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AAA – L3 – SA – Q5.3 – Professional responsibility and liability

What should an auditor do upon suspecting fraudulent activity by a director?

Question

An audit engagement partner suspects that a director of a client company has been carrying out fraudulent activity. What would be the most appropriate immediate course of action?

A Challenge the suspected individual

B Report the suspicions to the audit committee of the client company

C Report the suspicions to the chairman of the board of the client company

D Seek legal advice

Answer

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Tags: Audit committee, Auditor Response, Fraud suspicion, Governance, Legal advice
Level: Level 3

Topic: Professional responsibility and liability

BCL – L1 – Q59 – Alternative forms and constitutions of business organisations

Advise Ama, Dela, John, and Mr. Addo on forming a consultancy partnership, considering capital contributions and partner eligibility.

Question

Ama, Dela, and John were classmates from ICAG 2014 batch of graduates. They intend to form a consultancy firm/partnership in the future by pooling resources together. Ama’s 2005 Toyota Siena estimated at GH¢40,000 will be her initial capital contribution towards the formation of the partnership. However, the car is currently registered in the name of her father, Mr. Addo, a 59-year-old Chief Accountant for Zenith Energy Limited, who desires to be part of the daughter’s business upon retirement and will not let go of title to the car without any benefit. Dela and John, who are contributing GH¢30,000 each of the initial capital, are opposed to any ‘old-school’ accountant being part of their partnership.

You are the most-rated business law student. Advise the parties.

Answer

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Tags: Business formation, Capital contribution, Legal advice, Partnership, Partnership agreement
Level: Level 1

Topic: Alternative forms and constitutions of business organisations

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AAA – L3 – SA – Q5.3 – Professional responsibility and liability

What should an auditor do upon suspecting fraudulent activity by a director?

BCL – L1 – Q59 – Alternative forms and constitutions of business organisations

Advise Ama, Dela, John, and Mr. Addo on forming a consultancy partnership, considering capital contributions and partner eligibility.

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AAA – L3 – SA – Q5.3 – Professional responsibility and liability

What should an auditor do upon suspecting fraudulent activity by a director?

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BCL – L1 – Q59 – Alternative forms and constitutions of business organisations

Advise Ama, Dela, John, and Mr. Addo on forming a consultancy partnership, considering capital contributions and partner eligibility.

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