ASSIGNMENT 5 It has been suggested that the most important matter affecting the credibility of the auditor is that of 'independence Required Comment on the following situations in the context of the independence of the auditor, showing clearly the threats involved and the safeguards required by the IESBA Code of Ethics for Professional Accountants: a a) The audit manager in charge of the audit assignment of Scott holds 1,000 GHC1 ordinary shares in the company (total shares in issue - 100,000). The audit partner holds no shares. b) An audit partner of a firm of Chartered Accountants is a personal friend of the chief accountant of Peters Ltd. The chief accountant is not a director of the company and the partner is not responsible for the audit of Peters Ltd. c) The audit fee for Freya, a listed company, is GHC 175,000. The total fee income of the audit firm is GHC 700.000. d) The audit senior in charge of the audit of Green, a bank, has a personal loan from the Green Bank of GHC 2,000 on which he is currently paying a market rate of interest, e) An audit partner is responsible for two audit assignments: Pepper and Tomato. Pepper has recently tendered for a contract with Tomato for a supply of material quantities of goods over a number of years. Tomato has asked the audit partner to advise on the matter. 20 marks