问题详情

YouareaseniormanagerinBunk&Co,aglobalauditfirmwithofficesinmorethan30countries.Youareresponsibleformonitoringauditqualityandethicalsituationswhichariseinrelationtoauditclients.WireCoisanauditclientwhoseoperationsinvolvehaulageanddistribution.TheauditreportforthefinancialstatementsofWireCofortheyearended31December2014wasissuedlastweek.Youareconductingareviewofthequalityofthataudit,andofanyethicalissueswhicharoseinrelationtoit.RelevantinformationobtainedfromadiscussionwithLesterFreeman,theauditengagementpartner,isgivenbelow.
(a)WireCo’sauditcommitteerefusedtoagreetoanincreaseinauditfeesdespitethecompany’soperationsexpandingintonewlocations.Inresponsetothis,thematerialitylevelwasincreasedduringtheaudit,andsomereviewprocedureswerenotcarriedout.Toreducesamplesizesusedintestsofdetail,thesampleswereselectedbasedonjudgementratherthanstatisticalmethods.Inaddition,onlypartsofthepopulationbeingtestedweresampled,forexample,certainlocationswerenotincludedinthesampleofnon-currentassetsselectedforphysicalverification.(6marks)
(b)SomeoftheauditworkwasperformedbyanoverseasofficeofBunk&Coinan‘off-shoring’arrangement.ThispracticeisencouragedbyBunk&Co,whosemanagingpartnersseeitasawayofimprovingauditefficiency.Theoverseasofficeperformstheworkatalowercost,anditwaslargelylow-risk,non-judgementalworkincludedinthisarrangementfortheauditofWireCo,forexample,numericalchecksondocumentation.Inaddition,theoverseasofficereadtheminutesofboardmeetingstoidentifyissuesrelevanttotheaudit.(5marks)
(c)InJuly2014,RussellBell,WireCo’sformerfinancedirector,joinedBunk&Coasanauditpartner,workinginthesameofficeasLesterFreeman.AlthoughRussellwasnotamemberoftheauditteam,hedidupdateLesteronsomebusinessdevelopmentswhichhadtakenplaceatthecompanyduringtheperiodbeforeheleft.RussellheldanumberofequitysharesinWireCo,whichhesoldinJanuary2015.SincejoiningBunk&Co,Russellhasbeendevelopinginitiativestoincreasethefirm’sincome.Oneinitiativeisthatauditteammembersshouldbeencouragedtocross-sellnon-auditservicesandreferencestotargetsforthecross-sellingofnon-auditservicestoauditclientsisnowincludedinpartnerandemployeeappraisaldocumentation.(9marks)
Required:
Commentonthequalitycontrol,ethicalandprofessionalissuesraisedinrespectoftheauditofWireCoandthefirm-widepoliciesofBunk&Co,andrecommendanyactionstobetakenbytheauditfirm.
Note:Thesplitofthemarkallocationisshownagainsteachoftheissuesabove.


请帮忙给出正确答案和分析，谢谢！