For Registrar’s office use only (hard copy submission)
Student IDs
(Assign the IDs for each task that the students completed )
00007736
00008422
00007321
00008188
00006680
Deadline Date
Friday, March 11th , 2022;
Time: 23:59
Assignment Type
Group Coursework
Task 1 Silver Page Senior Manager’s Meeting Minutes March 10, 2022 10:00-10:30
Harvard Room, Amir Temur Building
12 Istikbol Street, Tashkent 100047
Present: Mr Brown, Senior Audit Manager; Mr John, Senior Audit Manager; Miss Red, Senior Audit Manager; Miss Clark, Senior Audit Manager; Miss White, Senior Audit Manager.
Absent: -
1. Call to Order Meeting was called to order at 10:00 with Mr. Brown as Senior Audit Manager
2. Approval of Agenda Motion: To approve the agenda of the March 10, 2022 manager’s meeting
Miss Clark Carried 3. Approval of Minutes Motion: To approve the minutes of March 1, 2020 manager’s meeting
Miss Clark Carried 4. Business from the Previous Meeting Motion: To review the application of Uzairways to be audited by Silver Page. General information about Uzairways was collected. The company seemed to have positive background and moreover, Uzairways has been listed on the London Stock Exchange since its initial public offering (IPO) seven years ago. It has only operated in Central Asian airspace till recently. Hereby, it was decided to accept a new client engagement.
5. New Business Motion: To identify the possible threats to independence and objectivity of the Uzairways, which Silver Page was going to audit.
According to Mr Brown, Silver Page has a Client Acceptance Policy in place that outlines the criteria they use to decide whether or not to accept a new client or engagement. These concepts are essential for preserving quality, managing risk, safeguarding the company, and complying with regulatory requirements.
Other audit firms have audited Uzairways' yearly financial statements for the past ten years. Uzairways has not yet signed an audit engagement contract with a new auditor, according to the chairman of the audit committee, but needs a decision from our firm within a limited time period, as Uzairways' fiscal year ends on December 31.
Miss Red made following statement regarding self-interest risk: “The results of the analysis showed that one of the auditors working in Silver Page organization has a shares in venture capital in this Uzairways. She checked this from personal data database which changes every three months from the personal documents. According to the theory, any financial or personal interest or personal relationship between the client and the auditor is prohibited and it leads to a self-interest threat. It can be avoided by disposing his shares or engagement partner should be changed.”
Moreover, Mr John had the following viewpoint regarding threat of familiarity: “There was a case that this company had a close relationship with the company which audited last time. After the end of their project they had a joint football play which is followed by a luxury meal.”
Furthermore, Miss Clark added some points on threat of intimidation. According to her analysis, she found out that the previous auditors prepared the audit report under the strict control of the manager of Uzairways. The statements were prepared in that way the manger wanted them to be, not according to fundamental principles. Assigning an assurance team that is of sufficient experience in relation to the individual who has joined the assurance client would be a good safeguard.
In addition, Miss White found that one of the auditors from Silver Page represented the Uzairways company in 2020 in court for a dispute with one of the suppliers. Such factor leads to the responsibility of the auditor is for being an advocate for the client. Moreover, the auditor is also responsible for reviewing the company’s financial statements. However, due to the advocacy, they do not disclose any misstatements they find in the financial statements. Auditors can avoid it by segregating their teams for each task. That is why auditor may have to choose between representing the client and continuing audit engagements.
Confirming Mrs White's argument, Miss Red can assume that this employee has previously served in the bank of their choice and is partially aware of the financial information of this company. Currently, this employee wants to participate in the verification of the data of the firm. However, this should be strictly prohibited as it poses a self-review threat. To prevent this, he should be excluded from the assurance engagement.
Mr Brown decided to reject a new client or engagement due to the big number of threats to independency and objectives.
