Hello, I need a full answer for this case: Julia, CGA, is an audit partner with the CGA firm of Cristi & Jones LLP, based in Toronto. Julia and her audit team recently completed the audit of Falco
I need a full answer for this case:
Julia, CGA, is an audit partner with the CGA firm of Cristi & Jones LLP, based in Toronto. Julia and her audit team recently completed the audit of Falcon Limited (Falcon) and planned to issue an unmodified opinion on the financial statements. The issuance of the opinion would occur in two weeks, after the board of directors approves the financial statements. Prior to the issuance of the Falcon report, Julia and the same audit team began the audit of Eagle Limited (Eagle). During the fiscal year, Eagle sold a significant amount of property to Falcon. Eagle and Falcon are non-related parties and deal at arm’s length. During the audit of Falcon, Julia’s team verified the selling price of the property by reviewing the purchase and sale agreement and vouching the payment to the cancelled cheque. Subsequently, while performing the Eagle audit work, the auditors discovered that Eagle had dealt with Falcon unfairly by selling them property that was significantly overpriced.
What are the moral/ethical issues, if any? What should Julia do? Use the relevant steps from the nine-step case analysis approach you studied in Topic 2.5. (You can also find the case analysis approach in “Analyze a case” under the Resources tab.) Organize your answer using the headings indicated below.
Marks will be allocated as follows:
Identify problems and issues 2 marks
Generate alternatives 2 marks
Select the decision criteria 1 mark
Analyze and evaluate the alternatives 6 marks
Recommend an action for Julia (explain your reasoning) 1 mark