Question

Ethical Issue All chapter discussions are 'post-first' discussions. That means, you must create and submit your own response (post) before you are able to see discussion posts from other students. Click create thread to type your response. You cannot edit or delete your response after you submit your post should include 300 words and at least a 100 word response. Tana Thorne works in a public accounting firm and hopes to eventually be a partner. The management of Allnet Company invites Thorne to prepare a bid to audit Allnet's financial statements. In discussing the audit fee, Allnet's management suggests a fee range in which the amount depends on the reported profit of Allnet. The higher its profit, the higher will be the audit fee paid to Thorne's firm. Required 1. Identify the parties potentially affected by this audit and the fee plan proposed. 2. What are the ethical factors in this situation? Explain. 3. Would you recommend that Thorne accept this audit fee arrangement? Why or why not? 4. Describe some ethical considerations guiding your recommendation.

Answer 1

Ans. (1) Tana Thor me will be the party mostly affected by it because his pay is based on the Amount which could be good or bad, Profit (2) There is nothing ethical about this situation because the company is basing the fee off of the total profits that both parties don't really know the outcome of how high the total profit will be unless It's in a legal contract then I don't feel it should be an option, on dhe profit of a firm or (3) I feel that we should not accept it due to the fact that It's not a legitimate. The Magor Auditing Standard would be broken if the All- diting fee is based comfanya Auditing fen Auditing fees has to do with the indele of the auditor, Basing the auditing fee on Profit could affect the impartiality of the auditor or at least give appearance of bias. ndence (4) The Audit fee" is how much will be charged. A " fee Range" would mean the fees would charge depending upon what actious are taken

or what the results are re. It would be ethical if an audit fee is charged, and thus should net the auditing Standards. violate