DISCUSSION CASE financial statements
Craig Thorne works in a public accounting firm and hopes to eventually be a partner. The management of Allnet Company invites Thorne to prepare a bid to audit Allnet’s financial statements. In discussing the audit fee, Allnet’s management suggests a fee range in which the amount depends on the reported profit of Allnet. The higher its profit, the higher will be the audit fee paid to Thorne’s firm.
Question 1: Identify the parties potentially affected by this audit and the fee plan proposed.
Question 2: What are the ethical factors in this situation?
Question 3: Would you recommend that Thorne accept this audit fee arrangement? Why or why not?
a. Submit a substantive posting of at least 250 words that answers the questions above. This posting must be submitted by midnight Thursday.
b. Respond to at least (2) fellow students’ postings by midnight Sunday. These responses (of at least 125 words) should be substantive and should add to the discussion.
Substantively answered all questions in an original post of at least 250 words – 15 / 15
Substantively responded to two other students, each response a minimum of 125 words – 10 /10