The paper “ International Auditing and Assurance Standards” is a fascinating example of a case study on finance & accounting. As an audit review partner, APES 110 Code of Ethics for Professional Accountants defines Mr. Mitchel Barnes, who has been recently appointed as a Technical Director of Acres & Allen Chartered Accountants, as a person who in the firm reviews the conduct of audit engagements and performances. In addition, the Technical Director reviews auditors reports issued on behalf of the firm and has the appropriate right to, where required, from a legal, professional or regulatory body to do so all as his/ her responsibilities (APESB, 2006, pg.
84 ). Potential threats to Independence in AACAThe potential threats that can result due to the engagement manager’ s wife, Mrs. Megan Acret purchasing shares in the company are as follows. There would be the threat of advocacy which according to the code of ethics for the professional accounts, is brought about by one prompting shares in a listed entity when that entity is a financial statement audit client. There would also be the threat of familiarity, which also according to the code of ethics for the professional accountants is as a result of, “ an associate of the engagement team having a close or immediate kin relationship with the office of the client, or with an employee of the client who is in the position to exert direct or significant influence over the subject matter of the engagement.
Such significant influences may be in respect to influencing business decisions and obtaining benefits from such a company” (APESB, 2006, pg. 6 and pg. 74-75). The threat of self-interest is also likely to occur, which according to the code of Ethics of Professional Accountants is due to a firm, member of the assurance team, or a close associate the firm member(s) benefiting from a financial concern such as profits, loans, guarantees.
Besides, personal interest may pose threats when a firm inappropriately uses its personal corporate assets or looks on forward to get arranged incentive compensations. Intimidation as a threat may also occur. According to the code of Ethics of Professional
Accounting Professional & Ethical Standards Board. 2006. “APES 110 Codes of Ethics for Professional Accountants”. [online] Accessed 21st August 2012. Available at http://www.ceo.wa.edu.au/home/carey.peter/Accounting_and_Finance/APES_110.pdf
Bottomley, S... Part I. Approaches to the critique of auditing. Bottomley, S. Accessed 21st August 2012. Available at http://epress.anu.edu.au/wp-
Esanda Finance Corporation Limited v Peat Marwick Hungerfords (Reg) HIGH COURT OF AUSTRALIA. 2012. Accessed 21st August 2012. Available at http://think.io/pub/Law%20Notes/Torts/Esanda%20Finance.txt
International Auditing and Assurance Standards Board (IAASB). 31st July 2012. The Clarified Standards. IAASB, online. Accessed 21st August 2012. Available at http://www.ifac.org/auditing-assurance/clarity-center/clarified-standards
Leung, P, Coram, P, Cooper B.J. & Richardson, P, 2011, Moder Auditing And Assurance Services,5th Ed, Jhon Wiley And Sons Australia, Milton, Qld