Jenny Watson is the partner on the audit of a non-profit charitable organization, the Tasmanian Epidemiological Society (TES) Incorporated. She is also a member of the board of directors of TES Inc, but this position is honorary and doesn’t involve performing a management function.

2. Several of the audit partner’s staff recently completed a review of the internal controls at Erriba Pty Ltd, a large proprietary company which is also an audit client. The work was charged at 120% of the usual consulting fees to partially recoup the lower audit fees brought about by a competitive tender. Audit staff implemented all the recommended changes in procedures by updating the company’s accounting manual and running a two- hour training session for the accounting staff. As the audit staff have already performed significant work on Expo’s internal controls, the audit manager has decided to assess control risk as low and not perform any tests of control.

3. Peter Russell is working as a paid intern in your audit firm. He is also the son of the factory foreman of one of your firm’s major audit clients, Walnut Processing Limited. During the internship period, Peter is assigned to the audit of Walnut Processing Limited. Peter’s work comprised testing the internal controls of the cash payments system.

4. Pound sells his public accounting practice, which includes bookkeeping, tax services and auditing, to Lyons. Pound obtains permission from all clients for release of audit-related working papers before making them available to Lyons. He doesn’t get permission before releasing tax and management services related working papers.

5. Willett and Associates have not previously carried out audits of credit unions. Most of Willett and Associates’ audit clients are clubs and small local businesses. The audit partner has decided to take on a credit union as a new client and hopes that there is a professional development program available to update the audit team members on the specialised issues for the credit union industry.

Required

Using below, for each of the abovementioned independent situations:

1. Identify any professional standards and/or regulatory requirements which have been breached;
2. Fully explain the impact of the breach;
3. Identify and explain any safeguards that can be implemented to ameliorate the breach.

Event	Part a .answer	Part b. answer	Part c. answer
i
ii
iii
iv
v

Answer rating: 100% (QA)

a There has been a breach of professional standards in all of the above independent situations In si... View the full answer