Rules of conduct for professional accountants

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Reference no: EM131466372 , Length: word count:700

Scenario or Tasks

Madam had great expectations about her future as she sat at her graduation ceremony in May 2015. She was about to receive her Master of Accountancy degree, and the following week she would begin her career on the audit staff of Green. Thresher & Co., a public accounting firm. Things looked a little different to Mariam in February 2016 She was working on the audit of Daffah Fabrics Ltd., a textile manufacturer with a calendar year end. The pressure was enormous. Everyone on the audit team was putting in 70-hour weeks, and it still looked as if the audit would not be done on time. Madam was doing work in the property area, vouching additions for the year. The audit program indicated that a sample of all items over OMR 4,000 should be selected. plus a non-statistical sample of smaller items When Mariam went to take the sample. Abdullah, the senior, had left the client's office and could not answer her questions about the appropriate size of the judgmental sample. Mariam forged ahead and selected 50 smaller items on her own judgment. Her basis for doing this was that there were about 250 such items, so 50 was a reasonably good proportion of such additions. Mariam audited the additions with the following results: The items over OMR 4.000 contained no errors; however. the 50 small items contained a large number of errors. In fact. when Mariam projected them to all such additions. the amount seemed quite significant. A couple of days later, Abdullah returned to the client's office.

Mariam brought her work to Abdullah in order to inform him of the problems she found. and got the following response: "My God. Mariam. why did you do this? You were supposed to look only at the items over OMR 4,000, plus 5 or 10 little ones You've wasted a whole day on that work. and we can't afford to spend any more time on it. I want you to throw away the schedules where you tested the last 40 small items and forget you ever did them.' When Mariam asked about the possible audit adjustment regarding the small items, none of which arose from the first 10 items. Abduliah responded. `Don't worry, it's not material anyway. You just forget it; it's my concern, not yours."

(Ref Auditing - Art and Science of Assurance Engagements, 111" Canadian Edition - Professional Relationships: The Role of Ethics and Independence)

REQUIRED

1 Explain how Certified Public Accountants are different from other professionals and examine the role of a code of professional conduct in encouraging CPAs ethical behaviour. (Word limit 150 -200)

2. In what way is this an ethical dilemma for Mariam? (word limit 75 - 100)

3. Use the five-step Giving Voice to Values approach to resolve the ethical dilemma.

4. Discuss whether the facts in above case indicate violations of the rules of conduct for professional accountants. If so. identify the nature of the violation(s).

Requirements

You have the option of forming your own groups. However, the group size members should not exceed four members.

Reference no: EM131466372

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