CASE 1

1. SRC Rules 68 - Financial statements required to be submitted by

corporations shall be accompanied by an auditor's report issued by an
independent auditor and presented in accordance with the requirements of this
Rule. Failure to comply with any of the formal requirements under this Rule
including the prescribed qualifications for independent auditors shall be
considered a sufficient ground for the denial of the receipt of the financial
statements or the imposition of appropriate penalties.

PAS 200 - The purpose of an audit is to enhance the degree of confidence

of intended users in the financial statements.

Corporation Code Sec. 141 - Annual report or corporations. Every corporation, domestic or foreign, lawfully doing business in the Philippines
shall submit to the Securities and Exchange Commission an annual report of its
operations, together with a financial statement of its assets and liabilities, certified by
any independent certified public accountant in appropriate cases, covering the
preceding fiscal year and such other requirements as the Securities and Exchange
Commission may require. Such report shall be submitted within such period as may
be prescribed by the Securities and Exchange Commission. (n)

 2. Code of Ethics
Sections:
150
250
3. Code of Ethics Section 330
Code of Ethics 210.7-8
4. PSA 706
6. If the auditor considers it necessary to draw users
attention to a matter presented or disclosed in the financial statements
that, in the auditors judgment, is of such importance that it is
fundamental to users understanding of the financial statements, the
auditor shall include an Emphasis of Matter paragraph in the auditors
report provided the auditor has obtained sufficient appropriate audit
evidence that the matter is not materially misstated in the financial
statements. Such a paragraph shall refer only to information presented
or disclosed in the financial statements.

5. PSA 240

A1. Fraud, whether fraudulent financial reporting or misappropriation

of assets,
involves incentive or pressure to commit fraud, a perceived opportunity to
do so
and some rationalization of the act. For example:
Incentive or pressure to commit fraudulent financial reporting may exist
when
management is under pressure, from sources outside or inside the entity, to
achieve an expected (and perhaps unrealistic) earnings target or financial
outcome particularly since the consequences to management for failing to
meet financial goals can be significant. Similarly, individuals may have an
incentive to misappropriate assets, for example, because the individuals are
living beyond their means.
PSA 315
27. In exercising judgment as to which risks are significant risks, the auditor shall consider at least the following:

6. Code of Ethics 290.187

7. Code of Ethics 290.11-17