he following situation involves Kevin Smith, staff accountant with the local CPA firm of Hobb, Mary and
Question:
he following situation involves Kevin Smith, staff accountant with the local CPA firm of Hobb, Mary and Khang (HM&K). The bookkeeper of Mirage Manufacturing Company resigned three months ago and has not yet been replaced. As a result, Mirage’s transactions have not been recorded and the books are not up to date. Mirage must prepare interim financial statements to comply with terms of a loan agreement, but cannot do so until the books are posted. To help them with this matter, Mirage turns to HM&K, their independent auditors. Mirage wants Kevin Smith to update their books because Kevin had audited them last year.
Required:
A. Identify the ethical issues that are involved.
B. Discuss whether there has or has not been any violation of ethical conduct.
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
Principles of Auditing An Introduction to International Standards on Auditing
ISBN: 978-0273768173
3rd edition
Authors: Rick Hayes, Philip Wallage, Hans Gortemaker