First things first, we will address your comments regarding the requirement that accountants hold an ACL before they could provide an accountant’s letter or capacity to repay certificate to Bluestone, then with that out of the way, we will comment on what’s the best foot forward for Bluestone regarding using an accountant’s letter to verify an applicant 's financial situation.
CPA Australia’s position
The NCCP Act requires those involved in consumers obtaining credit contracts or consumer leases to have a credit licence (or have an authorisation from a credit licensee) and to comply with responsible lending requirements. Broadly, those who need to be licenced are credit providers or credit assistance providers. A credit provider provides consumer
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Regardless of whether this view is correct, members of CPA Australia is likely to act in accordance with the industry body’s guidelines.
What should Bluestone do?
Bluestone should always (1) make reasonable inquiries about an applicant’s requirements and objectives in relation to the credit contract and their financial situation, (2) take reasonable steps to verify the consumer’s financial situation, and (3) assess whether the credit contract is suitable or unsuitable for the applicant. This is in line with the 3-step process set out by ASIC in RG 209.
For requirements and objectives – examples include enquiries regarding the purpose for which the credit is sought and the benefit to the applicant, and the amount of credit needed and the timeframe for which the credit is required.
For financial situation – examples include the applicant’s current amount and source of income and the extent of any fixed expenses such as
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Against this background, it would be risky to rely solely on an accountant’s letter without also obtaining any direct source documents to enable cross checking, verification, corroboration, etc. On a related note, sole reliance on an accountant’s letter is risky as this form of documentation is more likely to be subject to fraud (as letters can be easily forged).
We are aware of lenders who allow an accountant’s letter to be used in conjunction with other supporting documents, but not on its own. Bluestone could consider requiring interim statements plus an accountant’s letter (which should meet the “reasonable” test and they are easy for an applicant to obtain), or an accountant’s letter and certified balance sheet and P&L statements. Whether Bluestone would only accept an accountant’s letter from a CPA is a decision for the business. ASIC guidelines do not reference whether an accountant is a CA or a
The audit committee should respect the independent opinions from external auditors. Also, there should be certain amount of CPA in the Audit Committee of the Board.
This is a questionnaire completed by Jody Doe (names have been changed to protect identity,). Jody wanted to apply for a Payroll/Account Officer position at a local school. She filled out this questionnaire, we wrote the criteria, she was one of the five candidates out of hundreds of applicants that got an interview. Her winning criteria is listed after this questionnaire..
...le if the privity letter was provided but in there was no privity letter provided. The auditor also does not perform any special audits based on written request. If we have a loon in Esanda case the King & Queen auditors did not prepare the report to convey anything to EFL therefore they cannot be liable (Gay & Simnett 2010, p. 169).
The AICPA Code of Professional Conduct defines independence as consisting of independence of mind and independence in appearance. According to the AICPA Code of Conduct, Section 55 Article IV, An accountant member should maintain objectivity and be free of conflicts of interest in discharging professional responsibilities. Moreover, a member who practices their accounting work in a public firm should be independent in fact and appearance when providing auditing and other attestation services (aicpa.org). According to the case study What Lies Beneath, I think that Betty did not show her professional skepticism since she built trust on her client, which she could not have as an auditor. As an auditor,
The screening process is rigorous and applicants must have all supporting documentation to their claims such as paystubs, among other for...
1. To assess their financial condition and decide if a change is necessary or desirable
Clients want accountants with integrity. Thus, integrity is critical to the public trust. As a matter of fact, one of the general definitions of integrity provided by the AICPA Code is that it is a quality from which the public trust derives. Also, it is an element of character fundamental to professional recognition, and it requires members to be (among other things) honest and candid within the constraints of confidentiality (Duska, Duska & Ragatz, 2011).
The International Federation of Accountants (IFAC) is a global body that sets professional standards for the accounting profession. IFAC has an Ethics Committee which released a new code of ethics, effective from June 2006 (George, 2005), and updated this code, effective from January 2011. There are five fundamental principles in this code of ethics, objectivity, integrity, professional competence and due care, confidentiality and professional behaviour. Objectivity implies that an accountant should not allow bias, conflict of interest or undue influence of others to override professional or business judgements (George, 2005). Accountants must be honest, straightforward and act with integrity in all business relationships. The principle of professional competence and due care requires accountants to act diligently and in accordance with current technical, professional and legislative requiremen...
Assessment: It compiles simplified version of personal financial statements like B/S and I/S which may include personal assets like car and house etc.
...el such as: purpose of the loan, maturity of the security pledged, the history of the client with the company and the unique characteristics that the bank’s customers might have.
The documentation that will be focused on will be the adherence to FCC rules and the financial reporting documents. The former will help in identifying whether or not there is an understatement or over statement. The latter will help in identifying whether or not the company has any loopholes that hinder the company from adhering to the rules of FCC (Tyrer, 1994).
4) . One of the largest bankruptcies in history was enabled by accountants hiding debt and destroying the evidence to avoid implication (Buckstein, part 2 pgs. 1, 2, and 3). These unfortunate events led to the need for increased scrutiny and regulations, including the Sarbanes-Oxley Act (Buckstein, part 3 pg 1). This legislation inspired the creation of the Canadian Public Accountability Board (CPAB) (Buckstein, part 3 pg 1). These changes have led to an increased awareness of the need for auditor independence as well as higher standards for accounting and business in general (Buckstein, part 3 pg 1). While these measures have helped to reassure the public, there is still the question of why Accountancy is not a protected
The fundamental duty of an external financial auditor is to form and express an opinion on whether the reporting entity’s financial statements are prepared in accordance with the relevant financial reporting framework. In discharging this duty, the auditor must exercise “reasonable skill, care and caution” (Lopes, J. in Kingston Cotton Mill Co 1896) as reflected in current legal and professional requirements.
Accountants are becoming a needed job in the business industry and play a very important role in the success of many businesses. This job usually requires at least a bachelor’s degree in accounting and sometimes even a CPA (Certified Public Accountant). There are many other things that are needed to be considered before choosing this career. The job environment, education, skills, and benefits are just some of the many things that need to be thought through before considering this career.
RG & Co Chartered Accountants, 20 Business Benefits Cloud Accounting has over PC software. Available at: . [Accessed 20 November 2013]