Auditing Process and Procedures for Smackey's Dog Food Inc.

Auditing Process and Procedures for Smackey
Masters
Term Paper
Finance & Accounting
Pages 3 (753 words)
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SEC influence over the Smackey Dogs food Inc. relate to issues of independence roles for the audit team. The audit standards is one of the influences to be observed, that have to be followed in establishing the independence of auditing team involved in the audit of Smackey. …

Introduction

SEC influence over the Smackey Dogs food Inc. relate to issues of independence roles for the audit team. The audit standards is one of the influences to be observed, that have to be followed in establishing the independence of auditing team involved in the audit of Smackey. The relationship between the owner’s (Kim) husband and the audit manager Pete is going to influence the disclosure and materiality of the audit contents. The fact that there is a relationship between the bank the loan is being sort and Alan, Kim’s Husband depicts a loan relationship. SEC requires ethical principles to be observed by auditors. Independence is one of the six ethical principles of the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct. The other principles are responsibilities, the public interest, integrity, objectivity and independence, due care, and scope and nature of services. Section 303 of the SEC prohibits officers or directors of a company from manipulating, misleading, coercing or acting fraudulently towards the audit team in a manner to influence the auditor to issues financial information, knowingly or not, that the act could lead to rendering the audit immaterial. In this case, Alan obtains information from the audit manager during beers that will be shared with Kim, the owner and further Sarah who is seeking the loan. This is an issue that ought to be addressed as the result will be an adverse opinion. The underlying issues of Ben’s relationship with the bookkeeper Anita could be controversial in the resulting audit opinion. ...
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