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Pricewaterhousecoopers;Question 3;In April 2003, PricewaterhouseCoopers placed a full-page advertisement in the Wall Street Journal. The advertisement?actually more of a statement of the firm?s support of principles-based accounting?said: ?Rules-based systems encourage creativity (and not the good kind) in financial reporting. They allow some to stretch the limits of what is permissible under the law, even though it may not be ethically or morally acceptable. A principles-based system requires companies to report and auditors to audit the substance or business purpose of transactions, not merely whether they can qualify as acceptable under incredibly complex or overly technical rules.? It went on to say: ?A rules-based system allows managers to ignore the substance and, instead ask, ?Where in the rules does it say I can?t do this???;Why would they be supporting a principle based system? Explain and discuss.;Question 4.;Should auditors feel this way if a client collapses after a ?clean? audit report? Discuss


Paper#28561 | Written in 18-Jul-2015

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