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Case #1 Lakeside

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Case #1 Lakeside
Case #1
[Type the document subtitle]

2/16/2014

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Summary

Discussion Questions – 2 Hours

Exercise – 1.5 Hours

Table of Contents

Title Page……………………………………………………………..…………………………..

Review Comments…….……………………………………………………………………........1

Team Summary …………………………………………………………………………………..2

Table of Contents……………………………………………………………………………..….3

Discussion Questions……………………………………………………………………………...4

Question #1………………………………………………………………………………..4

Question #2………………………………………………………………………………..4

Question #3………………………………………………………………………………..4
Question #4………………………………………………………………………………..4
Question #5………………………………………………………………………………..4

Question #6………………………………………………………………………………..5

Exercises…………………………………………………………………………………………..6
Exercise #1………………………………………………………………………………6,7
Exercise #2………………………………………………………………………………..8

Discussion Questions

1. The owners of Lakeside as well as the company’s bank may require that an independent CPA firm perform an annual audit because the CPA firm could have an independence issue. The CPA firm in that Lakeside wants to hire is also the auditors for Lakesides main financial bank. The bank is a “main” user of the report put out by Lakesides auditor and in this case would be that banks auditor too. The connection is too close for the CPA firm to pick up this client, it would be against the ethically code.

2. Abernethy and Chapman do not have in-depth understanding of the consumer electronics industry that Lakeside is a part of, therefore it would be an unethical and against the rules of conduct. Rule 201 in General Standards part 1 says, “undertake only those professional services that the member can reasonably expect to complete with professional competence”. As stated if the firm does not have a member or experience in the field of business the auditing firm should refrain from taking on that client. Could an auditing firm get by in auditing the books of
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