Jane is a CGA with an accounting practice in a small town. She obtained her accounting designation 25 years ago and is now thinking of retiring in the next 5 years. In order to make her practice more valuable to a prospective purchaser, she has decided to branch out into auditing. Jane doesn't want to take refresher courses just to do a few audits, so she decided to restrict her audit practice to companies owned by friends. Her first audit is Steve's Repair Inc., owned by her brother. Steve owns all of the shares of the company, and the audited financial statements will only be used by creditors who have already lent money to the company. Steve agreed to the audit to help Jane to establish her auditing practice. Jane agreed to hire Steve's daughter to help review the inventory. Jane and Steve agreed that her fee would be $8,000 whether or not problems were encountered, but with a bonus if an unqualified report could be issued.

Required

As the auditor, identify Jane's duty of care. Identify issues related to independence in Jane's audit of her brother's company.