Ethical Violations And Auditing Opinion: A Review

Promised Tax Refunds and Ethical Breaches

It can be hereby stated promise of tax refund appears to be too good to be true. Even though, majority of accounting profession is sincere and honest, there exist a small number of preparers of tax who try to draw in potential clientele by promising refunds and that is unethical. According to APES 110 Code of Ethics for Professional Accountants, Section 130, this specific act of Berowra Accountants has breached the principle of “Professional Competence and Due Care” (William Jr et al. 2016).

The athletic club is a not for profit corporation and the work of auditor of large corporation that is Jamie Harvey has no association with the works of athletic club. Therefore, there is no violation of the ethical regulations as per APES 110 Professional Appointment under section 210 (Arens et al. 2012).

The Pymble Accountants undertook the audit activity of the firm Monlec Ltd. The assessor has the need to present unbiased audit opinion as per the directives mentioned under APES 110 (Principle of Objectivity) mentioned under section 120 (William Jr et al. 2016). In this case, the management of Monlec Ltd is asking for desirable as well as favourable audit report from the accounting firm. Thus, in case if the auditor presents a biased opinion, then there will be violation of auditing ethical principle.

Winton Accountants have divulged classified information regarding Motoring Services to particularly Chadwick Chartered Accountants by delivering all audit documents. Therefore, Winton Accountants is said to have violated principles of privacy as per APES 110 Principles of Confidentiality as per Section 140 (George et al. 2014).

Thornleigh Accountants have positioned Jane Davis for the assessment of Jenkins Ltd in place of the Leona Ng due to ill health of Leona Ng. This essentially directs towards threat of independence of audit for Thornleigh Accountants according to APES 110, Self-review Threat, Section 100.12 (George et al. 2014).

In the given case, the assessors can feel stressed by the client of the audit in a bid to agree to the judgement of clients of audit. By presenting the papers, Winmalee Ltd can generate stress on John for delivering desirable report of audit. Therefore, according to APES 110, Section 200.8, this particular circumstance can generate intimidation threat to the independence of the assessor (Arens et al. 2012).

In this case, the chocolate corporation might be striving to influence auditors and their judgement on the assessors by way of inviting them to different entertainment activities since their ulterior intention can be to arrive at desirable audit opinion. Thus, in accordance to the directives stipulated under APES 110, Self-interest Threat, Section 100.12, there can be threat to independence of auditors (George et al. 2014).

Conor Company has not manipulated the financial assertions in order to conceal poor debt paying state of affairs (George et al. 2014). Therefore, the assessor will issue Unqualified Opinion for the corporation Conor Company. 

As per the given case, the corporation is supposed to pursue FIFO method for the purpose of inventory valuation but instead they have taken up LIFO methods since their parent corporation of America utilizes it. The variances and differential effect of the FIFO and the LIFO has affected inventory valuation that in turn affected materiality of the statements (George et al. 2014). Barring inventory, there is no sign of material misstatement in the financial assertion of corporation and there subsists no compliance issue. Thus, auditor will necessarily issue qualified audit opinion.  

The company Victorian Manufacturing Company has not undertaken valuation of their warehouse for the past five years since the directors believe that there is not any alteration in particularly market value. Therefore, directors are considering major suppositions that might not be appropriate and can lead to material misstatement. Therefore, the auditors during review have the need for fair value of particularly land as well s buildings. Essentially, the auditors might fail to provide appropriate audit review since it restricts their entire examination procedure. It is for this reason; the assessor will necessarily issue Disclaimer of opinion since they are unable to whole report (Arens et al. 2012)

Reference

Arens, A.A., Elder, R.J. and Mark, B., 2012. Auditing and assurance services: an integrated approach. Boston: Prentice Hall.

George, G., Jones, A. and Harvey, J., 2014. Analysis of the language used within codes of ethical conduct. Journal of Academic and Business Ethics, 8, p.1.

William Jr, M., Glover, S. and Prawitt, D., 2016. Auditing and assurance services: A systematic approach. McGraw-Hill Education.