Question: Question 2 Study the scenario and complete the question that follows: Summerhouse (Pty) Ltd Mitchell Cord recently completed the audit of Summerhouse (Pty) Ltd, a

Question 2 Study the scenario and complete the question that follows: Summerhouse (Pty) Ltd Mitchell Cord recently completed the audit of Summerhouse (Pty) Ltd, a manufacturer of exclusive furniture. The audit fee amounted to R180 000. Having recently bought a house, Mitchell Cord proposed the following to Summerhouse (Pty) Ltd: Instead of invoicing Summerhouse (Pty) Ltd with the fee of R180 000, he would invoice the company an amount of R80 000 for audit fees. Summerhouse (Pty) Ltd would then supply Mitchell Cord, free of charge, with furniture for his new house with a cost value to the company of R100 000. Summerhouse (Pty) Ltd would not raise an invoice of sale in the companys accounting records and would write the amount of R100 000 off as part of obsolete inventory.

Discuss the above situation in terms of the SAICA Code of Professional Conduct.

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