BUSN220 Week 1 Discussion.docx

BUSN220 Week 1 Discussion.docx - Craig Thorne works in a...

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Craig Thorne works in a public accounting firm and hopes to eventually be a partner. The management of Allnet Company invites Thorne to prepare a bid to audit Allnet’s financial statements. In discussing the audit fee, Allnet’s management suggests a fee range in which the amount depends on the reported profit of Allnet. The higher its profit, the higher will be the audit fee paid to Thorne’s firm. Required: 1. Identify the parties potentially affected by this audit and the fee plan proposed. 2. What are the ethical factors in this situation? Explain. 3. Would you recommend that Thorne accept this audit fee arrangement? Why or why not? 4. Describe some ethical considerations guiding your recommendation. Word Count:301 The parties affected would be the clients of Allnet and Thorne. The ethical issue I see is the incentive to inflate the numbers in order to gain a higher audit fee. GODs Word Translation of 1 Timothy 6: 10 reads, “Certainly, the love of money is the root of all kinds of evil. Some people who have set their hearts on getting rich have
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