Disclosure – Knowsia

AAA – L3 – SA – Q4.10 – Reporting

What should an auditor do if a material uncertainty about going concern is disclosed?

Question

A company prepares its financial statements on a going concern basis, but a material uncertainty exists about the ability of the company to continue as a going concern which is fully disclosed by management in the financial statements. In this situation, what shall the auditor do?

A The auditor’s report shall contain a ‘Material Uncertainty Related to Going Concern’ paragraph

B The auditor’s report shall state an adverse opinion

C The auditor’s report shall state a disclaimer of opinion

D The auditor’s report shall contain an ’emphasis of matter’ paragraph

Answer

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Tags: Auditor’s Report, Disclosure, Financial Statements, Going Concern, Material Uncertainty
Level: Level 3

Topic: Reporting

AAA – L3 – SA – Q2.2 – Confidential Information Disclosure

Permissible disclosure of client confidential information.

Question

In which of the following circumstances would it be permissible for an auditor to disclose confidential information about a client?

A To assist the firm with the audit of another client in the same industry

B To inform shareholders when disclosure is in the public interest

C To protect the interests of the shareholders

D To defend the firm against an official accusation of professional negligence.

Answer

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Tags: Confidentiality, Disclosure, ICAG, Professional Ethics
Level: Level 3

Topic: Rules of Professional Conduct

BCL – L1 – Q108 – Governance and ethical issues relating to business

How company law ensures corporate transparency and disclosure to protect stakeholders.

Question

How does company law address issues of corporate transparency and disclosure to protect the interests of stakeholders?

Answer

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Tags: Company Law, Corporate Governance, Corporate transparency, Disclosure, Stakeholder protection
Level: Level 1

Topic: Governance and ethical issues relating to business

SCS – L3 – Q17 – Professional practice and codes of ethics

Identify three situations at NTM conflicting with IFAC's Code of Ethics.

Question

At its recent Annual General Meeting, management of NTM was highly criticized for two major scandals that occurred in the organization during the year. In one case, newspapers reported that the management of the company connived with officials at the port to undervalue imports in order to pay lower taxes. In the other case, it was reported that the accountant leaked information to his friend who was bidding for a contract in the company. The Board Chairman, who is also the Chief Executive Officer of the company apologized for these incidents but did not disclose that the company had been sued in respect of the first case. He went on to promise the shareholders that the fortunes of the company would change dramatically by the end of the new year as the company was going to start exporting its products to Europe within the next few weeks.

Required:
(a) Identify and explain THREE situations that are in conflict with the International Federation of Accountants (IFAC)’s Code of Ethics.

(b) Explain FOUR disadvantages of the CEO acting also as the Chairman of the Board.

Answer

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Tags: Confidentiality, Conflicts of Interest, Corporate Governance, Disclosure, Ethics, IFAC Code, Integrity, Stakeholder Management
Level: Level 3

Topic: Professional practice and codes of ethics

Tag (SQ): Disclosure

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AAA – L3 – SA – Q4.10 – Reporting

What should an auditor do if a material uncertainty about going concern is disclosed?

AAA – L3 – SA – Q2.2 – Confidential Information Disclosure

Permissible disclosure of client confidential information.

BCL – L1 – Q108 – Governance and ethical issues relating to business

How company law ensures corporate transparency and disclosure to protect stakeholders.

SCS – L3 – Q17 – Professional practice and codes of ethics

Identify three situations at NTM conflicting with IFAC's Code of Ethics.

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Tag (SQ): Disclosure

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AAA – L3 – SA – Q4.10 – Reporting

What should an auditor do if a material uncertainty about going concern is disclosed?

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AAA – L3 – SA – Q2.2 – Confidential Information Disclosure

Permissible disclosure of client confidential information.

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BCL – L1 – Q108 – Governance and ethical issues relating to business

How company law ensures corporate transparency and disclosure to protect stakeholders.

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SCS – L3 – Q17 – Professional practice and codes of ethics

Identify three situations at NTM conflicting with IFAC's Code of Ethics.

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