(a) Joe & Donald (J&D) Pty Ltd is a fast-growing manufacturing company. J&D is by far...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
(a) Joe & Donald (J&D) Pty Ltd is a fast-growing manufacturing company. J&D is by far your largest audit client. While conducting the audit you discovered that several engagements were potentially in breach of the independence requirements of APES110. The unrelated cases are listed in the table below. For each case (4 marks each case-8 marks total): (1) Does a potential threat to audit independence exist in the circumstances (Yes/No)? (ii) If your answer to part (i) is yes, identify the single most significant type of potential threat and recommend a safeguard, if any, that could reduce or remove the threat. Alternatively, if your answer to part (i) is no, give reasons why no threat exists. Situations Does potential a If your answer to recommend a safeguard, part (i) is yes, if any, that could reduce the or remove the threat. threat to audit identify independence single most (2 marks) exist in the significant type circumstances of potential (i) Your audit firm is divided into different autonomous divisions with each having separate partners and staff. The Tax Consulting Division has recently submitted the tax return for J&D. The return was prepared by your tax consulting division using the information provided by J&D. The client i reviewed the return and signed it before submission. (i) A small Pty Limited company audit client has processed all the accounting transactions and has adjustments for thei year and produced a final trial balance. To comply with the terms of a mortgage loan the company needs to urgently present audited financial statements to the bank, but the statements can't be prepared because the accountant has fallen ill and is in hospital. The client asks if your firm can prepare statements for them the using their trial balance figures. (Yes/No)? (1/2 mark) threat. (1 mark) (a) Joe & Donald (J&D) Pty Ltd is a fast-growing manufacturing company. J&D is by far your largest audit client. While conducting the audit you discovered that several engagements were potentially in breach of the independence requirements of APES110. The unrelated cases are listed in the table below. For each case (4 marks each case-8 marks total): (1) Does a potential threat to audit independence exist in the circumstances (Yes/No)? (ii) If your answer to part (i) is yes, identify the single most significant type of potential threat and recommend a safeguard, if any, that could reduce or remove the threat. Alternatively, if your answer to part (i) is no, give reasons why no threat exists. Situations Does potential a If your answer to recommend a safeguard, part (i) is yes, if any, that could reduce the or remove the threat. threat to audit identify independence single most (2 marks) exist in the significant type circumstances of potential (i) Your audit firm is divided into different autonomous divisions with each having separate partners and staff. The Tax Consulting Division has recently submitted the tax return for J&D. The return was prepared by your tax consulting division using the information provided by J&D. The client i reviewed the return and signed it before submission. (i) A small Pty Limited company audit client has processed all the accounting transactions and has adjustments for thei year and produced a final trial balance. To comply with the terms of a mortgage loan the company needs to urgently present audited financial statements to the bank, but the statements can't be prepared because the accountant has fallen ill and is in hospital. The client asks if your firm can prepare statements for them the using their trial balance figures. (Yes/No)? (1/2 mark) threat. (1 mark)
Expert Answer:
Answer rating: 100% (QA)
a i Yes a potential threat to audit independence exists in the circumstances ii The single most sign... View the full answer
Related Book For
Auditing A Business Risk Approach
ISBN: 978-0538476232
8th edition
Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg
Posted Date:
Students also viewed these accounting questions
-
A review of clients of the auditing firm of Juny & Pranil (J&P) revealed that there was a potential breach of the independence requirements of APES110 in the case below. Your client is a fast...
-
Q1. You have identified a market opportunity for home media players that would cater for older members of the population. Many older people have difficulty in understanding the operating principles...
-
Addie's grandfather has left them a trust and the value of the money they receive depends on the age choose to collect this gift of money. Their options are given in the table below. Payoff at age 19...
-
Byte Computer Company, a manufacturing organization, has just completed an order that Grater, Ltd., placed for 80 computers. Direct materials, purchased parts, and direct labor costs for the Grater...
-
Show that if A is an m x n matrix such that AAT is non-singular, then rank A = m.
-
What is the basic principle used in Rayleigh's method?
-
Edward Owen is responsible for the maintenance, rental, and day-to-day operation of several large apartment complexes on the upper-east side of New York City. Owen is especially concerned about the...
-
What are the aims and tools of promotion, and explain why promotion is important for companies. Please explain with definition the promotional tools and briefly describe what are the elements that...
-
The propagation of a wave is described with the expression y = A cos(kx + wt + p), where the variables A, k, w, and take the traditional positive values. What is the direction of propagation for this...
-
A tenant is looking at a 3,500 square foot space. They desire a three-year lease. The Tenant Improvements (TI) are $10/sf, the lease commission is 6% of the entire potential rent stream, there is...
-
Yesterday, you bumped into a colleague who was clearly distressed. Over coffee, she revealed that her manager had been bullying and harassing her for nearly a year. You asked her if she had reported...
-
the development of your public policy change or new policy and leadership and management skills used in its development. Refines problem statement drafted. Make sure you address your stakeholder's...
-
Write the formula for the derivative of the function. f(x) = 12x4 + 16x + 9 f'(x) =
-
Halliburton Oil Field Services is a specialist consulting firm that assists oil corporations discover new oil wells, provides technical advice and support on how to extract oil and provides...
-
Write a program that prompts the user to enter the side of a hexagon and displays the area, perimeter, and radius of a hexagon using the following formulas: 3V3 Area = Perimeter = 6 *S Radius of a...
-
1. Which of the four major types of information systems do you think is the most valuable to an organization? 2. How do you critically associate the ideas of business agility and business efficiency...
-
Review the Auditing in Practice feature focusing on the inappropriate actions of Robert A. Putnam, the engagement partner on the HBOC audit. In this case, we expand on the problems detected in the...
-
Describe the liability issues and uncertainties for large U.S. CPA firms that are affiliates of international organizations?
-
The term professional judgment is used throughout the chapter. In what ways might an auditor be called upon to exercise professional judgment in the course of performing an audit? To what extent does...
-
What does it mean to say that the demand for resources is a derived demand? Is the demand for all goods and services a derived demand?
-
Using the data in exercise 2, determine how many units of resources the firm will want to acquire. Data from in exercise 2 Using the information in the following table, calculate the marginal revenue...
-
Using the information in the following table, calculate the marginal revenue product (MRP = MPP MR). Unit of Resources Total Resource Output Price Price 1 10 $5 $10 2 25 $5 $10 345 35 $5 $10 40 $5...
Study smarter with the SolutionInn App