Ethical Obligations and Decision-Making in Accounting 2nd Edition by Steven Mintz, Roselyn Morris

Exercise 20

The Oregon Supreme Court concluded that “defendant breached its duty to plaintiff by failing to provide competent accounting services.” This supported the claim by OEM that Coopers’ advice regarding the 1994 transaction was incorrect and that it gave the advice negligently. How should courts decide whether professional accounting services have been competently provided?

Step 1 of 2

Audit:

The audit is defined as a systematic examination of books of accounts of an individual or an organization.

Auditor:

Auditing is done by the professional CPA; we call them auditors. At the end of the accounting period when all the books of accounts are closed, an auditor ensures all the entries recorded in the books of accounts are accurate as required in the law.

According to the AICPA Code of Professional Conduct, as per CPA or auditor should not work for his gain. He should work with a high sense of integrity and know what is right and just. As per the auditor, he should be an independent person from the client, and his objective should be not getting close to a client with strives to maintain public confidence in this profession.