Auditor Independence

下面为大家整理一篇优秀的assignment代写范文- Auditor Independence，供大家参考学习，这篇论文讨论了审计师的独立性。审计师的独立性可以防止在提供认证服务时可能出现的损害客观性的关系。正如AICPA所提到的，保持目标是一种精神状态，为了不受任何评判，与被审计公司日常运营的实际分离是至关重要的。审计和认证成员在公共实践中不仅保持客观性，而且在事实和外观上保持独立性，不像所有其他服务，成员必须保持客观性，避免任何利益冲突。

Review The AICPA Code of Professional Conduct. Why is an auditor’s independence so essential? How does the Chartered Professional Accountant’s need for independence differ from that of other professions? Provide two examples from current events where independence was an issue in an audit of a public company.

In your response posts, discuss how the auditor’s independence, or lack thereof, contributed to the outcome of the audit in the examples provided by your peers.

Support your initial post and response posts with scholarly sources cited in APA style.

Refer to the Discussion Rubric for directions on completing these discussions.

An auditor’s independence prevents relationships that may appear to impair the objectivity in rendering attestation services (AICPA, 2013). As mentioned by the AICPA, remaining objective is a state of mind and in order to remain free of any judgement, physical separation from the audited company’s day to day operations is crucial. Auditing and attestation members in public practice maintain not only objectivity, but also independence in fact and appearance, unlike all other services where the member must maintain objectivity and avoid any conflict of interest (AICPA, 2013).

In 2015, Toshiba was faced with a $1.2 Billion scandal in overstated operating profits (Carpenter, 2015). In the case, an independent investigative panel released a reporting describing how improper accounting practices had been taking place within Toshiba for the past seven years (Carpenter, 2015). It was mentioned that the CEO did not directly request to cook the books, but placed an immensely amount of pressure on its employees to produce the results they wanted (Carpenter, 2015). Poor internal controls within finance, auditing and the risk management divisions led to the continued fraudulent accounting practices (Carpenter, 2015). The activities were uncovered when the SEC requested a report order in February of 2015, in late March the company’s internal Special Investigation Committee identified irregularities within their percentage of completion method for certain infrastructure projects (Toshiba, 2015). Upon this discovery, the investigation was turned over to an independent committee comprising of fair and impartial outside experts with no interests in the company to review several different accounting practice areas across different divisions of the business (Toshiba, 2015). The company commenced to make immediate corrections to the financial statements in September of 2015 for FY2009 – FY2013 (Toshiba, 2015).

Groupon, an online discount company was caught in an accounting scandal in 2011. Soon after it went public with the SEC, the company reported fourth quarter revisions to its earnings as it disclosed material weaknesses within its internal controls, however this was the first public report out, so there were no real earnings prior to the company going public (Mckenna, 2012). However, Ernst & Young signed the fourth clean audit opinion when signing Groupon’s annual report and if they were aware of any weaknesses, they were not serious enough to qualify in the audit opinion (Mckenna, 2012). The PCAOB imposed a $1.2 million fine against Ernst & Young for failure to properly review Medici’s, another company, like Groupon’s issue (Mckenna, 2012). Medici’s management team estimated returns and made reserves based on the cost of replacing its product versus the gross sale price (Mckenna, 2012). According to the PCAOB, E&Y should have known that this practice was not supported (Mckenna, 2012).

References

AICPA. (2013, June 1). Code of professional conduct. Retrieved from AICPA website: http://www.aicpa.org/research/standards/codeofconduct/downloadabledocuments/2013june1codeofprofessionalconduct.pdf

Carpenter, W. J. (2015, August 13). Toshiba's accounting scandal: How it happened. Retrieved from Investopedia.com website: http://www.investopedia.com/articles/investing/081315/toshibas-accounting-scandal-how-it-happened.asp

Mckenna, F. (2012, April 9). Groupon: Where were the auditors? Retrieved from Forbes website: http://www.forbes.com/sites/francinemckenna/2012/04/09/groupon-where-were-the-auditors/#6c0c49d91e1a

Toshiba. (2015, March 31). 2015 Annual report. Retrieved from Toshiba website: http://www.toshiba.co.jp/about/ir/en/finance/ar/ar2015/tar2015e_or.pdf

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