Professional Standards of Auditing According Term Paper

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On the other hand, Enormo Corp is a big client for CPA, and exposing its case to authorities, would mean losing it.

As an alternative, CPA can refuse to work with Enormo Corp in this case and Enormo would be forced to resort to a different auditing company.

3. Recommended course of action. CPA has the right to handle this situation with the client, while trying to continue to have a professional relationship in the future. So, the suggested course of action would be to address the issue to a higher authority, start documenting it and explain to the client the implication of such documentation.

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The auditing firm also has the right to protect its integrity, so in this case it is essential to document the findings. However, since there is no rule that forces the auditor to report such discrepancy, the auditor will chose to restrict its actions to including this issue in the final report, which will be available in future audits.

Reference List

AICPA - the American Institute of Certified Public Accountants 1999, ET Section 102 - Integrity and Objectivity, http://www.aicpa.org/

IFAC - the International Federation of Accountants, 2007 Handbook of International Auditing, Assurance, and….....

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