https://rpubs.com/staszkiewicz/Ch1_JF_EN

Johnathan Firecat

Case study Johnatan Firecat Mr Jonathan Firecat is the chancellor of the Parliament Commission for Business. The Commission is currently discussing liberalisation procedures for the business in respect of auditing. Member of the Commission have presented the following views thereon:

  1. Arnold Radziwił: Due to the increasing number of frauds on the market the responsibility of the auditors should be enhanced to cover the losses of frauds to shareholders.

  2. Maria Siepko: The auditor examinations should be abolished, they restrict access to the profession for young people. If they are abolished unemployment will be lower.

  3. John Smith: Because we can observe an increasing number of errors in tax filing, the government is recording an increase in the liquidity gap. The auditor’s requirements should thus be imposed over all taxpayers.

  4. Andrzej Mikołajczyk: Because of the number of errors in audit reports, we should systematically change the system and, instead of the audit requirements, we should impose insurance requirements on the financial statements.

  5. Alex Chiou: We recommend introducing full acceptance of foreign audit licenceholders. This will increase competition in local markets and lead to reduced audit fees.

  6. Michał Korek: By creating one association and chamber of auditors, this chamber tends to protect its members at the cost of the business. In order to limit this negative action it is proposed to allow the auditors to create as many professional chambers as they feel are relevant. Because of competition between the chambers the pressure on the business will be limited.

  7. Anita Wojtko: The auditing examination review should be changed. In the case of dispute between the student and examination body the court make the technical resolution.

You are an economics university graduate specialising in auditing and finance and you are Mr Firecat’s new assistant. The Commission is due to present the draft of bill on auditors next week.

You are required to:

  1. Show the arguments for and against each of the opinions (i-vii)

  2. Describe your local legal system of auditing based on Internet research

  3. Draw the draft bill.

Source: Audit. An Introduction… p. 42