RSM323-Zhu Mei-Assignment 1

RSM323-Zhu Mei-Assignment 1 - Student Name: Zhu Mei Student...

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Student Name: Zhu Mei Student Number: 995984001 UTORid: zhumei My Role: Staff Accountant of an accounting firm User of the report: MQ Financial Regarding: As one of the staff accountants in an accounting firm, our fundamental professional responsibility is to provide professional opinion based on the company’s financial statements and other working papers we audit. We should make sure our audit does not violate Canadian generally accepted auditing standards (GAAS) as well as our professional responsibilities. Here, I am asked by my partner to review the audit report of GMI prepared by B&C, to find out the legal liabilities B&C owes to MQ Financial. All of myy opinion will be complied with GAAS and my professional conduct. There are a few ethical issues needed to be discussed. Since CAS 200 requires auditors to comply with relevant professional ethical requirements. Here, we should look at Rules of Professional Conduct (ROPCs). 1. The ROPCs 204 state that auditors should behave independently relating to audit engagement. This requirement may not have been met because: The lead partner Earl has been on the GMI engagement for the last 2 years, this is the third year he works with GMI. This causes a familiarity issue because his two years’ experience with the same client may influence his professional independent behaviour. The evidence proves his professional behaviour lack of independence, is he signed the unqualified audit report which clearly shouldn’t be signed, and failed to report a major business risk of GMI to MQ Financial before hand in the audit report. 1
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Student Name: Zhu Mei Student Number: 995984001 UTORid: zhumei Since the lead partner of engagement team should read the whole audit report before he signed, Earl is responsible for breach of contract and fraudulent misrepresentation after he signed this unqualified audit report. 2. The ROPC requires auditors to maintain professional competence : “Members maintain their professional skills and competence by keeping informed of, and complying with, developments in their professional standards”. The auditor Paula Kelly who prepared the audit report does not have much experience. She is one of the students hired to help out during busy season, but asked to prepare the audit report individually. Her professional skill is considered not competitive among all the other auditors. 3. The ROPC 206 requires auditors to
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RSM323-Zhu Mei-Assignment 1 - Student Name: Zhu Mei Student...

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