O Since Bob is the son, there might also be an intimidation threat from the father who might force Bob to overlook things O A self-interest threat, since it is in Bob’s interests to protect his direct family O A familiarity threat to his independence, since Bob may overlook errors / fraud due to the close family relationship Since Bob’s father is the major shareholder of ABC, this can create the following threats:.If Bob takes on the role of Auditor for ABC (Pty) Ltd, he will be compromising the fundamental principle of objectivity in terms of the Code of Professional Conduct.Let’s take the same solution, and break it apart into separate points, so the examiner doesn’t have to try figure out how many thoughts you have in there! O Question is… will the examiner be able to tell exactly how many thoughts you squeezed in there?! BUT there is more than one thought in that point, right?.If we think of the “one thought, one point, one mark” principle, this is a lot of writing for one mark! What do you think of the solution? What does the examiner think? According to the Code of Professional Conduct, Bob shouldn’t take on the role of statutory auditor This family relationship is to close for him to be independent and there is no safeguard available that can reduce the threat to an acceptable level. As the father, there may also be an intimidation threat. Bob may overlook fraud and error due to a familiarity threat because of the close family relationship and possibly even self-interest threat to him because the major shareholder is his father and it would be in his interests to protect direct family. If Bob takes on the role of Auditor for ABC (Pty) Ltd, he will be compromising the fundamental principle of objectivity in terms of the Code of Professional Conduct. The major shareholder of ABC is Dan, who is Bob’s father.ĭiscuss the above situation in terms of the Code of Professional Conduct Here’s an example to illustrate the above.Īs an audit partner, Bob has been asked to perform the role of statutory auditor for ABC (Pty) Ltd. The examiner will easily overlook the fact that there is more than one thought in your point, and only give you one mark, where you might have two valid points… ONE THOUGHT, ONE POINT, ONE MARK. On the same topic… be careful that your sentence or point doesn’t have more than one thought in it. Keep in mind that you’ll only get one mark, so don’t waffle! As a rule of thumb… don’t let your point run over four lines long. ![]() If it takes you one paragraph to communicate your point… that’s STILL only one mark! With the time restraints you have in the exam, being able to communicate briefly (NOT abbreviated!) is essential. ![]() If you can communicate your point in one sentence, that’s one mark. Get used to thinking of every point as only one mark. This means that your presentation of the information can affect the marks you get. As much as you may not like to hear this, your communication and language skills are very important in Auditing. You’ve worked through the theory, you’re working on perfecting your knowledge, now you need to give some thought to how you’ll present the information in the exam.įirstly, remember that Auditing is a communication subject.
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