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  Term 5 Unit 1 DiscussionsUnit 1 DB: Problem 1-39 (ACC440 Auditing)Comment on Problem 1-39.In a

  Term 5 Unit 1 DiscussionsUnit 1 DB: Problem 1-39 (ACC440 Auditing)Comment on Problem 1-39.In a

  Term 5 Unit 1 DiscussionsUnit 1 DB: Problem 1-39 (ACC440 Auditing)Comment on Problem 1-39.In a


Term 5 Unit 1 Discussions

Unit 1 DB: Problem 1-39 (ACC440 Auditing)

Comment on Problem 1-39.

In a discussion between Peters and Ferrel, two auditing students, Peters made the following statement: “A CPA is a professional person who is licensed by the state for the purpose of providing an independent expert opinion on the fairness of financial statements. To maintain an attitude of mental independence and objectivity in all phases of audit work, it is advisable that the CPA not fraternize with client personnel. The CPA should be courteous but reserved and dignified at all times. Indulging in social contacts with clients outside business hours will make it more difficult to be firm and objective if the CPA finds evidence of fraud or of unsound accounting practices.” Ferrel replied as follows: “You are 50 years behind the times, Peters. An auditor and a client are both human beings. The auditor needs the cooperation of the client to do a good job; you’re much more likely to get cooperation if you’re relaxed and friendly rather than being cold and impersonal. Having a few beers or going to a football game with a client won’t keep the CPA from being independent. It will make the working relationship a lot more comfortable, and will probably cause the client to recommend the CPA to other businesspeople who need auditing services. In other words, the approach you’re recommending should be called ‘How to Avoid Friends and Alienate Clients.’ I will admit, though, that with so many women entering public accounting and other women holding executive positions in business, a few complications may arise when auditor–client relations get pretty relaxed.”

Evaluate the opposing views expressed by Peters and Ferrel. 

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