Question $6(10$ Marks $-15$minutes$)$

You have recently joined an established, medium sized firm of auditors as a junior partner. Because of your knowledge of the relevant pronouncement, Sam Sandman, the senior partner, discussed the following situations with you:

$1.$ Your firm acts as auditors to Small Ltd and as financial advisers to Ben Big, one of its directors. Ben Big had instituted a legal action against the company for breach of contract and has sought your firm's advice relating to certain financial aspects relating to Small Ltd$.$

$(5)$

$2.$ The chief accountant of Cruz Ltd$,$ a public, but unlisted company, audited by your firm, left unexpectedly. The company has asked your firm to maintain its accounting records for the remaining three months of its financial year until they can appoint a suitable accountant. $(5)$

Required:

Discuss each of the situations above in terms of the Code of Professional conduct. $($Include in your answer the threats to professional conduct, threats to the fundamental principles and the safeguards$).$