You are required to answer ALL the questions related to the cQUESTION 1 Joel Ong has great expectations on his future as last year he graduated with ACCA professional qualification with excellent results and was awarded world top book prize winner for Advanced Audit and Assurance subject. Recently, he was offered a job as an audit associate in Weng & Co, a medium size public accounting firm.

On the first day of reporting to work, Joel was given 2 hours of orientation and 4 hours of training, thereafter he was left alone to go through some audit files. Next day he was asked by his senior to do some filing works. On the third day of work, he was assigned to field audit of a new client. The new client, Hilux Bhd (Hilux) a listed entity in Bursa Securities, manufactures semiconductors for both local and overseas markets. The financial year end for Hilux is 30 April 2021.The pressure on this audit was enormous as client required the audited financial statements to be ready by end of June 2021 to support the application for bank loan. Despite everyone in the audit team working 80 hours per week including overtime for whole month of May 2021, the audit is unlikely to be completed in time to meet the clients deadline.

Joel was assigned to handle the audit on Plant, Property and Equipment audit. He mainly focussed on vouching the additions for the year. The audit program stated that a sample of all items over RM 30,000 should be chosen, plus a haphazard method of sampling for smaller value items. When Joel went to pick the sample, CM Tan, the audit senior, had left the clients office. CM Tan has off his mobile phone; there was no way to be reached to clarify Joels concern about the appropriate size of the sample to be chosen for smaller value items.

Based on his own judgement, Joel has chosen 80 smaller value items. His basis for doing this was that there were about 500 items, so 80 was a reasonably good proportion of the population.

Joel on his own liberty took some of the clients files home and asked his sister, who is currently pursuing final stage of ICAEW qualification to assist him in certain part of the audit.

Joel audited the additions with the help of his sister, the following are the results:

The items over RM 30,000 contained no misstatements; however about 70 of the 80 small value items contained large number of misstatements. Subsequently, when Joel calculated the projected misstatements on the findings, the value seemed to be very significant.

A couple of days later, CM Tan visited the clients office to discuss some audit issues with the management, Joel took the opportunity to submit the audit file for CM Tan to review.

The following was CM Tan response:

Oh my God, Joel why did you do this? You were only supposed to look at the items over RM 30,000 with additional 6 to 9 samples of the smaller value items. You have wasted a whole day of work, auditing on so many samples which are deemed unnecessary. We could not afford to spend more time in this area as the audit time cost has exceeded our budget for this audit. I want you to discard or throw away the all the working papers where you have tested the last 80 small value items. Forget you ever did them otherwise you and I will be reprimanded by our manager!

When Joel inquired about the possible audit adjustment pertaining the significant finding arose from the 70 items, CM Tan responded, Just forget about it, you need not worry so much since based on my professional judgement, it is not material. Anyway, it is my concern, not yours! Do not forget, you are still under probation, I am the one who will evaluate your performance

Required:

(a)Discuss the relevant fundamental principles of MIA By law- ethical & conduct code and or ISA that Weng & Co and Joel Ong could have violated. (8 marks)