Tommy O'Connelll Case Study

Topics: Audit, Auditing, Auditor's report Pages: 6 (2333 words) Published: October 10, 2012
1. Compare and contrast the professional roles of an audit senior and a staff accountant. In your analysis, consider the different responsibilities assigned to each role, the job-related stresses that individuals in the two roles face, and how each role contributes to the successful completion of an audit engagement. Which of these two roles is (a) more important and (b) more stressful? Defend your choices. An audit senior leads client audit engagements, which include planning, executing, directing, and completing the audit of the financial statements. The following are some of the professional roles of an audit senior on an engagement: •Researching and analyzing financial statement and audit related issues. •Acquiring a working knowledge of the client’s business. •Interacting with key client’s management to gather information, resolve problems, and verify audit evidence. •Recognizing critical issues and developing necessary skills needed to solve problems. •Planning audit procedures, executing the procedures, and allocating related jobs to the staff accountants. •Supervising and training new-seniors and staff accountants. •Preparing for quick and timely evaluations of staff accountants. The Staff Accountant has the most common duties and responsibilities typically relating to low risk audit areas: •Acquiring a working knowledge of the client’s business. •Assisting the audit seniors when he or she is planning the audit procedures. •Executing the audit procedures which are assigned to the staff accountants. •Interviewing audit client’s employees, reviewing related documents, gathering evidence, and verifying the management’s assertions. •Reporting the process of their assigned job to the audit senior in a timely manner. To accomplish these roles, both the audit senior and staff accountant should obtain a thorough understanding of PCAOB, GAAS, GAAP, SEC regulations and the audit firm’s common audit procedures and techniques. Generally, the persons who are in the higher positions have more responsibilities and stress than the persons who are in the lower positions. As an audit senior, he or she is responsible for fulfilling the final duties on the audit result; in fact, he or she has the responsibility of not only supervising, training, and mentoring new seniors, staff accountants, associates and interns on the audit process, but also reviewing and guiding the work of the people reporting to him/her, and performing their own work which has been assigned to them by managers or partners which typically involve higher risk areas. If the audit report is misleading or expressing the wrong opinion because of the inefficacy of the staff accountants, the primary responsibilities would be attributed to the audit senior not the staff accountants who actually performed the work. This is because the audit senior signs off on the audit documents stated that he reviewed, supervised, and monitored the work of the staff accountants. The managers and partners on the job also review the workpapers but assume that they are a high quality because the senior has already reviewed and signed off on them. Therefore, I think that audit senior’s role is more important and stressful than the staff accountant’s.

2. Assume that you are Tommy O'Connell and have learned that Carl Wilmeth will be working for you on the Altamesa audit engagement. Would you handle this situation any differently than Tommy did? Explain. Personally, if I were Tommy O’Connell and had learned that Carl Wilmeth would be working on the Altamesa audit engagement, I would be concerned. The reasons are not only because of Carl’s professional inexperience, cockiness, and bad reputation, but also because of my personal job performance which is crucial for my promotion. I know that as the senior, I am ultimately responsible for the staff’s work. However, I would try to overcome this challenge by dealing with it differently compared to how Tommy handled the...
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