Question

SECTION ONE COMPREHENSIVE CASES 7. When a CPA firm has two audit clients that transact business with each other, wed to share information regarding their clients, since such sharing of data might result in the auditors' obtaining a more accurate picture of each client's financial condition? Discuss the advantages and disadvantages of amending the client confidentiality rule to allow communica- tion between audit teams under such circumstances.

Answer 1

Рао Answer o © The auditor responsibility is not to disclose any Confidential information to outsiders unless it is permitted by law. He should also possess certain qualities such as, * Caution * patients * Tact * common sense * Good tempor * Realiability * Trust * clear hodidness. The auditor responsibilitics are : An auditor condueting an audit 'in accordance with SAs is responsible for obtaining reasonable assevance that the financial statements taken as a whole are free from material. misstatement', whether caused by error(01) fraud...

- " objective and General principles Governing an audit @ of financial statements 16" owing to the inherent dinitations of an audit, - there is an unavoidable risk thail some merterial mis startements of the financial statements will not be dkteled, Even though the audit is properly planned and performed in accordance with the SA, as deserited in SA 200.