Accounting Auditing

[Name of the Institute]

Accounting Auditing

Introduction

The following paper is about the standards of accounting. There are four scenarios that are discussed in the paper, each situation is related to the accounting, ethical and auditing standard. This paper also discusses about various sections and various ethical auditing standards.

Discussion

Question # 1

Situation

As the Rodney was working in the auditing department of Daffey Jones Ltd, as was also studying and was completing the Master of Accounting, he was working as internal auditor of the firm who was a major retailer. As he was working in the department of auditing he must have came across certain financial standards or the financial statements of the Daffey Jones Ltd in order to asset the Daffey Jones in completing of auditing assignments in which he was working currently therefore he has copied the information of financial statements in the assignment though he was careful in eliminating the name of Daffey Jones for the preservation of confidentiality.

Answer.

Professional Secrecy

According to ethical auditing standard an auditor requires the professional secrecy. An auditor is not allowed to reveal or disclose the financial statement of an organization. Rodney has breached an auditing standard because he was not allowed to disclose or reveal the confidential client information or the financial statement that is being obtained during an audit to outsiders. However he has not given him the name of Daffey Jones Ltd in the assignment but he has breached the ethical standard for auditing. Even an auditor has to sign an agreement when taking the reviews of two companies that are engaged in same activities with either client in order to keep the information of the cooperate secret. An ethical code contains the internal as well as external audit functions (Bartov, E., Goldberg, 2005).

However the both categories follows the same rules, CPA, certified public accountant that should put up with some additional rules such as those approved by the American institute of American Institute of Certified Public Accountants (AICPA) the SEC, securities commission exchange and PCAOB, public company accounting oversight board. Therefore the rules of internal auditor must be complied by the internal auditor. Though the Rodney didn't take the name of the firm Daffey Jones Ltd or preserved the confidentiality of the client but he has breached the ethical standard for auditing of professional secrecy. He was not allowed to use or reveal the financial statements of the firm at any cost. But for the sake of the completion of the assignment he has used the financial statements and completed the assignment therefore he has breached the ethical standard of auditing.

The internal financial statements are just used by an auditor for the advice not for the completion of his own work, however as he didn't take the name of the firm, but he should not use the financial statements of the firm Daffey Jones for his completion of the assignment.

Question #2

Situation

Bertha Bigga was engaged in the auditing department in Wait Alert Limited WA for many years, also the secretary who was ...