Hollinger_AUdit_acceptance

Hollinger_AUdit_acceptance - HOLLINGER INC.* Audit...

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HOLLINGER INC.* Audit Acceptance Decision J. E. Boritz and L. A. Robinson Centre for Accounting Ethics School of Accountancy University of Waterloo Waterloo ON N2L 3G1 January 2005 * This case has been developed from publicly available information solely for discussion purposes and does not purport to be a complete and accurate recounting of all relevant facts, events and conditions. Page 1
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Hollinger Inc. Learning Objectives This case is designed for use in an accounting, auditing or corporate governance course.  Through the case, students are encouraged to consider the managerial and professional  considerations in a client acceptance context. In particular, students will assess red flags in the  context of a high profile client acceptance decision. Introduction  As the clock ticked the minutes away, Peter Smythe stared out his office window, deep in  thought. His partner Jim Bones was expecting a call from him and Peter was filled with  unresolved concerns. A week had gone by since Jim had presented him with a document for his  approval, and a week’s worth of contemplation and consultation with his advisory committee  had still not led Peter to a final decision on how to handle Jim’s request.  He looked at the file on  his desk labelled “Hollinger Audit Proposal” and knew he had to come to a decision one way or  the other. Jim was one of his prized colleagues, and Peter didn’t want to keep him waiting for a  decision.  He had promised an answer by today. He thought back to the week before when Jim had walked into his office with the proposal.  “I  know you will be shocked when you see what I have for you, but I haven’t gone soft in the  head,“ Jim had said.  “I want to put a proposal in for the Hollinger Inc. audit.  I think it’s a great  opportunity for us.  Peter was taken aback. “Hollinger? You’ve got to be kidding!”  Jim looked steadily at Peter and said: “Look, Peter, I know that Hollinger looks like a very risky situation given all the terrible  press it has been getting lately. But now that KPMG has resigned, Hollinger will need an  auditor. Someone is going to do it and I know we can do the job. The fees will be  significant and the risks are manageable. All the bad news is already out! Contrary to  what some may think, I think that the Board and management, including Lord Black,  would be very anxious to co-operate with a new auditor to win back some of their lost  credibility. We’ve been invited to present a proposal for the audit in two weeks. I know  that this type of engagement needs your blessing, so I’ve put together an analysis for you 
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This note was uploaded on 11/23/2009 for the course AFM 480 taught by Professor Gb during the Spring '09 term at Waterloo.

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Hollinger_AUdit_acceptance - HOLLINGER INC.* Audit...

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