Auditing 530
Case Study 5-4
Audit Client Considerations
The Ethics Environment ACCT 530
Week 5
Date: October 5, 2013
Audit Client Considerations
With this particular case study I will discuss several questions and facts regarding audit client considerations. 1) A brief summary of the case. 2) Identify key behaviors, attitudes and ethical dilemmas (if any) faced by the auditors. 3) Assess the philosophical and practical alternatives summarized in the case questions and evaluations of those solutions. 4) Briefly summarize what I would do faced with this situation in real life.
The case is that of a CPA firm, Cardinal & Coyote, located in Phoenix, Arizona and centers around three personnel members. Yancy Corliss is a new partner with the firm that is summoned into the managing partner’s office, Sharon Rules. Rules indicates that Jost Furniture is looking for a new auditing and she has been approached to submit a bid. Before committing to a bid Rules would like Corliss to conduct a background check to assess the potential risk of obtaining Jost as a client. The contract could prove to be quite lucrative for the firm as the company will need advice on international expansion. Since the bid is due to close fairly quickly she gives Corliss three days to report back to her.
Corliss assembles his team which includes Lanny Beaudean who worked for the IRS for two years before joining the firm. Beaudean hopes to gain international experience with the firm so as to further his dream of becoming a CEO. The other two members of the team are Vinnie Gabelli and Jacki Oloff both of whom are not Arizona natives. After discussing their respective duties the team met at the end of the day to discuss their findings. After following a checklist of risk assessment they followed all except for the Verify the circumstances of any prior auditor’s dismissal1. The team felt that Yancy Corliss would be better suited to obtain this information. After non response from the firm’s
Audit Client Considerations
The Ethics Environment ACCT 530
Week 5
Date: October 5, 2013
Audit Client Considerations
With this particular case study I will discuss several questions and facts regarding audit client considerations. 1) A brief summary of the case. 2) Identify key behaviors, attitudes and ethical dilemmas (if any) faced by the auditors. 3) Assess the philosophical and practical alternatives summarized in the case questions and evaluations of those solutions. 4) Briefly summarize what I would do faced with this situation in real life.
The case is that of a CPA firm, Cardinal & Coyote, located in Phoenix, Arizona and centers around three personnel members. Yancy Corliss is a new partner with the firm that is summoned into the managing partner’s office, Sharon Rules. Rules indicates that Jost Furniture is looking for a new auditing and she has been approached to submit a bid. Before committing to a bid Rules would like Corliss to conduct a background check to assess the potential risk of obtaining Jost as a client. The contract could prove to be quite lucrative for the firm as the company will need advice on international expansion. Since the bid is due to close fairly quickly she gives Corliss three days to report back to her.
Corliss assembles his team which includes Lanny Beaudean who worked for the IRS for two years before joining the firm. Beaudean hopes to gain international experience with the firm so as to further his dream of becoming a CEO. The other two members of the team are Vinnie Gabelli and Jacki Oloff both of whom are not Arizona natives. After discussing their respective duties the team met at the end of the day to discuss their findings. After following a checklist of risk assessment they followed all except for the Verify the circumstances of any prior auditor’s dismissal1. The team felt that Yancy Corliss would be better suited to obtain this information. After non response from the firm’s
References: 1. Ethical Obligations and Decision in Accounting Shawn M. Mintz and Roselyn E. Morris page 248 2. http://pcaobus.org/Standards/Auditing/Pages/AU150.aspx 3. http://www.aicpa.org/Research/Standards/CodeofConduct/Pages/default.aspx 4. http://www.the-cma.org.uk/Code-of-Ethics/