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the CPA journal (auditing) - Essay Example
Finance & Accounting
Pages 3 (753 words)
Date CPA journal The latest journal talks about the audit fees that are charged by the big four audit firms and the other audit firms that are not included in the big four. The journal also insists on the IAS 5 that deals with the remuneration of auditors…
Quality in auditing is measured by the ability of an auditor to give an opinion that is fair and true. A fair and true opinion is usually beneficial to the stakeholders of the company because they are able to make sound decisions about a company as a result of the audit information given. That is a good thing to the company because a company would add on its credibility as a result of the information that is given in the audit report. The problem that is addressed in the journal is the issue of an audit firm receiving more that 10% of their income from a single client. That problem is not acceptable in the auditing world. This is to avoid some problems that may be associated with the issue. If an audit firm receives more that 10% of its income from a single audit firm, there would a case of prejudice or favoritism in the practice in the work area. That means that the large client may threaten to pull out of the customer list of the company if a certain thing is not done. That would jeopardize with the normal working of the company and that should be avoided so as to ensure that there are fair views in auditing. The journal states that the audit firms should avoid the overreliance on a single client because that would not be ethical. That can be done by the audit firms charging a standard fee that would be applied across all customers so as to maintain equality. ...
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