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What Went Wrong in the Audit of Tri-Pack Films Limited?

Omair Haroon, Waqar Ali and Atifa A. Dar

Asian Journal of Management Cases, 2020, vol. 17, issue 1, 36-51

Abstract: This case looks into an instance of an audit failure in the context of a Pakistani listed company, Tri-Pack, whose financial statements for the year 2014 showed a material misstatement (which reduced 2013 profits after tax by around 88%). This led to an investigation by the regulator (Securities and Exchange Commission of Pakistan) into the audits across 2012–2013, culminating into a stern warning being issued to the engagement leader (partner) for having failed to exercise an attitude of professional scepticism, failed to perform the audit to obtain reasonable assurance around Tri-Pack’s financial statements being free from material misstatement either due to errors or fraud and failed to bring out material facts about the affairs of the company and make a report to the shareholders thereof 1 . The case hones in on the audit dynamics and defence presented by the audit firm (A.F. Ferguson & Co. Chartered Accountants) for the year 2013, to assess the shortcomings in the conduct of the audit of Tri-Pack’s financial statements for that year’s end. It stimulates the work of an audit quality head who reviewed Tri-Pack’s audit file in order to ascertain whether the objectives of the audit were met and what lessons can be drawn to leverage towards future audit engagements.

Keywords: Audit; restatements; audit quality; audit risk assessment (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:sae:anjomc:v:17:y:2020:i:1:p:36-51

DOI: 10.1177/0972820119892719

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