BKAA2013 AUDITING AND ASSURANCE

The Chief Executive Officer (CEO) and the Finance Director of Sejengkal Synergy Bhd. disagreed with their existing auditor on the proposed accounting treatment of a specified category of newly acquired and substantially material new assets. The proposal for the treatment will affect current year's profits and also affected will be the management bonus awarded at the end of the year. The Finance Director approaches you and confidentially asks for your favourable professional audit opinion on the matter. Sejengkal Synergy Bhd. is willing to nominate and appoint you as their new auditor at the Annual General Meeting of the company if you oblige to their requests. REQUIRED: (b) Based on the above short case, state the ethical principle involved, affecting ethics. (1 Mark) Assume that you are the potential auditor, discuss briefly the main issues, AND how will you address them? (4 Marks)