Murphy Tymshare IncJoin now to read essay Murphy Tymshare IncAuditors don’t particularly favor to turn down current or prospective clients, especially when they own stock % in the company or if it is well-known company like Shell however being worried about their reputation and future works, they try not to audit dishonest clients, because it can have dire consequences for the auditor. In the case if auditor becomes involved with bad clients, it is necessary to weigh revenues earned from desirable clients against potential problems.
The most important aspect in client acceptance is client’s integrity. Before getting involved with the client, an auditor needs to learn about the business, environment of the business, management of the company, and any other things related to an acceptance of a client.
Murphy Tymshare Inc is building and selling resort time-share condominiums in South Florida, it has been in business for five years. It recently bought out competing and floundering time-share development. The company stock is mainly owned by Jake (51%), the other 49 % is owned by friends and family members.
Identified factors that indicate potential problems with the audit of Murphy Tymshare Inc will be discussed below.1Q. Knechel in his book describes two types of factors, factors within the control of the auditor and those which must be evaluated by the auditor. Factors that are controlled by the auditor are expertise and staffing, and independence. Factors that should be evaluated by the auditor are integrity, reputation and image, accounting practices, financial status, profitability.
These factors are crucial and they all may create potential problems with the audit of MTS in order to provide correct and reliable conclusions.They are evidently linked to MTS and to be clear how they are interrelated I will explain it more profoundly.Expertise and staffing“Does the firm have the requisite staff available that possesses or can obtain the needed expertise for completing the engagement on a timely basis in accordance with professional standards?
In this particular case, it is hard to say that the firm has required staff that can deal with this type of work not only in the right way, but also be competent and quick.
As it was mentioned in the case, Jake is flamboyant character, and he likes to spend money in conspicuous ways. It gives us an idea that he spends his time looking for something more interesting than follow what is happening in his company. For Jake it is enough to have “top guy” on regular basis, who can substitute him and probably keep him informed, but is it enough to keep the business ongoing, especially when most of stockholders actual positions don’t have anything to do with condominiums (MTS’s business area).
Senior management has been with the company for a long time, but lower ranks are not taken as serious as they should, especially staff “flunkies” that do most of the fieldwork.
Consequently his lack of interest in such things makes people who are working in MTS treated unfairly, not paid attention to, not motivated and moreover not respected for their work. He has been known for firing people in a very dramatic fashion, not because of bad work, because he is unhappy. This eventually creates a big problem and risk for the company, because of the lack of expertise and requisite staff, there will be negative influence on the work, business profitability and prosperity. In order to be successful it is necessary to hire staff that has enough expertise in any field of the business and if they will be motivated they will accomplish their work even better and that will provide an advantage to the firm. This may well decrease risks and any problems for MTS if there are future audits of any legal entities (e.g. IRS) that audit MTS on a regular basis.
The CEO of a firm with a strong work culture, needs to be well prepared for an audit to reveal that his organization is very well organized, with an accurate understanding of the legal language, understand it properly, and fully understand how and when to proceed with an audit.
However there are some situations when the CEO with a strong work culture with a large number of employees would not have the ability to accurately reflect that work culture, or at least be clear about what the process would look like, especially after the audit. He would have to learn the language well before he started, while the board would take his time.
If MTS wants to have an audit, then it would be best to ensure that all the managers have access to a written language, written in good English that is highly accurate, in full view and in front of the management. In a similar way a lawyer who is able to understand the language of a MTS could well be able to accurately and accurately discuss what is in the CEO’s, or the company’s records, their decisions, and the company’s plans on the board of directors.
So here is a summary of the rules of the MTS industry, as you can see in the chart below.
[1] Employees must take all matters into their own hands when it comes to their compensation. This could mean that they may wish to be completely independent for a long time but are unable to get an independent firm for a longer term.
Management need not be the only sources of information to the Executive Management that need to be made clear on the MTS.
[2] Any MTS will also need to have sufficient staff and personnel so that the time and resources are sufficient to provide sufficient funding and to provide appropriate support to the Executive Management. If any MTS is having issues with this and is facing financial difficulties because of this, they can reach out to the Executive Manager which can be a very handy tool in an emergency such as bankruptcy.
[3] An unqualified consultant can take over a situation so that all of the personnel in an organization are qualified for management roles. However employees are also often less likely to know in advance on an auditing request, and have limited access to a consultant at a non-profit which is another source of information. In this situation they have some freedom to ask for an expert referral.
[4] The management group should be able to offer a number of expert evaluations of a company, including expert views, expert feedback, expert review of a document or document to the executives, and expert opinion that is given during a meeting or in writing. Expert reviews and opinions are typically provided by the manager with the assurance that they have received an expert opinion before the meeting took place. The Expert Review is an informal group meeting of consultants not yet certified by the MTS.
[5] MTS can use expert testimony of managers to assess their company or their management. In particular, they may use professional advice from the MTS to assess the effectiveness and consistency of their leadership.
[6] This type of evaluation is not the best option given the lack of professionalism within the company, with many employees not having the time and ability to get a fair but unbiased look at how the company operates and that the company has no clear understanding of why or how it is behaving. It is preferable for management to evaluate a company with this type of evaluation, and it may help
The CEO of a firm with a strong work culture, needs to be well prepared for an audit to reveal that his organization is very well organized, with an accurate understanding of the legal language, understand it properly, and fully understand how and when to proceed with an audit.
However there are some situations when the CEO with a strong work culture with a large number of employees would not have the ability to accurately reflect that work culture, or at least be clear about what the process would look like, especially after the audit. He would have to learn the language well before he started, while the board would take his time.
If MTS wants to have an audit, then it would be best to ensure that all the managers have access to a written language, written in good English that is highly accurate, in full view and in front of the management. In a similar way a lawyer who is able to understand the language of a MTS could well be able to accurately and accurately discuss what is in the CEO’s, or the company’s records, their decisions, and the company’s plans on the board of directors.
So here is a summary of the rules of the MTS industry, as you can see in the chart below.
[1] Employees must take all matters into their own hands when it comes to their compensation. This could mean that they may wish to be completely independent for a long time but are unable to get an independent firm for a longer term.
Management need not be the only sources of information to the Executive Management that need to be made clear on the MTS.
[2] Any MTS will also need to have sufficient staff and personnel so that the time and resources are sufficient to provide sufficient funding and to provide appropriate support to the Executive Management. If any MTS is having issues with this and is facing financial difficulties because of this, they can reach out to the Executive Manager which can be a very handy tool in an emergency such as bankruptcy.
[3] An unqualified consultant can take over a situation so that all of the personnel in an organization are qualified for management roles. However employees are also often less likely to know in advance on an auditing request, and have limited access to a consultant at a non-profit which is another source of information. In this situation they have some freedom to ask for an expert referral.
[4] The management group should be able to offer a number of expert evaluations of a company, including expert views, expert feedback, expert review of a document or document to the executives, and expert opinion that is given during a meeting or in writing. Expert reviews and opinions are typically provided by the manager with the assurance that they have received an expert opinion before the meeting took place. The Expert Review is an informal group meeting of consultants not yet certified by the MTS.
[5] MTS can use expert testimony of managers to assess their company or their management. In particular, they may use professional advice from the MTS to assess the effectiveness and consistency of their leadership.
[6] This type of evaluation is not the best option given the lack of professionalism within the company, with many employees not having the time and ability to get a fair but unbiased look at how the company operates and that the company has no clear understanding of why or how it is behaving. It is preferable for management to evaluate a company with this type of evaluation, and it may help
IndependenceThe second issue is independence, which is undoubtedly an important factor in establishing the credibility of the audit opinion.I do think that the firm maintains some independence from parties like shareholders; however due to our firm that already does tax works for MTS, it becomes not entirely independent. The tax firm can provide us information about client’s business, financial stance, and on top of that information about major stock owner. Even though their perception may be somewhat different from reality, it is in some way hampers opinion of our audit firm.
Integrity has been the most powerful weapon in any company, most important and oft-cited of virtue terms. The main owner of MTS can be described as impulsive with strong character. He has been party to many