Question

think an accountant has to follow a certain chain of command. For instance, once an accountant suspects suspicious activity, the AICPA guides accountants (SAS-54) to find out as much as they can about the suspicious transaction, communicate the concerns of legality to management and the legal counsel of the organization/ client and wait for their response and explanation for it. If the accountant/ auditor is not satisfied with the response, then may have to do several things, such as withdraw from making a qualified opinion, make an adverse opinion, and obtain written representations of management that the accountant made them aware of possible standards and law violations. Also, any accountant should consult their own legal counsel in order to protect his/her own reputation. Class, personally I would not want my name associated with any negative activity that would affect my reputation as an accountant or individual. One has to be very careful that the proper channels are followed to ensure they do not get involved by accident. Class, if this were to happen, who should be notified

Answer 1

In case if an accountant does not receive full information during the course of audit, or if the auditor believes there are some shortcomings during audit, he may issue a qualified report. Also, he may issue a disclaimer of audit report incase if he does not receive any information during the course of audit.

Also, the auditor should consult with the management of the organization being audited before issuing audit report.

To protect the reputation of the accountant, he should notify the organization for which he is associated with and also notify the shareholders about the reasons for a qualified report.