QUESTION $6$

$(20$ Marks$)$

Dwid is a Chartered Accoumtant $($CA$($SA$))$ warking in public practice. He has been a senior partner at a medium$-$sized audit firm for the past $15$ years. Recenfly, one of David's iong$-$standing clients, TechSolutions Lif, approsched him with an opportunity to invest in their company. TechSoutions Ldd$.$ is a rapidy growing lechnology firm that has been audited by David's firm for the past eight years. They offered David a chance to buy shares in the company at a discounted price before they go public.

David is excted about the imestrent opporturity but also aware of his position as the engagement partner responsible for the audr of Tecilsolutions Lid. He believes that his extorsive knowlodge of the company's financials makes it a sound investment Adsitionally, David has a close personal relationship with the CFO of Tech Solutions Lid., with whom he has frequertly sociaimed outside of work.

At the same time, David is approached by a potential new clent, GreenEpergy $($Pty$)$ Lid., a start$-$up specializing in renewable energy. GreenEnergy $($Pty$)$ Lds is boivg for an auditor who can also provide advisory senvices$,$ parto,iarty in helping them secure funding and mprove their financis$/$ reporing systams. David sees this as an opportinity to grow his firm's clent base and agrees $10$ provide both aude and adriscry services, anficipating the dual role will make his firm more competive.

Lasty, David is informed that a juviar auditor on tis ream, which has been involved in the TechSolutions Lad, audi, has been acoepting expensive gits fom the CFO as a towen of appreciation for their hard work. The junior auditor does not see this as an issue and has not dscosed the gifts to Davd or the flom.

You are required to: explan aty thrests to re findamental princieles and aso suggest saleguards that could be implemented to lower the Freats to an acceppiatis levef.

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