bank.


Discussion

– What are the ethical implications for Sweet & Lowe?
– How far can they ethically go in assisting their client?

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Auditing

ISBN: 9781473778993

12th Edition

Authors: Alan Millichamp, John Taylor

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