North Face

Auditing Procedures Name Course Tutor Date SEC Working papers play a vital role in explaining the rationality of the audit report given by an auditor. These papers describe the audit report and all the procedures that were followed during the audit period (Kumar & Sharma, 2006). As such, these papers are seen as vital documents that must not be altered. Furthermore, any additional work done on the final report should also be accompanied by similar papers. Fiedelman failed to have additional working papers despite the process continuing after finalization. This meant that the integrity of the audit report had been compromised as there was no way of ascertaining that the required rules were followed. In addition, the lack of working papers for such changes meant that the rationale behind the changes was not provided. Since the report had already been finalized, any changes that were to be made on the document had to be justified. The lack of justification meant that the audit report had been corrupted. This was the basis for the sanction given to Fiedelman. Professionalism in auditing is a vital aspect that ensures that all audit reports reflect the true events that took place. According to Knapp (2008), Fiedelman failed to observe professionalism in his work. The audit report included various transactions that were in contrast to other reports by Deloitte the previous year. This meant that the auditor was unable to handle his tasks in a professional manner hence prompting the SEC to sanction him for his actions. Lack of professionalism can erode the credibility of an audit report and there is need, therefore, to always ensure that due diligence and procedure is followed. Justification for 3 year ban on Fiedelman The 3 year sanction given to Fiedelman by the SEC (Securities and Exchange Commission) was justified. The rules set out by the commission ensure that a person who is found to have been unprofessional may be terminated from working for the clients of the commission. The termination may, however, be either permanent or momentary (Securities and Exchange Commission, 2003). Fiedelman was aware of the conclusion reached at by the Deloitte Company about the financial deals of the North Face. This means that his actions were partially unprofessional since he disregarded the findings. Furthermore, he contradicted the findings in his audit report. This meant that the auditor was aware of his actions and the repercussions that would arise by going against the report. As a seasoned auditor, judging by his position in Deloitte, he is expected to be professional and follow all the required rules when auditing a company. Fiedelman also misled his juniors by asserting that the previous audit conclusion was in error and there was need to edit it. He, however, did not provide any justification for the editing of the working papers. Furthermore, the auditor did not provide working papers for the edited audit report. This was gross negligence on his part and there was need to inflict a ban on his activities for the SEC. Ethical Editing The working papers must provide the rationale for editing the final report, especially after the financial reports have been released. When a partner asks that the working papers be modified, this can only be done when there is reasonable justification. However, this should be reported to the SEC as t...