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Phillips Petroleum: Advanced Auditing Case Study

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Phillips Petroleum: Advanced Auditing Case Study
Phillips Petroleum
Case Study

Prepared by

For Professor C.E. Reese in partial fulfillment of the requirements for
ACC 502- Advanced Auditing

School of Business/ Graduate Studies
St. Thomas University
Miami Gardens, Fla.
Term A1/Spring 2014
February 17, 2014

Table of Contents
Issues……………………………………………………………….Page 3-4
Facts………………………………………………………………..Page 4-5
Analysis/ Authority………………………………………………...Page 5-8
Conclusions/ Recommendation…………………………………….Page 8
References………………………………………………………….Page 9-10

Issues
Phillips Case Issue 1
Was Bill Grant justified in refusing to provide the requested workpapers to the grand justified in refusing to provide the requested workpapers to the grand jury?
Phillips Case Issue 2
Does a public accounting firm have a responsibility to its partners and employees when they are subpoenaed to testify regarding a client?
Phillips Case Issue 3
During an audit what are the purpose of “attorneys’ letters”? How does the fact that attorneys are aware that letters can be routinely subpoenaed affect the quality of the audit evidence yielded by these letters?
Phillips Case Issue 4
During an audit is documentation like the tax accrual audit workpapers affected by an auditors’ knowledge that those workpapers can be obtained by the IRS?
Phillips Case Issue 5
5A. What is the scope and authority of the AICPA 's Statement on Standards for Tax Services? 5B. What is the scope and authority of the IRS Circular 230 standards? 5C. How do these standards impact an auditor 's tax accrual workpapers for a public company client?
Phillips Case Issue 6
6A. After IRS Announcement 84-46, 1984-18 IRB 18, which was a derivative of the Arthur Young Supreme Court decision, IRC Section 7602 "fishing expeditions" thru tax accrual workpapers were restrained. What is a "fishing expedition"? 6B. How did enactment of IRC 7525 change protection for the auditor 's tax accrual workpapers? 6C. On May 24, 2010, the U.S. Supreme Court denied


References: PCAOB Rules Section 5. Investigations and Adjudications. Rule 5105. N.p., n.d. Web. Retrieved April 7, 2014. http://pcaobus.org/Rules/PCAOBRules/Pages/Section_5.aspx#rule5105 Audit Evidence. Auditing Standard No. 15. PCAOB, n.d. Web. Retrieved February 17, 2014. http://pcaobus.org/Standards/Auditing/Pages/Auditing_Standard_15.aspx#auditevidence AU Section 9326. Public Company Accounting Oversight Board. N.p., n.d. Web. Retrieved February 17, 2014. http://pcaobus.org/Standards/Auditing/Pages/AU9326.aspx#2 Statements on Standards for Tax Services. AICPA. N.p., n.d. Web. Retrieved February 17, 2014. http://www.aicpa.org/interestareas/tax/resources/standardsethics/statementsonstandardsfortaxservices/pages/default.aspx Circular 230 Tax Professionals. IRS, n.d. Web. Retrieved February 17, 2014. http://www.irs.gov/Tax-Professionals/Circular-230-Tax-Professionals Fishing Expedition. Business Dictionary, n.d. Web. Retrieved February 17, 2014. http://www.businessdictionary.com/fishingexpedition Internal revenue code Section 7525. American Institute of CPAs, . N.p.. Web. Retrieved February 17, 2014. http://www.aicpa.org/INTERESTAREAS/INFORMATIONTECHNOLOGY/RESOURCES/PRIVACY/FEDERALSTATEANDOTHERPROFESSIONALREGULATIONS/INTERNALREVENUECODE/Pages/default.aspx Supreme Court Declines to Hear Textron Work Product Privilege Case. Journal of Accountancy, n.d. Web. Retrieved February 17, 2014. http://www.journalofaccountancy.com/Web/20102952.htm.
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