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rittenberg summary

rittenberg summary

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Published by kevinlim186
rittenberg summary
rittenberg summary

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Published by: kevinlim186 on Jan 19, 2013
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General decision making framework
Step 1: Auditor structures the problem, considering the relevant parties to involve in the decisionprocess, identify various feasible alternatives, considering how to evaluate alternatives and idenfityinguncertainties or risks.Step 2: assess the consequences of the potential alternatives.Step 3: auditor assess the risks (audit client & quality and sufficiency of data gathered) and uncertaintiesin the situation.Step 4: evaluates the various information/audit evidence-gathering alternatives against the appropriatedecision.Step 5: sensitivity analysis of step 2-4Step 6: auditor gathers information and audit evidence in an iterative process that affects considerationsabout the consequences of potential alternatives and the uncertainties associated with those judgements.Step 7: determination of whether the problem has been sufficiently analyzed and whether the risk of making an incorrect decision has been minimized to an acceptable level.
Ethical decision making process
Ethical problem occurs when an individual is morally or ethically required to take an action that mayconflict with his or her immediate interest.Ethical dilemma occurs when there are conflicting moral duties or obligations.
Ethical theories1. Utilitarian theory
 
What is ethical is the action that achieves the greatest good for the greatest number of people.
 
Decision steps
o
 
Identification of the potential problem and courses of action.
o
 
Identification of the potential direct or indirect impact of actions onstakeholders
o
 
Assessment of the desirability of action
o
 
Overall assessment of the greatest good for the greatest number2. right theory
 
Focuses on evaluating actions based on the fundamental rights of the parties involved.
 
 
Level of rights
o
 
1
st
life, autonomy and human dignity
o
 
2
nd
rights granted by the government such as civil rights, legal rights
o
 
3
rd
social rights such as right to higher education, to good health care
o
 
4
th
nonessesntial interests- play golf, be rich
 
Decision steps
o
 
Identify ethical issues
o
 
Determine who are the affected parties and identify their rights
o
 
Determine the most important rights
o
 
Develop alternative courses of action
o
 
Determine the likely consequences of each proposed course of action
o
 
Assess the possible consequences, including an estimation of the greatest goodfor the greatest number
o
 
Decide the appropriate course of action.
Professional conduct
Rules of conduct are specific guidelines that reflect the board principles of the profession.Strict compliance with independence is important on covered member ( attest engagement team, in aposition to influence the attest engagement, partner in the office which the lead attest engagementpartner primarily practices.
Financial interest
Direct financial interest is a financial interest owned directly by or under the control of an individual orentity or beneficially owned through an investment vehicle.Indirect interest occurs when the beneficiary neither controls the intermediary nor has the authority tosupervise. (5% or less)
Confidentiality
Privilege communication: mean that confidential information obtained about a client cannot besubpoenaed by a court of law to be used against that client.
Contingent fees
Fee established for the performance of any service in which a fee will not be collected unless a specifiedfinding or result is attained or which amount depends on the finding or results.
Managing threats to independence
1.
 
Establishing and monitoring corporate codes of conduct2.
 
Developing appropriate compensation schemes

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