How may competitive bidding affect the independent audit function? Identify the potential impact on individual audit engagements and the long-range implications for the public accounting profession.
How may competitive bidding affect the independent audit function?
1. In competitive bidding every potential bidder must have the same information and business requirements. This requirement is compromised if there are family relations, investment or any other relationship with the auditor.
2. Every competitive bidder is required to have a copy of the company's purchase order, terms and conditions and no other information. This requirement is compromised if the auditor has any direct or indirect employment relationship with the bidder.
3. Every competitive bidding process must have a minimum number of quotations from competent sources of supply. However, if the auditor provides even taxation service to any one of the bidders, auditor independence is compromised.
4. Every competitive bidding process must have ...
This solution gives you a detailed discussion on Competitive Bidding Affects