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Discussion Response (AG)

18/10/2020 Client: ali Deadline: 7 Days

  Sheralee 


Please respond to the student 


1) In this course, we have been reviewing audited financial reports. If the auditor’s fee is paid from the entity being audited, isn’t there a conflict of interests that may lead to a lack of objectivity? Do you believe that a CPA can be truly independent when their payment of fees is dependent on the client?



  • Even though the auditor is being paid by the entity he/she is auditing, I believe that the auditor can still be truly independent. My reasoning revolves around the fact that the auditor does not necessarily decide what to do with the information that is uncovered. More specifically, the auditors are not expected to have any responsibilities related to operations. An auditor can’t necessarily affect the operations of business so theoretically there shouldn’t be an issue with an internal auditor being able to do their job appropriately. The information that the auditor uncovers is meant to benefit the company, so unless the authority the auditor reports to is involved in some kind of fraud, it shouldn’t matter who is paying the auditor. Another thing to consider is that CPA requirements are pretty extensive. The exam itself is difficult and requires a large amount of dedication, time and energy to pass. Depending on the state there are age, residency and extensive education requirements involved to attain and hold a license, so it just seems crazy to me that someone would jeopardize that by not performing their job properly (Becker, 2020).


2) You overheard a friend at a party say that changes in information technology will greatly decrease the demand for accountants. How would you respond to this comment?



  • This topic is definitely a running theme in our accounting courses. Personally, I welcome the changes in IT such as robotic automatic process automation because there are simply way too many manual tasks that are still being done by people to this day. If a good majority of these tasks can successfully be completed with technology, this frees up accountants to focus more on critical thinking and enhancing other skills within the field. I work in AP and my data entry work can be pretty mindless at times and tedious, during our busy season it is near impossible to keep up with the data entry workload while also helping to advise my coworkers, follow up with vendors and work on my more complex tasks. I am always thinking of ways to streamline my process whenever possible.


If less complex and more tedious manual tasks can be done properly with technology, then I think accountants will have more time to practice what I think is the core of accounting. This involves problem solving, critical thinking and staying organized. Advances in IT are here to stay so really, there is no use in fighting it, we just need to grow along with it and use it for our advantage. It may definitely decrease the demand for accountants who prefer to do things manually and I think that is fine. The industry should progress along with the rest of the world by utilizing all tools at its disposal.


3) Most government entities, not-for-profits, and for-profit companies have a “Code of Conduct”. This document outlines the responsibilities and proper practices for an individual in the organization.  In most cases, new employees need to sign a letter acknowledging that they have read and understand the “Code of Conduct”.


Do you really believe that having a written code of conduct will reduce fraud and other dishonest acts in an organization? Why or why not?



  • A Code of Conduct is absolutely necessary for an organization to have. Employees must understand what is or isn’t acceptable in a specific environment. While there are things that are just common sense, it helps to validate that everyone is knowingly on the same page. Many issues arise when there isn’t proper communication and a code of conduct can certainly help to alleviate any sort of misconceptions of what is appropriate or not. Will this help to deter fraud and dishonesty? Maybe. I mean if someone is determined to commit fraud then I don’t think that some words are going to stop them, but a code of conduct which outlines unacceptable acts and consequences may help someone else think twice about if they are willing to possibly suffer the consequences or not.


References


Becker. (2020). CPA License Requirements. Retrieved from Becker CPA Review: https://www.becker.com/cpa-review/requirements

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