UNIVERSITI TUNKU ABDUL RAHMAN
Faculty of Accountancy and Management
Bachelor of Accounting (Hons)
UKAF 2124 Auditing and Assurance Services II (May 2011, Y3S1)
Lecturer/Tutor: Mr. Vincent Tung
Lee Choon Keat
Lim Eng Hui
Pang Suk Min
Soo Sze Mun
Tan Wei Ling
Assessment Criteria Marks
Clarity and Language 5 %
References and evidence of research 5 %
Contents of the report 90%
Question 1: Following his resignation, MedTrans' former CFO met Gordon Johns, the Deloitte audit engagement partner. Did the CFO have a responsibility to inform Johns of the errors in MedTrans' 1992 financial statements? Justify your answers.
In this case, the CFO has the ethical responsibilities to inform Johns all the errors he finds out in the financial statements of MedTrans' 1992.
The Chief Financial Officer (CFO) is a corporate officer who primarily responsible for managing the financial risks of the company, financial planning and record-keeping, as well as the financial reporting to higher management. The company's management, such as CEO or CFO, has the primary responsibilities for the financial statement and has to indicate to the auditors and audit committee once they found any error or misstatement in the audit report. They should know the auditor's responsibility is to express his opinion and make any materiality judgments on the audit report. Nowadays, most CFOs of large companies have finance qualifications likes accounting background and a finance department would usually have some accountants with Certified Public Accountant.
According to IFAC Code and MIA By-laws, there are 5 fundamental principles of professional ethics which characterize the expected qualities of a profession. The 5 fundamental principles are as following:
Integrity (Section 110 of...