Lakeside Company Intro Case
1094 words 5 pagesDiscussion
What are the main duties of each of the positions that comprise Abernethy and Chapman’s engagement team?
Abernethy and Chapman’s engagement team comprises of a partner-in-charge, a manager, a senior auditor, and one or more staff auditors. The partner-in-charge leads the engagement team and is responsible for all final decisions made while conducting the audit. The manager, senior auditor, and staff auditors are to perform the actual audit examination. The engagement team’s responsibility is to complete the audit with competency and objectivity.
What is the purpose of having both a partner-in-charge and a consulting partner on each audit engagement? Should the partners be rotated periodically? Why or why not?
The …show more content…
Are there any potential problems with these movements within the firm?
While it’s important for staff to be able to multi-task and cross-train in other areas, moving individual staff around during an audit could create an impression that there is a lack of control. When auditors are shifted around, clients could lose confidence in the auditor’s competence. “Auditing should be done by a competent, independent person.” (Arens, 2014, pg.4)
Quality Control Standards
I was asked to review the quality control standards of Abernethy and Chapman as to whether or not the firm met the standards in accordance with the AICPA’s Standard of Quality Control Standards No. 7, A Firm’s System of Quality Control. Any recommendations or improvements that I deem necessary have been included in the following memo to Ms. Mallott.
The Impact of Sarbanes-Oxley
The case states that the firm of Abernethy and Chapman is considering the acceptance of clients that are publicly traded. What specific steps would the firm have to take before they could accept an audit client that is publicly traded?
The Public Company Accounting Oversight Board (PCAOB) was created to oversee the audits of publicly traded companies. In order for a firm to accept a client whom is publicly traded, the firm must register with the PCAOB. The application for registration is to be completed electronically, and