MIA By Law Case Study

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Question 1
Identify the situation that violated the MIA By Law and explain why.(8 marks)

The first situation that violated the MIA By Law is this case is when Ariff Al-Hakim & Associates, a Chartered Accountant (CA) firm has been approached by Aminurrashid & Co, also a Chartered Accountant (CA) firm to undertake a financial statement audit of VCE Construdtion Work Sdn Bhd for the year ended 30th September 2011. However, this situation shows indirectly violation of the MIA By Law as the audit firm can ask the other audit firm to undertake as if the firm does not have capacity or due to lack of staff results from other factors as well there is restrain that result to the firm cannot perform the audit. But in this case, the situation when Ariff has offered Aminurrashid a certain percentage of the audit fee and Aminurrashid accepted if even though Aminurrashid has reluctant to accept initially is violated MIA By Law under integrity as the principle of integrity requires a professional accountant to be sincere, honest and straight forward in his business relationship and professionals. Aminurrashid should not accept the money and Ariff should not offer the percentage of audit fee as this also will arise the conflict of interest or any threats later. The second situation shows the violation of the MIA By Law is when Ariff accepting the offer instantly without considering the man power that he has. This situation shows that Ariff has violated the professional competence and due care. This is because Ariff need to know either his firm has capability in performing the audit due diligence and due care to avoid the incompetent services which result to unreliable report as well as the audit report can be questioned. The third situation shows in this case is when Ariff spend most of his time in his other company, a construction company and he seldom come to his CA firm and would trust the Audit Seniors to lead the assignments and subsequently review the working...
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