Ethics Case Study: Hi-Sail Company's Balance Sheet

From the case it is clearly reflected that Hi-Sail Company's balance sheet was not as per the standard. The president and the chief financial officer along with client showed some sense of urgency to get the incorrect audit fieldwork (Draft of balance sheet) from the auditor without last year’s potential tax liabilities, debt related to join ventures information etc. During audit information was not correctly provided to the auditor.

To handle this situation the first action I would take concerning the audit will be to gather the relevant facts from all sources and identify the exact problems or place form where this issue is coming. After that I will clearly identify the affected parties with this audit work. Who are the key stakeholders that are getting affected and how they are getting affected, will need to be analyzed. Next step will be to finding out if there are any conflict between stakeholders. I will collect the complete financial transaction information from all relevant sources for current year and also go through the last years audit reports and tax details. Consider all the ethical issues involved and find out how these ethical issues are affecting the personal or public interest of someone. Like if anyone is getting benefit form any wrong …show more content…
Sometimes auditor has a relation with any higher management person in the client firm. It also works as a threat to independence. Increased Level of Competition in the Audit Service Industry Due to increased competition increase the auditor’s dependency on the clients. Auditors find it hard to show the exact information in the report. Normally due to financial dependency they agree with the client's desired accounting statement as client can threaten the auditor by giving the warning of changing the