AUD 610 QUESTION 13 & 14

MEMBERS: Nur Asmah Bt. Ismail Fatimah Bt. Johari Farina Bt.Abd. Malik Siti Nur Atiqah Azhari

QUESTION 12 A(APRIL 2007,Q1)

a 1.Not violated because the discount can be consider as a small gift that not affected their opinion unless the discount he got is too much, ) it can be violated. 2.Not violated because she is the secretary of CEO not the company secretary of the company. 3.If he accept the gifts, it will be violated because the amount of gifts that he got is the big amount of cash money that can give effect to their opinion.

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QUESTION 12 A (APRIL 2007,Q1)

b Have a limitation relationship with clients )

Avoid personal meeting after working hours Avoid to receive any gift, special hospitability from clients

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QUESTION 12 B
Q: Auditors are required to comply with the MIA ByLaws on confidentiality pertaining to client's information. However, there are circumstances that will allow the disclosure of clients confidential information.

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1.Consent granted from the clients

1.Legal right or duty to disclose 1.Under obligation of court order

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Q.13 (A) (OCT07)

i) No Violation
Request made is likely to bring the convenience and possibly bring the cost-effective of the audit. When the auditors are familiar with the business nature are more likely to work efficiently than new auditors. Senior in-charge must give adequately brief abt the co. and job specification during the job

ii) Violate by law competency and due care The audit firm should undertake necessary action to evaluate the work of trainee. Senior in-charge should give task that he is capable to do. Supervise during audit field work His work being reviewed by person at higher level such as partner incharge. iii) No violation En. Kamarul made loan with the bank and not with the clients co. The amount of the loan is immaterial to the firm and to the client. Exception: loan or guarantee by bank & financial inst is considered acceptable as the load is made under normal lending procedure.

QUESTION 13 (B)
Q: Under section 10 (a) of the Accountants Act 1965, MIA is empowered to establish By-Law for the indoctrination of sound professional practice and the prevention of illegal and dishonourable practices of the profession. These By-Laws provide the principles and ethical rules of the members to follow in undertaking their professional work.

(i) Explain the meaning of advertising, publicity and solicitation as set out in the MIA By-Law.
Advertising
o The communication to the public of facts about a professional account with a view of procuring profession business.

Publicity
o The communication to the public of facts about a professional accountant.

Solicitation
o Various means that accounting firm use to engage new clients other than accepting new clients that approach the firm.

ii) Provide two (2) examples of acts that are considered discreditable to the profession under the MIA By-Law.

Sell client's information to their competitor.(BLPE 140 Confidentiality) Accepted expensive present such as car from client. (BLPE 110 Integrity & 120 Objectivity)

QUESTION 14 (A)

Q: An auditor must be independent of the audit client in order to act professionally. The conceptual approach to independence requires that there is independence in fact and in appearance.

(a) Explain the meaning of independence in fact and in appearance.

1. Independence in fact/in mind
The auditor will be able to maintain unbiased attitude throughout the audit.

2.

Independence in appearance

It means how the auditor appeared to the outsiders of financial statement or in the eyes of shareholders.

QUESTION 14 (B)
a)Violation the MIA By-Laws Threat to independence (self-review threat). Johan cannot provide audit,tax,management advisory and accounting for the same private company clients. b)Violation the MIA By-Laws BLPE 240 : General prof. fees charged shall be a fair reflection of the value of the work performed for the client.

Fees would depends on skill and knowledge, level of training and experience, time taken by each audit staff to finish the audit, degree of responsibility and work urgency.

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c)Not violation the MIA By-Laws No conflict of interest, not a familiarity threat. Ahmad is an audit partner of Ali, Ahmad & Co while his son is a fresh graduate in Civil Engineering from UiTM which is employee of audit client. d)Violation the MIA By-Laws

BLPE 110 Integrity & 120 Objectivity. Members shall at all time be straightforward, honest & sincere. Must be objectivity : fairness, honesty & free of conflict of interest. Involves pressures exerted on them ( must performed the field work within 2 weeks and worked until midnight toward the end of the audit). BLPE 260 : Gift & hospitality : Audit clients staff paid for evening meals so that the audit team could work with minimum disruption and can complete within the time frame.

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