NOTE:Completing Application Activitiesrequires students to reference additional
ID: 397566 • Letter: N
Question
NOTE:Completing Application Activitiesrequires students to reference additional resources and materials. Obtain a copy of the PCAOB's enforcement Release No. 105-2017-028 (May 24, 2017), with respect to the matter of W.T. Uniack CPA and the audit of Bravo Multinational incorporated. To find it, go to the PCAOB website, look under "Enforcement" and "Settled Disciplinary Orders." 1. While we often think of client management as committing fraud, is it possible that auditors commit fraud by neglecting their professional duties? 2. How did William Uniack, CPA, neglect his professional duties? 3. Auditing firms heavily rely on their reputation to attract clients. Why might Bravo Multinational Incorporated have sought to purchase the auditing services of W.T. Uniack CPA? What does it mean to perform a "sham audit"?Explanation / Answer
1 Yes true. There are some proved examples wherein the auditors don’t obey their professional ethics and standards and they showed the neglect behaviour towards their duties.
2 This audit firm skipped to follow the standards mentioned in accounting standards 7 and under PCAOB rules and norms. They failed to observe engagement quality review as required under auditing standard 7. They contribute to the violations. They even failed to show the prove of the audit or the evidence they based their opinions on.
3 They have conducted the audit in the way to save as much tax as possible. Their opinions were base less and they didn't have sufficient proof on what basis they conducted their audit. Sham audit refers to the audit and accounting which is made to save and hide the tax which is to paid in actuals.
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