lisa recent article on ethics

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    kay12
    Participant
    • Topics: 3
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    Please read the following paragraph included in her article:
    Gifts and hospitality
    A client’s offer of gifts or hospitality to a member of the audit team can give
    rise to a self-interest threat to objectivity because the offer may sway the
    judgment of the auditor in favour of the client. In evaluating the significance of
    this type of threat matters such as the nature and monetary value of the gift or
    hospitality to both the client and the auditor, and the intention of the offer
    should be considered. For example, large value gifts will not represent a more
    significant threat than say a client buying lunch for a member of the audit
    team during the audit.

    I thought large values gifts represents more significant threat than buying lunch (as they are less significant) for a member of the audit team during the audit.

    Please explain thanks


    avatar
    AQ!
    Participant
    • Topics: 13
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    Yes ideally lunch is accepted as insignificant courtesy and doesn’t give rise to threat….


    Avatar of MikeLittle
    MikeLittle
    Keymaster
    • Topics: 1
    • Replies: 7045

    I think Lisa intends to infer that the intention behind the giving of the lunch may itself make the gift material. If the purpose of the free lunch is to sway the judgement of the auditor, then that is just as material as any other gift made with the intention of swaying the judgement.

    In these situations, size does not matter. It’s the intention which is important


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    kay12
    Participant
    • Topics: 3
    • Replies: 6

    oh yeah Mike fair explanation. Thanks!


    Avatar of MikeLittle
    MikeLittle
    Keymaster
    • Topics: 1
    • Replies: 7045

    Well, thank you Kay :-)

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