Business Accounting and Ethical Standards

A) The duty of the auditor arises from the ASA 315 which in conjunction with ASA 570 on Going Concern wherein he has to see if there is an environment which leads to misstatement of records. He should accordingly recalibrate his assessment. With the new evidence, he should check if there exists a material uncertainty and therefore conjectures to the ability of the pany to continue as a Going Concern. With the new evidence, the auditor will see the following that there is an immense doubt on the fact whether the pany can continue as a Going Concern and therefore adequate disclosures are made pointing to such events which creates such conjectures on the pany to continue as a Going Concern. Here, King & Queen (K & Q) auditor are auditors of Impulse since 2005. They should be aware that there are liquidity problems in the pany. Hence applying ASA 570 and dictated by their duty in Sec 295 (4) of the Corporations Act, K & Q auditor should have done additional audit procedures to check the viability of the Going Concern assumption. These could include points like valuation of inventory,   receivable realisations. This will stamp the fact that if there is a risk of Going concern and whether such facts will be disclosed. Hence they have not done their duty as per audit standards and mon law. As a result, there is a transgression of proper professional skill and standards In a case of Esanda Finance Corp Ltd vs. Peat Marwick Hungerford’s[1], there is a landmark High Court ruling. This has thrown light and made it clear about their view on earlier judgements and revised their mistakes in the past judgements. They have now eliminated the liability of the auditor in a third party liability. In that they have tested the bined facts of Proximity, Reliance and Causation. The case is similar to this case study where Esanda had an economic deprivation when they sanctioned the loan to the pany on the back of the auditor’s report analysis. It satisfied itself whether auditor to be held liable. The courts concluded that there was a mere reporting to the shareholders and not to the financiers. They did not have any clairvoyance that lenders would act based on this report. This is in spite of the fact that they were aware that report did not indicate a true and fair view of financial statements. Since they did not anticipate that the financier will b e using the report, K & Q auditor should have made it clear that the report would be analysed and used verbatim by the lenders and hence a probability of loss could be there; It is stated that Esanda unreasonably depended on the audit report and did not perform diligence themselves to convince of the finances of the borrower The Court held that auditor has not breached duty of care and used the test of Proximity & Causation in their conclusion. Depending on this case, K & Q auditor were not aware that the report would have been used by EFL Finance for lending. The finance pany lent to Impulse by relying on the report and did not conduct an independent diligence. Depending on the case of Proximity, Reliance and Causation, K & Q auditor remained within their limits of duty of care and hence are not liable to EFL Finance b) If Esanda had ab initio mentioned to K & Q auditor that they will use the report for deciding on lending to Impulse, it can be concluded that the test of Proximity and Reliance are maintained. Hence K & Q auditor may exercise reasonable care keeping in mind that one of the intended audiences is EFL Finance who will rely on the audit procedures of K & Q auditor. Hence they need to collect audit evidence and reach a conclusion in their audit report keeping in mind the reader. Even after such mention, if the procedures on inventory and debtors are not done by K & Q auditor, then they have transgressed the precincts of care and their pliance with Proximity, Reliance has failed. As a result, the Causation factor or cause of economic loss has been triggered and accordingly K & Q auditor will be liable to EFL Finance in this scenario 2A) This is defined by APES 110 Code of Ethics for Professional Accountants, Independence prises of: Independence of Mind (Actual Independence) – This expects a mental state which ensures that the auditor acts as an objective and independent person. His opinion will therefore be free from any vested interests and influences. Independence in Appearance (Perceived independence) – Auditor to maintain his image and standard such that any third party will not raise any doubt on his independence and credentials to form an opinion. Independence of the mind or actual independence involves objectivity of the mental condition and mental state and his objectivity to react to specific situations. An auditor who is truly independent has the ability to make non vested decisions in spite of the prejudices. However, since the state of mind where he is perceived to have colluded with the pany and promised his principles is highly volatile, it cannot be objectively benchmarked with respect to time and environment. Therefore, the test of Independence in Appearance or â€Å"Perceived Independence† needs to e upheld wherein he shows the same consistency in behaviour to a knowledgeable person and his client equally. Perceived independence can be measured based on how close the audit member is to the client and he gets any pecuniary benefits for the same. This could also include a dependency test on his economic drive with one client measured to his total revenue. Perceived independence accentuates the credibility of th e report and opinion expressed by the auditor and therefore his opinion is worth the salt. (i) Bob – Principle of Confidentiality is a key point of APES 110 Code of Ethics for Professional Accountants wherein information extracted in a professional engagement is not to be disclosed to any third party without specific authority nor use it for personal benefits provided there is no legal and official reason to reveal. In the instant situation, Bob copied confidential information which was used for his personal benefit of finishing his university assignments though it did not contain the Club Casino name. Even if you remove the name of the client in the assignment, it does not remove the fact that confidentiality was predominantly breached. This being used for vested interest and not professional interest, there is no possibility of cover up with any alternate action. (ii) Wendy – Wendy is a partner in an audit firm. She has been assigned post of pany Secretary (CS) position in the same pany who is her audit client. This triggers Clause 290.142 of APES 110 Code of Ethics for Professional Accountants. Assignment of such staff is pointing to a self review threat which could have been absolved if it was for only a temporary period. But that not is the case, wherein Wendy has been given the post on a permanent basis. Her position is close to the pany triggering self-review and advocacy threats. Hence there is no way the threat can be brought to acceptable level. Per AUST290.148.1, a pany Secretary is an Officer under the Corporations Act. Wendy cannot act as a temporary partner in the client.   The only way is to resign from the audit engagement. (iii) Leo- Leo is a close member of the audit group and his elative prepares the financials and statements in the firm. The opinion to be expressed on such cash flows has a conflict for Leo. The threat therefore can be minimised to Acceptable level if Leo is replaced and he is restricted from working on such assignments where his relative has an influence in making the base documents to be audited. Per APES 110 Code of Ethics for Professional Accountants, it is r mended that Leo to be removed from the audit since his father has a more than significant influence (iv) Chan & Associates – If Chan holds stake, such stake will not create an independence threat if the business relationship is insignificant to Chan, his audit form and the pany where he holds stake. Such stake should also not create an ability to control the pany and it is immaterial to him. But here Chan has 25% equity in the entity which is high and can create two threats namely self interest/intimidation. Per APES 110 Code of Ethics for Professional Accountants, Chan has to relinquish his stake and resign from his audit engagement responsibility of Classic Reproductions. Accounting Professional & Ethical Standards Board, (2008).  APES 110 Code of Ethics for Professional Accountants. Australia. Auasb.gov.au. (2016).  Australian Auditing Standards. [online] Available at: https://www.auasb.gov.au [Accessed 12 Dec. 2016]. Auditing and Assurance Standards Board, (2013).  Auditing Standard ASA 570 Going Concern. Austlii.edu.au. (2016).  ASA 570 - Going Concern - April 2006. [online] Available at: https://www.austlii.edu.au/ [Accessed 12 Dec. 2016]. Cpaaustralia .au. (2016).  Accounting professional and ethical standards. [online] Available at: https://www.cpaaustralia .au [Accessed 12 Dec. 2016]. Nguyen, V. and Rajapakse, P. (2008). An Analysis of the Auditors' Liability to Third Parties in Australia. mon Law World Review

Religion and Ecology Essay Example | Topics and Well Written Essays - 1750 words

Religion and Ecology - Essay Example This book guides its reader through everyday life with an eco-friendly and animal -friendly outlook. It advises its readers on how to raise children in an environmentally sound way of life as well. The application of religion could potentially be applied to this type of lifestyle but the conflict arises in the arena of commitment to God. Particularly in Christianity, one’s devotion to God is of the utmost importance. This means that one should be concerned about one’s spiritual life and the promise of the eternal afterlife more so than the physical realm of this earth and its inhabitants and recourses. In the Old Testament, routine sacrificing of animals was imperative in keeping one’s God happy. This was a ritual that rid an individual of sin and evil deeds, before the eyes of God. Certainly, this made for a good disciple of God but was not an animal friendly approach to life by any means. One of the key aspects to environmentally friendly living, is respecting the creatures that live on this planet. That means humans as well as all animals. Through a religious perspective, God gave Adam and Eve dominion over all of the animals. This is often interpreted by Christians to mean that humans should feel free to eat animals, wear their skin and sacrifice them as burnt offerings if need be. There is a more eco-friendly interpretation of this that states that having dominion over animals just means that humans are to watch out for and care for the animals of the earth. But, as the Bible goes from Old Testament to New Testament, readers of the Bible are told that Jesus was the ult imate sacrifice and that animal sacrifices were no longer necessary. Most Christians though today, will freely eat meat and concern themselves with spirituality as opposed to the physical condition of the earth. The concept of Christianity is ultimately that one

Technological Change and Economic Growth Research Paper

Technological Change and Economic Growth - Research Paper Example Moreover, it is very essential to understand here that technology does not refer only to the information and technology but it signifies the transfer of knowledge, both theoretical and practical knowledge (Amesse & Cohendet, 2001, pp. 1459-1478) that influences the process of development positively and/or negatively. In order to understand the role of technological change in economic growth and broadly, economic development, it is very imperative to understand the definition of the terms itself that will subsequently indicate the role. Particularly, it has been an observation that economic development (Borensztein & Lee, 1995, pp. 115-124) has often been taken only in terms of economic progress of a state; in other words, in terms of its gross domestic production. However, in current era, economic development is more than an increase in GDP and various factors play a role in determining positive or negative economic development of a country. ... Here, one can notice various indicators in this list cannot be analysed quantitatively and therefore, economic development is more than quantitative progress of a country. The World Bank (2013) data confirms strong relationship of technological change with economic growth of countries. Analysis of its findings has indicated that countries that have invested more in technological advancements, especially in the sectors of education and business have been successful in providing basic facilities to its population, which has resulted in their overall economic growth and/or development. In other words, when a government ensures secure and encouraging social environment by working towards increased technological advancements, it automatically results in higher economic growth of the country. This surely is an indication of the role of technological changes that facilitates economic growth of a country. While the paper includes discussion on the role of technological change in economic gro wth of a country, it will be inappropriate to overlook the particular role of multinational enterprises that they play by bringing FDIs especially in developing countries. For many decades, quantitative indicator of economic growth (Victor, 2008, pp. 5-11) has remained an essential requisite for developing countries to transform into modern and developed economies. In the year 1972, Gould (pg. 1) defined economic growth as â€Å"the sustained increase in real per capita incomes.† Here, one can see that economic growth does not consider short-term alterations since it focuses on ‘sustained increase’. In this regard, one cannot overlook the significant role of