Assignment Content Instructions: Please refer to the following before writing your answers: Your work should be in a clear font (Arial, Calibri, or Times New Roman) with a 12-font size

Assignment Content

Instructions:

Please refer to the following before writing your answers:

Your work should be in a clear font (Arial, Calibri, or Times New Roman) with a 12-font size. Use double spacing and 1-inch margins. You are required to provide proper citations in the text and include a references page at the end. (You may use APA or Harvard style for referencing). Check for plagiarism (SafeAssign) before you submit your work.

Case one:

N & N Chartered Professional Accountants is a Toronto based audit firm owned by four partners. Assume you are one of the partners at N & N Chartered Professional Accountants (audit firm), and you are dealing with various situations in relation to your firm’s audit clients.

You are about to sign engagement letters with the following clients for the audit of financial statements. 

Situation 1 – YYY Ltd. Your firm has recently completed the project of designing & implementation of accounting & bookkeeping system for your client YYY ltd.

Situation 2 – AAA Ltd. The chief accountant of AAA ltd (one of your clients) has tested positive for COVID. As a result, he will be unable to come to the office or even work remotely for the next couple weeks. The financial yearend is approaching in a couple of days. The CEO of AAA ltd has asked you if the senior auditor in the audit team can help him calculate the corporation tax and file the tax return.

Required:

For each situation, explain:

a) The ethical threats to auditors' independence in general and specifically in context of these situations. (Marks - 15)

b) The necessary safeguards which you think should be in place (by assuming your firm wanted to continue with these clients, initially). (Marks - 15)

Case two:

Audit trainee. You have recently enrolled an audit trainee in your audit firm, and she has some confusion about “Principles underlying the Financial statements Audit”.

Required: Explain “Principles underlying the Financial statements Audit” in detail. Use simple examples to help her understand, as this is very important part of her professional training and audit assignments. (Marks – 30)