Semester 1, 2012
Assessment one: Individual report
Ethical issues in auditing
This report provides an analysis of dealing with professional and ethical issues when offering auditing services. It gives a brief decision-making process model by first identifying the key issues and relevant standards involved in the case and then combining theories with reality and giving a short conclusion and some recommendations at the end. 1.0 Introduction
Ethical issues in auditing are situations where individuals have to make a choice from unclear and complex alternatives in auditing, where each alternative may be the right choice according to a specific moral position or viewpoint. (Leung et al.2011) John, a young CPA working for an audit firm, is now facing a dilemma when he was asked to draft a report on the reliability of internal control of Moulberg Electrical Application Ltd. During his work, John found the internal control of Moulberg was poor and detailed everything in his report to his partner; however his partner replaced John’s report with a brief one with a conclusion that Moulberg’s internal control was sound and reliable. This report will firstly display both professional issues and ethical issues faced in this case. Secondly, it will analyses the issues and makes a conclusion about those issues. Finally, it will give some recommendations to John on how to deal with his dilemma. 2.0 Professional Issues
The first issue involved in the case is whether audit evidences mentioned in the report are sufficient and appropriate or not. ASA s.6 requires auditor shall design and perform audit procedures that are appropriate in the circumstances for the purpose of obtaining sufficient appropriate audit evidence. (ICAA Auditing and Assurance Handbook 2012)The quantity of evidence affects the acceptance and reliability of the report. John, as a CPA, needed to conclude whether sufficient appropriate audit evidence has been...
References: Leung, P., Coram, P., Cooper, B.J. (2011). Modern Auditing & Assurance Services (5th Ed), Australia: John Wiley & Sons.
ICAA Auditing and Assurance Handbook 2012: John Wiley & Sons.
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