You are one of the three partners in a firm of accountants. Five years ago, the...

 

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You are one of the three partners in a firm of accountants. Five years ago, the firm was appointed as external accountants to a young, successful, and fast-growing company, engaged to prepare year end accounts and tax returns. The business had started trading with a handful of employees but now has a workforce of 200, while remaining below the size of company requiring a statutory audit. You have close relationship with the directors and several company staff of the company. You came to know that staff purchases goods manufactured by the company are authorized by production managers, and then processed outside the accounting system. The proceeds from these sales are used to fund the firm employees' friends party. You are also invited to attend the party. (10 Marks) Required: A. Identify the professional code of ethics related to this case and explain how is it related? B. Specify the threat associated with the above case. Justify. C. How do you manage this situation? You are one of the three partners in a firm of accountants. Five years ago, the firm was appointed as external accountants to a young, successful, and fast-growing company, engaged to prepare year end accounts and tax returns. The business had started trading with a handful of employees but now has a workforce of 200, while remaining below the size of company requiring a statutory audit. You have close relationship with the directors and several company staff of the company. You came to know that staff purchases goods manufactured by the company are authorized by production managers, and then processed outside the accounting system. The proceeds from these sales are used to fund the firm employees' friends party. You are also invited to attend the party. (10 Marks) Required: A. Identify the professional code of ethics related to this case and explain how is it related? B. Specify the threat associated with the above case. Justify. C. How do you manage this situation?

Answer rating: 100% (QA)

A The professional code related to this case is objectivity a professional accountant must exercise objectivity in the performance of their profession... View the full answer