Exam (elaborations)
AUE2601-S2-2024-ASSESSMENT 1
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AUE2601-S2-2024-ASSESSMENT 1
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Started on Wednesday, 21 August 2024, 11:41 AMState Finished
Completed on Wednesday, 21 August 2024, 12:26 PM
Time taken 45 mins
Grade 30.00 out of 30.00 (100%)
Question 1
Correct
Mark 2.00 out of 2.00
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Question text
After two months of waiting for confirmation of amounts owing to a
supplier, Sally (a candidate auditor) could not verify the amount
payable. However, she concluded on the working paper that the audit
procedures were adequately performed.
Which of the following statements is/are correct in terms of the
SAICA Code of Professional Conduct? Note that there could be more
than one correct statement.
a.
Sally did not act with professional competence and due care as she
did not act in accordance with the technical and professional
standards
b.
Sally did not comply with the principle of professional behaviour as
she discredited the profession
c.
Sally breached the principle of objectivity for failing to carry out
important audit work.
,d.
Sally did not act with integrity because she failed to confirm whether
the company’s liability was accurately recorded, and she was
dishonest in the conclusion of the working paper
Feedback
Your answer is correct.
You have correctly selected 3.
References
· SAICA Code of Professional Conduct, sections 110-115,
included in the SAICA student handbook Volume 2A, Volume 2B.
· Auditing notes for South African students (2021): 2/4–2/8
The fundamental principle of objectivity as described in this scenario
is incorrect. The fundamental principle of objectivity entails not
allowing bias, conflict of interest or undue influence of others to
override your professional or business judgements. This means that
you have to be impartial and independent at all times. In this case,
the principle of objectivity has not been threatened.
In this case, Sally was required to maintain her professional
knowledge and work diligently in accordance with the technical and
professional standards. By concluding that she received the
confirmation of the amount owing to the supplier, she failed to
perform her duty with competence.
The principle of professional behaviour required Sally to comply with
laws and regulations and to avoid actions that would discredit the
profession. The client trusts that Sally performed her duties by virtue
of being an auditor. By not performing her duties with professional
competence, Sally brought the profession into disrepute.
The principle of integrity required Sally to be honest and
straightforward. She was dishonest by concluding in her working
paper that she had verified the amount owing to the supplier when
she had not in fact received the confirmation. Therefore, Sally did not
act with integrity.
, The correct answers are:
Sally did not act with professional competence and due care as she
did not act in accordance with the technical and professional
standards,
Sally did not comply with the principle of professional behaviour as
she discredited the profession,
Sally did not act with integrity because she failed to confirm whether
the company’s liability was accurately recorded, and she was
dishonest in the conclusion of the working paper
Question 2
Correct
Mark 2.00 out of 2.00
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Question text
Which option correctly explains what the stakeholder
theory represents?
a.
It represents the relationship between the owners and the directors
where conflict of interest arises as the directors who control the entity
may not necessarily have the best interest of the owners at heart.
b.
An entity is expected to have moral values and social
responsibilities as its activities influence all its stakeholders.
c.
For an entity to continue to exist, it must exist in harmony with its
stakeholders.
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