John has recently been appointed as an audit partner to a Top End audit firm. One of
Question:
John has recently been appointed as an audit partner to a Top End audit firm. One of his duties is to review the firm's audit clients to ensure that the independence requirements of APES110 Code of Ethics for Professional Accountants are being met. His review revealed that several audit engagements were potentially in breach of the
APES110 independence requirements. On review of a successful audit tender submitted to obtain the audit of a major childcare center for a four year tenure period, it was discovered that your audit firm mostly likely won the audit tender because the quoted audit fee was $13,000 lower than the predecessor auditor.
Required:
Identify potential threats to independence and recommend any safeguards to reduce any threats to independence.
Auditing Cases An Interactive Learning Approach
ISBN: 978-0133852103
6th edition
Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt