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Hi ,
My question is regarding the scenario of the gun-freak CEO, so what should an auditor do if he/she received a threat? There are countries where using gun is completely legal and oligarchs have superior power over government, And the auditor can’t do anything but whatever he/ she has been told, what’s the solution of this kind of problem? Should the auditor still report the company? And what if the threat kept going on?
Thank you
There is no short answer to such a scenario (which wouldn’t be examined). “Theory” would say that the auditor would withdraw from the engagement/not accept it in the first place.
If the problem was endemic one would have to question such fundamental things as the legal and regulatory requirements for financial reporting and audit – whether the country has a professional body – whether it is a member of IFAC – etc, etc.
The work of the World Bank, OECD, IFAC, EU and many other bodies includes bringing financial reporting and auditing reform (also corporate governance) to countries where it is lacking. Obviously there has to be political support for any reform and it takes many years – even decades – to bring about.Thank you so much for replying, that was very helpful. I know it’s not examinable, but this question has always been on my mind and witnessing co-workers facing the exact situation just wanted to be prepared(or armed with knowledge) for future surprises :D.
Thank you so much Mr. Kim!
The Code of Ethics rather assumes that a professional accounting is working in an environment in which there are mechanisms for the accountancy profession to support acting in the public interest. Where fraud, corruption and bribery are the “norm” (for example) there can’t be any real regulatory body, oversight authority or “those charged with governance”.
(And it’s Ms or Mrs or just Kim)
I see, so according to The Code of Ethics the ACCA member must not accept auditing the financials of such entities. thanks for making it clear Kim and I’m really sorry.
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