Ethical Principles for Philosophical - myassignmenthelp.com

Question: Write about theEthical Principles for Philosophicaland Professional. Answer: a) James Bromley, Auditor, has not violated the general ethical principles. There has been no violation of ethical principles simply because James obtained permission from his clients to reveal their tax details to Jayne Godfrey, the new Accountant purchasing the practice. By asking the clients if he can reveal their tax details to Jayne, it is an ethical principle of faithfulness whereby he respected the clients. An ethical principle of doing no harm was also applied by James as he did not want to harm the clients by giving out their tax details before consulting them. Jamesfurther applies an ethical of benefiting others by potential services they could use; thispromotes the well-being of Jayne and the clients too. (Jordan 2010, p. 235-260) b) There has been no violation of ethical principles. There is an ethical principle of respecting autonomy whereby an individual has the right to act as a free agent and therefore free to decide how they live their lives as long as they do not negatively impact the lives of others. In this case, Fred Hingarra,Auditor has just spent 6 years oversees playing soccer of which it is his right and or decision and this therefore does not prevent him from auditing since he is an Auditor. (Jungers et al. 2013) c) There has been no violation of ethical principles. The Asquith Accountants by advertising a special in the local paper that they guarantee to provide their clients with a tax refund within 10 days, they are promising to keep and are therefore faithful to their clients and therefore there is no ethical principles violated. (Jungers et al. 2013) d) There has been no violation of ethical principle. By asking Amy Harris, Auditor, who is an auditor for a chartered accounting firm during the day to be the treasurer of the local athletics club which is not for profit institution and Amy`s firm does not audit the athletics club, it is an ethical principle of benefiting others as Amy Harris, Auditor can benefit from being a treasurer as another form benefits from auditing. (Jordan 2010, p. 235-260) e) The Gordan Accountants have violated the ethical principle of benefiting others by providing inappropriate report to Simtec Ltd after being asked to carry the auditing from 7th to the 2nd September 2016. (Jordan 2010, p. 235-260) f) There is violation of ethical principle; benefiting others. The cheap Insurance Company instead of benefiting the local accountant, DavidDale, it wants him to give out his potential clients at a low commission, 5%. (Jungers et al. 2013) A) Self review threat These arises when the auditor collects data and comes up with a well prepared accounting information for the firm.. In this case,Kartina Ng,the Senior Accountants Manager, from Jenkins Ltd falls ill and is replaced by Ellen Davis from our accounting firm,Thornleigh Accountants for the next four months,Self-review threat comes in when after two months our firm intends to include EllenDavis as part of the audit team of Jenkins Ltd when Ellen Davis had also prepared some of the accounting for the Jenkim Ltd.Ghandar says that a large in firms, this threat can be addressed by separating the accounting and audititing work between two distinct teams or partners that operate independently of each other. In this case therefore, the self-review threat could be addressed by not including Ellen Davis in the auditing team. (Jungers et al. 2013) b) Multiple referrals threat This type of threat usually arises in the case where an auditor receives variousnumber of referrals from a specificclient. In most cases, the multiple threat is also known as a self-interest threat. In this case, John Dargin, theAudit Manager of the Dargin Associates Accountants, has just received the accounts from Winmalee Ltd. The senior staff bonuses are all relate to the firm`s profit performance and Winmalee have provided copies of details taken from various accounting standards which are sympathetic to their approach to valuation of these assets. This causes a multiple referrals threat which is also a self-interest threat as Winmalee have provided copies of details taken from various accounting standards which are sympathetic to their approach to valuation of the assets. Issuing a qualified report could impact on that referral relationship and in turn impact on their business. (Jordan 2010, p. 235-260) c) Multiple referrals threat Multiple threats usually occur when an auditor gets various number of referrals from one client. This threat at times is always linked to as self-interest review. In this case, the chocolate company has asked our firm to carry out the audit of its financial statements and also invite our firm to visit its seconds chocolate shop where defective chocolates are sold at a considerable discount prior to completing the audit. This leads to a multiple referrals threat since the chocolates company asks for an audit of its financial statements but before the audit is finished, it invites our firm to visit its second chocolate shop. Issuing a qualified report could be difficult as auditor may have to consider the interests of the chocolates company especially when it is the only client. (Jungers et al. 2013) D) Self-interest threat This threat comes up in situations where an auditor has only one particularclient .It arises also when one client represents an importantproportion of their business or company. In this case I experience self-interest threat since am asked to meet Mike Steketee,the Managing Director and in the meeting am advised that his firm is going to be expanding and expects the auditor to be flexible in their approach.Since am not sure of auditing the Expert Travel company the following year,Mike Steketee might be my only client and therefore I will less likely to to issue a qualified audit opinion or something that will cause an issue for the client because am worried about losing the client. (Jordan 2010, p. 235-260) e) Relationship threat This sums anything that involves the auditor knowing the SMSF trustees, members, or accountant on a personal level.In this case I will experience relationship threat since a senior member of my audit team, Elaine Ong is engaged to James Bing who is the senior accountant at Elmtree.I may not give out a qualified audit opinion just maintain the relationship between Elaine Ong and James Bing, the senior accountant at Elmtree.By engaging in this, I cannot achieve independence in auditing. (Jungers et al. 2013) f) Relationship threats Relationships threats cover a large area. Generally, they entail anything that involves the auditor knowing the SMSF trustees, members, or accountant personally. If that relationship is close for instance one that involves related members by blood, one cannot achieve independence in auditing.In this case, one of our senior auditors on the audit from our audit firm,MCM Accountants,Diane Polo plays on the same softball team as the Elise Lift the Senior Account,and several other staff members from Rangers Ltd which is to be audited.As MCM Accountants we may not issue a qualified audit report since we wantto maintain a relationship between one of our senior auditors, Diane Polo and the members from Rangers Ltd. (Jungers et al. 2013) Some of the details required to be involved in audit report of the financial statements of a public company include the following; Governance structure of the company For any public company to operate effectively keep its records safe, the governances format should be up to date at the end of every financial year. A governance structure entails the following, the authorized share capital, issued and fully paid shares, names of executive directors and non-executive directors, names of bankers and auditors, legal firms and the directors report outlining the performance of the company in the preceding year. (Jordan 2010, p. 235-260) Company operations The various operations undertaken by the public company are very significant to its achievement. Such operations must be included in the financial statements at the end of the year. Some of the details attached under this section are accounting policies adopted. New policies adopted by the company during a given year must be recorded so as to keep a clear review of the companys progress. (Jungers et al. 2013) Financial statements For any audit report to be useful and effective, it has to include financial statements. Financial statements help the company to be in a position of knowing whether they are making profits or losses.Among the details to be included here are, comprehensive income statement, statement of financial position or balance sheet, cash flow statement, statement of responsibility of the board of directors, statement of changes in equity and notes to financial statements supporting how the figures were arrived at. (Jungers et al. 2013) Vital and critical audit issues These are matters that are encountered by the auditor as he carries out the report of financial statements. These matters should be addressed since they are important to any user of financial statements at large. Information users need to be able to identify such matters in order to have a good valuation of what they need. Most of these matters are addressed by the members of the audit for any public company. (Jungers et al. 2013) Critical audit matters Communication of critical matters by the auditor needs to be given keen interest. The auditor has to use a good introductory language in relaying information. A financial statement should contain such critical matters. They assist anyone in need of financial statements for good revaluation. Critical issues also help the company in their future planning of activities. Without knowing the vital matters the company cannot know which important things to look at when starting a new financial year. (Jordan 2010, p. 235-260) Company policies and procedures The policy of the company that guides in keeping of records is vital to a company. They help in knowing the manner in which data will be recorded and kept. The policies should be in line with the actual and real transactions of the company. A good reflection of the assets should be seen and shown accurately without altering anything. The auditor need to give satisfaction to the company that all the information concerning the companys activities is effective and not biased for use. (Jungers et al. 2013) Report of the Chief Executive Officer The CEO is required to give a report of the business activities undertaken by the company during the financial year. He should be able to explain more about what transpired on including which activities did well and those that had difficulties. The Chief Executive Report is very important to users since most of them major in reading what the CEOs report say. Being a very key detail, he should be able to give an effective report free from bias. The report need to be real. It forms a basis of morale to information users and it will enable them continue reading more about the company. (Jungers et al. 2013) References Jordan A.D. (2010).Ethics: Principles and practices : Joseph Edna Josephson Institute of Ethics Survey of employee opinions, values, and behavior. Washington, D.C.: Dept. of the Treasury, Internal Revenue Service. 73(11), 235260 Jungers, C. M., Gregoire, J. (2013). Counseling ethics: Philosophical and professional foundations. Danvers, MA: Springer Pub. Co. 67(43), 89-93