Auditing: The Importance of Being Independent
Auditing: The Importance of Being Independent
The importance of being independent (by Deloitte)Discussion QuestionsBackground:
The Deloitte Foundation, in conjunction with the University of Illinois Centerfor Professional Responsibility in Business and Society, has created AuditorIndependence Education Materials to help students to learn about coreconcepts, real-world applications, and prevailing rules related to auditorindependence.
Required:
Please watch the FULL video (3 sections) titled “the Importance of BeingIndependent” which focuses on the public interest, professional skepticism,financial statements users, and independence in fact and appearance.?
“Section 1 – Independence 101” (approx. 12 minutes)?
“Section II – The Public Accounting Profession” (approx. 5 minutes)? “Section III – Independence at Work” (approx. 10 minutes)The video can be found at
https://giesbusiness.illinois.edu/responsibility/student-materials
After watching the video, please respond to the following questions.
1) Your uncle is employed as the controller of Company J, an audit client ofyour firm. You are asked to serve on the Company J audit team. You arepretty sure that the independence rules do not prohibit you from serving onthe audit team because technically your uncle is not a “close relative.”You have a close relationship with your uncle and see him on a regularbasis. Should you disclose this relationship to your firm? Why?
2) What do other professions, such as law or medicine, have in common with theaccounting profession?
3) All professionals in public accounting firms, whether they provide audit,tax, or consulting services, should comply with the accounting firm’sindependence policies and applicable independence rules. Why do you thinkthis is?
4) Do you consider any of the “five areas of independence,” described in theVideo, a greater threat to independence than any of the other areas? Why?
Formatting:
Your response should not exceed 2 single spacedpages.
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