Auditor Independence and Audit Quality Principles

Question: Discuss about the Auditor Independence and Audit Quality Principles. Answer: Introduction: It can be observed from the first situation that because of last years impressive audit, the CEO of Luxury Travel Holidays Ltd would reappoint CJ (Clarke and Johnson) as the companys auditor for the financial report of 30 June 2015. However, CJ would be reappointed subject to the condition that it would give an interesting speech about the company that can assist in enhancing its businesses, thereby attracting more investors as a whole (Hoffelder, 2012). Hence, it can be witnessed that CJ is restricted to frame an unbiased opinion on the company financials, as it would not procure the auditors job if the instructions of CEO were not duly complied with. Further, in the second situation, it can be observed that LTH had proposed a complimentary 14-day holiday package to the auditors for the anticipation of another smooth audit process in 2015. However, in reality, such anticipation of the smooth audit can be interpreted as a biased and unprofessional judgment on the company financials t o be presented to its stakeholders. This implies a risk of familiarity threat because the company intends to alter the auditors judgment in lieu of their long-term engagement with the company (Bedard et. al, 2014). Further, in the third situation, Michael has been appointed as a part of the companys audit team, and his father is already the financial controller of the company. In other words, Michaels father is responsible for the preparation of LTHs financial reports. This situation also implies a familiarity threat because Michael as an auditor would hesitate to report any dubious activities on the part of the company, as the consequences of such reporting would result in the termination of his fathers job and other employees too (Fazal, 2013). Therefore, in this case, it would result in an unfair audit opinion regarding the financial statements of the company, and hence unacceptable as a whole. Lastly, it can be observed from the fourth situation that Annette has been chosen to be a part of LTHs audit team, and previously she had temporarily assisted LTH in preparing accounting entries and tax calculations. Thus, Annette is under a non-delegable responsibility to scrutinize her own doings. Besides, this implies a threat of self-review on the part of Annette, as it is a compulsion to get the work scrutinized by another person instead of reviewing it by o wn. It needs to be noted a person cannot audit a work on his own. Annette will be engaged in a biased view because she will not be able to trace any deficiencies in her won work. Hence, it is imperative and essential that an auditor and accountant should not be the one and the same person. It is advisable for Geoff not to bring Annette in the team of LTH (Holland Lane, 2012) In lieu of the threats identified above, various safeguards can be implemented to avoid such threats. Therefore, in the first situation, since CJ is prevented to frame an independent judgment, the most effective safeguard is to resign from such assignments and avoid standing for the post of reappointment as an auditor (Fazal, 2013). Furthermore, making effective communications with the committee of independent directors can also assist in safeguarding such threat. Further, in the second situation, the most appropriate safeguard would be the removal, rotation, and reassignment of partner or staff from the audit assignments. In addition, steps may be initiated in order to design strict restrictions regarding acceptance of any other gifts other than fees for performed audit services. In the third situation, since Michael, as an auditor is working for the company with his father being the financial controller of the same, it can be stated that Michael is clearly pursuing a personal inter est in the company that will restrict him to perform unbiased and fair audit processes. Therefore, the most appropriate safeguard in this scenario would be a discussion of the same with an independent audit committee because based on the SOX Act; no auditor can be selected as an auditor of the company wherein they possess any type of financial or personal interest. Moreover, the disclosure of such relevant interests with those charged with governance can also facilitate in safeguarding such threat (Gilbert et. al, 2005). In the last scenario, since Annette had to scrutinize her own doings being an auditor, it could result in an unfair audit process, and hence, instead of self-reviewing the work, some other qualified professional accountant or auditor must be selected in order to frame an independent and unbiased opinion (Church et. al, 2008). Therefore, in simple words, Annette must not be a member of the audit team of Luxury Travel Holidays Ltd. All the previously mentioned safeguards are very crucial in relation to the independence of auditors because audit threats play an important role in hampering the audit opinion framed upon the company financials, and therefore, proper implementation of safeguards can assist in encountering such audit threats, thereby facilitating in an independent audit process (Coram et. al, 2011). It is the primary responsibility of an auditor to take into account the prevalent business risks as well as the audit risks for the smooth functioning of an audit process. Therefore, in association with the purchase of equipment and spare parts, the major business risks to MSL are as follows. It can be observed that in association with the maintenance services offered by the company (MSL) to all its customers for the first two years after the purchase of a product, there was a failure to determine the true demand for the product. As a result, the key business risk can be subject to understatement or exaggeration of the requirement of spare parts. In relation to such business risk, the company (MSL) is under a non-delegable duty to evaluate the quantity of purchase in an effective manner because firstly, every product is offered with a warranty of two years and secondly, such products come from far-flung areas that can consume a massive amount of time. Therefore, proper evaluation of the quantity of spare parts can avoid occlusion of resources, thereby safeguard the lessening of the quantity of purchased equipment. Furthermore, if such action were not initiated, the advantage of interest income would also have vanished. Besides, this could have resulted in affecting the financials of the company because of improper expectation of the demand of spares. All these could also result in hampering the competitive advantage of the company because the adequate quantity of equipment would not be prevalent in order to address the needs of customers. Along with the previously mentioned business risk, there is another risk of theft or fraud that can be experienced by the company (Heeler, 2009). Such risk could generate during the purchase of equipment from global markets, and instruct the staff to go far away areas in order to complete the maintenance services. MSL has no presence of supplier based in Australia. The presence of suppliers can be traced outside Australia. The supplier of goods manufactures the goods and provides them to the warehouse of the MSL. The existence of risk in business is present in the form of destruction during the time of transport. It needs to be noted that appears no insurance of the goods from theft or destruction due to a loss in transport (Horngren, 2013). Thus, the amount of fraud or theft must be taken into account in relation to the previous years, in order to create an ideology to determine whether the company had initiated any corrective actions. In addition, it must also be determined whether the company had entered into any type of insurance policies to tackle fraud or theft. This could be done by investigating the amount of purchased quantities of equipment. In relation to the previously mentioned business risks, there are various audit risks in response to them. Thus, in association with the first business risk, the most crucial audit risk prevailing relates to a misstatement of the companys financial statements. This is because such business risk is directly associated with the condition of the sale of the equipment, and therefore, it is the auditors responsibility to verify whether such products sale price must be lessened or need it be depicted as costs in the companys P/L account (Carcello, 2012). The auditor needs to consider the aspect of risk that is present in the given scenario. Moreover, such spare parts could not be depicted under stock-in-trade because the part of such product that has been procured for want of free warranty will be depicted under liquid assets in the companys financials. Furthermore, various spare parts are not being covered under maintenance services provided by the company and hence, the auditor must cons ider such maintenance contracts as it will assist in highlighting what spare parts can generate funds, and what parts can be depicted as an expense. This is because charging an expense as revenue would exaggerate the companys resources, and charging revenues as an expense would understate the companys resources, thereby misguiding the stakeholders as a whole (Carcello, 2012). In both the scenario, there appears a difference and the difference will tend to affect the position of the balance sheet. In relation to the second business risk of theft or fraud, because mobile contractors travel to faraway locations, it consumes immense time, and therefore, it can ultimately lead in the falsification of truth, thereby hampering the faith of company upon the auditors (Mock et. al, 2013). When there is a longer time span there is always a possibility of tampering with the data as the evidence is difficult to be estimated. Therefore, in lieu of such scenario, it may be feasible for the auditors to travel to such locations of their own, so that proper evaluations of costs can be done, and the same can be compared to that of the mobile contractors to verify the truthfulness of their statements (Blay et. al, 2011). The account balance that is influenced directly comprises of the cost of the warranty, the cost of maintenance and the spare part cost. The irrelevant increment in the goods mentioned will ultimately affect the profitability. Audit risk can be described as the one that the auditor cannot judge the actual WDV of the closing stock because the management could not verify the right type of pricing that is produced and completely depends on the parts that are present in the manufactured products (Wright Charles, 2012). Furthermore, proper investigation of the companys engineers is not done, as they are not on the companys register of payroll. Besides, carrying spare parts for completing maintenance services can result in theft because the customers might not utilize such parts (Tepalagul Lin, 2015). Hence, the auditor must consider whether insurance policies are able to cover the equipment and spare parts of the company, and the time when consumers procure these items. In addition, the auditor must also scrutinize whether fraud has been created on the part of the company through improper arrangements with contractors in order to attain insurance benefits. References Bedard, J. N, Gonthier, B, Schatt, A. (2014). Costs and Benefits of Reporting Key, Harvard Press Blay, A. D Geiger, M. A. North, D. S. ( 2011). The Auditor's Going-Concern Opinion as a Communication of Risk. Auditing: A Journal of Practice Theory, 30 (2): 77- 102. Carcello, J. (2012). What do investors want from the standard audit report? CPA Journal 82 (1),7. Church, B., Davis, S. McCracken, S. (2008). The auditors reporting model: A literature overview and research synthesis. Accounting Horizons, 22(1), 69-90. Coram, P, Mock, T. J, Turner, J. Gray, G. (2011). The communicative value of the auditors report. Australian Accounting Review 21(3), 235-252. Holland, K. Lane, J. (2012). Perceived auditor independence and audit firm fees, Accounting and Business Research. 42(2), 115-141. Hoffelder, K. (2012). New Audit Standard Encourages More Talking. Harvard Press. Fazal, H. (2013). What is Intimidation threat in auditing?. Retrieved April 26, 2017 from https://pakaccountants.com/what-is-intimidation-threat-in-auditing/ Gilbert, W. Joseph J Terry J. E. (2005). The Use of Control Self-Assessment by Independent Auditors. The CPA Journal, 3, pp. 66-92 Heeler, D. (2009). Audit Principles, Risk Assessment Effective Reporting. Pearson Press Horngren, C. (2013). Financial accounting. Frenchs Forest, N.S.W, Pearson Australia Group. Mock, T. J, Bdard, J, Coram, P, Davis, S, Espahbodi, R. Warne, R. (2013). The audit reporting model: Current research synthesis and implications. Auditing: A Journal of Practice and Theory, 32, 323-351. Tepalagul, N. Lin, L. (2015). Auditor Independence and Audit Quality A Literature Review, Journal of Accounting, Auditing Finance, 30(1), 101-121. Wright, M.K. Charles, J. (2012). Auditor independence and internal information systems audit quality, Business Studies Journal. 4(2), 63-84.

Thomas Paine Essay Research Paper After meeting free essay sample

Thomas Paine Essay, Research Paper After run intoing a household called the Rumpels, Paine knew what he had to make. He wanted to be more clear. Then he started to compose Common Sense. He merely had a bed, a long pillow, thorax, coat-rack, table, two reasonably good suits of apparels, ink and paper. That was all that he needed plus a few pennies for tapers, something for nutrient, and something to imbibe. Paine started imbibing rum or anything that would assist his pen move on the paper. Without recognizing it, he neglected his appearence, sometimes passing 24 hours in his room, shaving less frequently, keeping his little hoard of money, leting his apparels to have on out and go shabby. Thomas sometimes sold a verse form or two to Aitkin. While he would sell, Aitkin would inquire how his chef-doeuvre would be coming along. Paine said that it wasn # 8217 ; t a chef-doeuvre, it was merely some common sense. We will write a custom essay sample on Thomas Paine Essay Research Paper After meeting or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page When he was finished with it, Aitkin refused to print it because he didn # 8217 ; t want to acquire caught for lese majesty. He did, nevertheless, recommend someon vitamin E who ‘prints everything. Paine went to the adult male whose name was Bobby Bell, besides a Scotsman. It was shortly published as a little book. Peoples everyplace were purchasing it and reading it to groups of people. Paine said that Bell could maintain the net incomes because Paine didn’t expect to sell any books. To his surprise though, one hundred-thousand transcripts were sold in three months. He made up many peoples’ heads during the Revolution for what they were contending for. He continued to print a series of booklets called the Crisis which was published from 1776-83. Paine died on June 8, 1809. He was populating in poorness. He wasn # 8217 ; t as celebrated and well-known as he had been earlier because of some unfavorable judgment he made of George Washington in a missive to him. On his deathbed, many people tried to do him turn into a Catholic since he had no faith. All their attempts were lost every bit shortly as he died. He wasn # 8217 ; t as celebrated and well-known as he had been earlier because of some unfavorable judgment he made of George Washington in a missive to him.

Social Media And Humour Essay Samples

Social Media And Humour Essay SamplesThe use of social media and humour is becoming increasingly popular nowadays. Many companies have turned to using the internet as a way to communicate with customers and employees, and many companies are becoming increasingly interested in using social media to get their point across.Companies can use these techniques to share any information they want. No matter what it is, from news to advertisements, your company is sure to find an angle that will work for them. The truth is that with social media, no matter what type of company you are, you can reach out to as many people as you can to spread the word about your company.It's not just small businesses that use these techniques either. Corporations are getting into this area because of the great results they get from the use of social media. Here are a few examples of how your company can use these techniques to get their point across. These examples only apply to people who are already good at using social media, and the people that will be reading this article, but other companies can use these techniques as well.News - A unique and interesting way to get your point across is to publish an article on a particular subject. You could even create a blog for your company, and host the article on it so people can read it. Share a special message on Twitter or Facebook that you want to get across, and provide links to the article.Social Media - Another example is to join a list of companies that all have a common interest in the topic you are writing about. These companies will receive your article and comment on it, and this will increase your website's exposure.Companies that are using social media can do this with great results. Remember that when a company reaches a certain audience, and gets their message across to those people, theyare going to get the exposure that they want.Companies that are using social media are reaching out to those that are in the same niche as th em. They have created networks where there are people in their niche, and so by showing their niche, they are able to get a higher exposure and wider audience.

Latin American Independence Essays (737 words) - Americas

Latin American Independence Latin American Independence The Spanish amassed great wealth and power in their American colonies through oppression, slavery and racism. An amazing variety of classes developed and created a social gap in the people. At the turn of the nineteenth century, the American-born population began to advance towards independence. The process did not happen over night. Instead, it developed slowly due to social, political, ethnic, and economic factors, and the often bloody war for independence raged for fifteen years. Enlightenment radically altered the ideas of people in Europe and America. Ideas that challenged old truths began to develop; ideas that praised individual rights such as the notion that ultimate authority in society resides with the people, not with the king, or that all people are created equal in nature and possess equal rights. The French and American revolutions were strongly influenced by these new, bold beliefs. Inspired by the ideas of the Enlightenment and the wars for independence in other parts of the globe, Latin American gained momentum to began their own revolution. America was a mixing of many different races and each caste held specific rights and limitations. Natural born Spanish had access to the advantages and held the majority of power. The wealthy Creoles were able to ascend to positions of authority, but were always a step down the social ladder from the natural Spanish. Social inequality in America caused tension among the native population. When Spain, in an attempt to centralize their administration (spurred by the Enlightenment), began replacing Creoles with Spaniards in judicial and legislative offices, the tension was escalated even further. This challenged the position and comfort of wealthy Creoles, and motivated them to support independence. The antagonism and bitter feelings between American Creaoles and those Spaniards born in the Iberian Peninsula who came to Latin America, helped ignite the emotional tinderbox that flared in 1810. (Clayton & Conniff, 20) Creole unrest was widespread when Napoleon invaded Spain and Portugal in 1807. For the Latin American revolution, the timing could not have been better. The monarchs were disposed and Napoleon installed his brother as king. Spanish rebels fought the illegitimate Bonaparte in a civil war for six years. This left the colonies isolated and they rejected the authority of Spain. As a solution, they created local governments, of juntas, primarily filled with Creoles to rule in the kings absence. Dissatisfaction had been given ideological form by the Enlightenment, awhile the crown and peninsulares had thoroughly antagonized Creoles for decades by denying them what they considered their legitimate aspirations. Napoleons invasions of Spain, by suspending colonial loyalty to the Spanish sate, touched off the fuse to the powder keg. (Clayton & Conniff, 22) Independence took different courses between regions. Some, such as Brazil, were relatively peaceful, but others, such as Peru and Mexico, were bloody. The wars for independence distinguished many brave and courageous soldiers. The names of patriots such as Bolivar, Hidalgo, San Martin, and Artigas among many others, inspire pride in the Latin America. After the revolutions began, success did not come smoothly. Counterrevolutions took back many of the initial successes from the patriots, but tenacity and devotion finally, after fifteen years, won Latin America its freedom. Independence brought new problems and challenges. The struggle to create new legitimate forms of government created differences, and political turmoil created confusion and tension. The church was attacked for being conservative and suffocating. Revolutionaries wanted to take the churches power and lands. This created clearly defined battle lines that caused enduring problems for the new nations. One of the basic ideals of the revolution was freed for all people, but this created unexpected problems. Tributes were eliminated and Indians were given rights as citizens, but the national governments quickly realized they depended on the income obtained from the tributes. Thus, the tribute was restored. The revolutionaries also sought to give the Indians freedom, and they gave them individual property rights. The Indians who were not familiar with private ownership were easily taken advantaged. As a result of freedom and the end of the communal system, many Indians were left without protection and they slid even further down the economic ladder. Political disorder and powerful leaders attempting to regulate authority marked the period

Columbus, the Indians, and Human Progress Essay Example

Columbus, the Indians, and Human Progress Essay Example Columbus, the Indians, and Human Progress Paper Columbus, the Indians, and Human Progress Paper Spain, being recently unified, wanted spices and gold. The gold to them could purchase anything. So they offered Christopher Columbus ten percent of the profit, if he would bring back gold and spices. Christopher Columbus was sent to Asia with three ships: the Nina, the Pinta, and the Santa Maria. Columbus sailed for thirty-three days not sighting land. It wasn’t until early October of 1492 that he and his crew finally landed. He supposedly was the first to sight land and received a ten thousand maravedis as his reward. It was not him, but a member of his crew who first sighted land, Rodrigo. But Columbus got the credit. As Columbus and his crew approached the island, they were greeted by the native inhabitants of the island. The natives were the Arawak Indians, and the island they were on was the Bahama Islands. The Arawaks gave them food, water, and incredible gifts. Columbus took some of the natives as prisoners so they could show him where the gold was. They took him to Hispaniola. Hispaniola, as Columbus reported, was beautiful, fertile, filled with gold and other metals. Columbus had promised Spain and investors gold, but there wasn’t much gold to be found. He ordered that Indians ages fourteen and over to collect gold. After the Indians collected the amount of gold required, they were given copper token necklaces to prove that they had collected the gold. Later, it was obvious that no more gold was left to collect, so the Indians were taken to work on estates. They worked hard and many died. None of the original Arawaks were left on the Bahama Islands. Bartolome de las Casas transcribed Columbus’s log. He wrote a multivolume History of the Indies. He wrote that the Indians had no temple, if not a religion. Las Casas writes of how the Spaniards were becoming more conceited as the days passed. The Spaniards killed for fun. They considered themselves to on top of the world. After collecting gold for about 6-8 months, the gold was melted. This was such hard labor, that many died. According to Casas, over three million died. The women were so malnourished that they could not produce milk for their babies. The babies were often killed out of the mother’s desperation. The men worked so hard in the mines, stressed killed them. Samuel Eliot Morison wrote that we shouldn’t accept the atrocities so easily, but to not make a big deal about it either, because it was in the past. It didn’t happen to us in the present. No point in grieving for the victims or judging the villains, because it won’t make a difference. It’s much easier to bury the truth than hide it. Columbus did it to the Arawaks, and others did the same. Such as Cortes to the Aztecs, and Pizarro to the Incas. They all took advantage of the natives and abused everything they received. Were these massacres really necessary for the progression of the human race? Of course this question can easily be debated, but remember the key word, necessary. All the gold and silver Spain received, it didn’t make it richer, but a little more powerful in the combat area. What was the point of being a little stronger if you lost the wars to come? Everything became worse than it was before. Even though Columbus referred to the natives as Indians, we do so because there is the possibility that they originated from Asia. Indians have become more evolved. Around the time of Christ, there was a culture of Indians, also known as Moundbuilders. They built many gigantic sculptures. Many Indian cultures had their own laws, poetry, and tales to tell on to future generations. The main point being this: is it right for someone to take another’s life just to progress in life and tell the story as if they were the heroes?

The Dilemma That Exists Case Study Example | Topics and Well Written Essays - 500 words

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Maslows Hierarchy of Needs Essay Example | Topics and Well Written Essays - 250 words - 1

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