Case Data: Smit & Ng Chartered Accountants

You are a junior manager at Smit & Ng, a firm of Chartered Accountants. You are responsible for reviewing ethical matters which arise with the firm's portfolio of clients. During recent investigations you identified the following matters:

Heggen Co

The planning for the audit of Heggen Co's financial statements for the year ending 31 March 2020 will commence shortly. In preparation the audit partner, Max Warren, telephoned Heggen Co's finance director, Jim Carrey, to set up a planning meeting and to remind him that fees relating to the audit engagement from the previous year were still outstanding. Mr Carrey raised concerns about the conduct of the previous audit, stating numerous examples of when he and his staff had been interrupted when they were busy. He stated that he wanted guarantees that this year's audit will be more efficient, less intrusive and cheaper, otherwise he will seek an alternative auditor.

Required

1. Identify and discuss the ethical and other professional issues found in the above case.