Reference no: EM133507581
Case Study: You are an audit manager in Nate & Co, a firm of Chartered Certified Accountants. You are reviewing three situations, which were recently discussed at the monthly audit managers' meeting: 1 Nate & Co has recently been approached by a potential new audit client, Fisher Ltd. Your firm is keen to take the appointment and is currently carrying out client acceptance procedures. Fisher Ltd was recently incorporated by Marcellus Fisher, with its main trade being the retailing of wooden storage boxes. 2 Nate & Co provides the audit service to CF Lid, a national financial services organisation. Due to a number of errors in the recording of cash deposits from new customers that have been discovered by CF Ltd's internal audit team, the directors of CF Ltd have requested that your firm carry out a review of the financial information technology systems. It has come to your attention that while working on the audit planning of CF Ltd, Jin Sayed, one of the juniors on the audit team, who is a recent information technology graduate, spent three hours providing advice to the internal audit team about how to improve the system. As far as you know, this advice has not been used by the internal audit team. 3 LA Shots Ltd is a manufacturer of bottled drinks, and has been an audit client of Nate & Co for five years. Two audit juniors attended the annual inventory count last Monday. They reported that Brenda Mangle, the new production manager of LA Shots Ltd, wanted the inventory count and audit procedures performed as quickly as possible. As an incentive she offered the two juniors ten free bottles of "Super Juice' from the end of the production line. Brenda also invited them to join the LA Shots Ltd office party, which commenced at the end of the inventory count. The inventory count and audit procedures were completed within two hours (the previous year's procedures lasted a full day), and the juniors then spent four hours at the office party.
Required
(a) Define 'money laundering' and state the procedures specific to money laundering that should be considered before, and on the acceptance of, the audit appointment of Fisher Ltd.
(b) With reference to CF Ltd, explain the ethical and other professional issues raised.
(c) Identify and discuss the ethical and professional matters raised at the inventory count of LA Shots Lid.