ACCA · Question 02 · Audit Framework and Regulation
SECTION A - CASE 1: NEUROCLOUD ANALYTICS CO
NeuroCloud Analytics Co is a fast-growing tech startup providing AI-driven data analytics to the healthcare sector. You are an audit manager at Turing & Co, planning the audit for the year ended 31 December 20X5. NeuroCloud is not a public interest entity (PIE).
During the planning phase, you note the following:
Question:
NeuroCloud has requested Turing & Co to design and implement a new IT system for their financial reporting. What is the primary ethical threat this creates, and can Turing & Co accept this non-audit engagement?
Answer options:
Self-interest threat; Turing & Co can accept it if separate teams are used.
Self-review threat; Turing & Co should not accept the engagement as it relates to financial reporting systems.
Advocacy threat; Turing & Co can accept it provided the client's management takes responsibility for the system.
Familiarity threat; Turing & Co should not accept it as it creates too close a relationship with management.
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