Case Study Aud610
Question 1
Identify the situation that violated the MIA by Law and explain why?
According to Section 240.5 of Referral Fees and Commissions of MIA by Law, in certain circumstances, a professional accountant in public practice may receive a referral fee or commission in relating to a client. For example, where the professional accountant in public practice does not provide the specific service required, a fee may be received for referring a continuing client to another professional accountant in public practice or other expert. Accepting such a referral fee or commission creates a self-interest threats to objectivity and professional competence and due care. In this case, Amirul had accepted a certain percentage of the audit fee from Ariff because Amirul was the one who approached Ariff to undertake a financial statement audit of VCE Construction Work Sdn Bhd. For that reason, it violated Section 240.5 of MIA by Law because the money received by Amirul is evidently a referral fee. Thus, create a self-interest threats to objectivity and professional competence and due care to Ariff. Section 130 of MIA by Law governs the Professional Competence and Due Care expected from professional accountant. Stated under Section 130.1 of MIA by Law, the principle of professional competence and due care imposes the following obligations on professional accountants, which are: (a) to maintain professional knowledge and skill at the level required to ensure that clients and employers receive competent professional service: and (b) to act diligently in accordance with applicable technical and professional standards when providing professional services. Likewise, Section 130.4 states that diligence encompasses the responsibility to act in accordance with the requirements of an assignment, carefully, thoroughly and on timely basis. In this case, Ariff had abandoned his responsibility as the partner-in-charged because he is occupied with his construction company. As support, he
Identify the situation that violated the MIA by Law and explain why?
According to Section 240.5 of Referral Fees and Commissions of MIA by Law, in certain circumstances, a professional accountant in public practice may receive a referral fee or commission in relating to a client. For example, where the professional accountant in public practice does not provide the specific service required, a fee may be received for referring a continuing client to another professional accountant in public practice or other expert. Accepting such a referral fee or commission creates a self-interest threats to objectivity and professional competence and due care. In this case, Amirul had accepted a certain percentage of the audit fee from Ariff because Amirul was the one who approached Ariff to undertake a financial statement audit of VCE Construction Work Sdn Bhd. For that reason, it violated Section 240.5 of MIA by Law because the money received by Amirul is evidently a referral fee. Thus, create a self-interest threats to objectivity and professional competence and due care to Ariff. Section 130 of MIA by Law governs the Professional Competence and Due Care expected from professional accountant. Stated under Section 130.1 of MIA by Law, the principle of professional competence and due care imposes the following obligations on professional accountants, which are: (a) to maintain professional knowledge and skill at the level required to ensure that clients and employers receive competent professional service: and (b) to act diligently in accordance with applicable technical and professional standards when providing professional services. Likewise, Section 130.4 states that diligence encompasses the responsibility to act in accordance with the requirements of an assignment, carefully, thoroughly and on timely basis. In this case, Ariff had abandoned his responsibility as the partner-in-charged because he is occupied with his construction company. As support, he