Auditing and assurance revision question and answer

Auditing and Assurance Revision Questions and Answers

Your firm is a member of an internationally recognized network of accountancy firms and provides wide range of professional services. A large multinational company, East to South wishes to have a business presence in Nepal. Having completed the necessary regulatory formalities, the management of the company has approached your firm for appointment as auditors. The management has also requested you to provide the following services in the current year:
i) Carry out market search to identify the parties engaged in distribution business. The fee will be dependent on the eventual appointment of the distributor the management;
ii) Recruit professionals in the position of Head of Finance and Internal Audit;
iii) Provide a general ledger package that has been developed your firm.
Explain your company’s position to accept or reject assignments offered in light with the provisions of Code of Ethics and other pronouncement of the Institute

Answer
As per the Code of Ethics issued ICAN, the principle of objectivity imposes the obligation on all professional accountants to be fair, intellectually honest and free of conflicts of interest. Professional accountants in public practice when undertaking a reporting assignment, should be and appear to be free of any interest which might be regarded, whatever its actual effect, as being incompatible with integrity, objectivity and independence.

When a professional accountant in public practice, in addition to carrying out an audit or other reporting function, provides other services to a client, care should be taken not to perform management functions or make management decisions, responsibility for which remains with the board of directors and management.
Keeping in view the above provisions, all the services so offered are management responsibilities and hence it is to be decided whether your firm wants to take up audit assignment or other services offered, but not the both.



(Visited 4 times, 1 visits today)
Share this on:

Leave a Reply

Your email address will not be published. Required fields are marked *